FL HOA - Mortgagees Consent for Amendments

Funny to see Federal Savings and Loans in your statement. Those have been gone for almost 30 years. I would consult an attornery familiar with corporate law or contracts law. Not real estate law. It's best to have an expert to help guide you all through this.

Our CC&Rs have that requirement too, Zachery (but not our bylaws.) Our CC&Rs, however, also provide for something like the following: We'd send proposed amendments, to the lenders and if we didn't hear back from them within a certain period of time, their silence would constitute agreement. So make sure your CC&Rs don't have similar provision.'d

I may be wrong, but my guess is that most of them wouldn't be interested in your CC&Rs.

I'd do the CC&R revisions first and send them out for a vote. It'll be expensive for the attorney, mailings, etc. What % of lots must vote yes to amend your CC&Rs? Your bylaws?

Have your covenants and restrictions been properly preserved in regards to the Marketable Record Title Act? If not then your covenants may be expired thus non existent and you may have a few more steps in revitalizing your documents.

Zachery our CC&R's also require approval by the first mortgage holder but also includes this: No amendment shall have any effect, however, upon a bona fide first mortgagee until the written consent to such amendment of such mortgagee has been secured. Such consents shall be retained by the Secretary of the Association and his certification in the instrument of amendment as to the names of the
consenting and non-consenting mortgagees of the various Units shall be sufficient for reliance by the general public. If less than all mortgagees consent to an amendment to this Declaration and / or the By-Laws attached hereto as Exhibit C said amendment or modification shall nevertheless be valid among the Unit Owners, inter sese, provided that the rights of a non-consenting mortgagee shall not be derogated thereby.

Which means that even if the mortgage holder doesn't agree - remember the HOA contract is between three parties, the HOA, the Homeowner and the mortgage holder - that the homeowner is still bound by the agreement unless it would negatively impact the mortgage holder.

Yes, John, ours says the same thing as yours, as I note above, but apparently Zachery's do not have that provision.

And, Zachery, given that you want to make that major, major roof revision, I think I like your idea of sending out all of the "easy" revisions first, and after that's all settled, send out the tougher one(s). You need a lot of owners to approve the amendments and some (many?) of them may not want the roof revision either.

Wow! I had to step away for a few hours and thank you so much for your input. I'm new on the site and am not sure how to box quotes and respond so.....

Regarding MRTA....Our HOA went through a Recordation of Revitalized Documents in late 2004 in compliance with Chapter 720.407 of Florida Statutes. I was not a member at the time but that would have been the ideal time clean up some of the old language. But they did not. They revived the original documents exactly.

Our Amendment Article is short and not so sweet. "AMENDMENT REQUIRES MORTGAGEES CONSENT: These restrictions may not be amended without the consent of each bank, insurance company or federal savings and loan association holding a purchase money first mortgage upon a LOT in the SUBDIVISION and the approval of at least two-thirds of the lot owners, either voting at a meeting or expressing consent in writing or any combination of the above."

I used the roof issue as an example and agree that the membership not would support that measure...but...over the years certain rules have been adopted that are contrary to the CC&R's and have become ingrained as gospel. Currently the general understanding is that each owner is responsible for their own. It's a delicate situation.

I think my questions may have answered. It's not uncommon for HOA's to have mortgagees consent for amendment. Ours is strict, perhaps too strict. Perhaps we should consider amending the amendment process to incorporate some of the T's and C's mentioned above.

Go with the easy items first. It will start the process of acquiring member approval and finding out who has a first mortgage, who the lender is, and who the contact person is in their legal department.

Another question that comes to mind is "do the members have an obligation to disclose their lenders to the HOA for the purpose of the amendment process? There's nothing in the governing docs that requires that.

This was my first post and am sure it won't be my last. Hopefully, one day I will be able to make a contribution as well...thank you all so much!

Zachery,

Courts have universally held that covenants are a contract between property owners. Yours makes it a contract between owners and anyone the property owner has contracted with for a mortgage.

You need good solid legal advice. As others have pointed out, your covenants may be expired under MRTA. The inclusion of non-owners in the covenants and the impossibility of compliance may be grounds for reformation by the court.

Keven you got that idea from the title of the topic:

"FL HOA - Mortgagees Consent for Amendments"