FL Covenant Expiration MRTA

Gwen:

#1 My personal opinion is that whenever a board justifies its actions by relying on a written opinion from their attorney that the board should make that opinion available to the members. My experience has been that when an attorney advises his client, his client never fully understands and places his own interpretation on the advice but nonetheless says, "Our attorney told us ...." The attorney's written opinion should also refer to the authorities he relied on to arrive at his conclusions and anyone who wishes to challenge the advice needs to be aware of the sources. I am not aware of any law that requires disclosure, however. Remember that if you were to file a lawsuit, the opinion may be required to be produced under discovery rules although the reality is that in a court of law the HOA's attorney's opinion carries no greater weight than that of the opposing counsel.

#2 My experience with attorneys who specialize in HOA law is that they are no better -- and in at least one case far worse -- than a run-of-the-mill lawyer.

Since you already have access to at least one Florida court opinion, start with that. The written opinion should identify who represented the parties and you would be wise to contact the lawyer whose arguments prevailed. You might also get onto a site such as findlaw.com and search Florida opinions for other HOA MRTA cases to obtain the names of prevailing attorneys.

From the questions I assumed it was an HOA instead of a condo. I cannot imagine how a condo could exist without some sort of declaration in place.

Thank you everyone for your help.

We are an HOA under FS720

@Kevin: please email [email protected]

You wrote: "Say the covenants have in fact expired. If the original covenants are revitalized pursuant to MRTA, do the amendments remain? Has this been an issue? If I remember correctly, MRTA renews the original covenants but revitalizing more restrictive covenants then the original would require a greater percentage then just a simple majority. Right?"

Kevin, it would logically seem that any action intending to "address" a defunct Covenant would be meaningless. This is why the resident asked the Board what problem they intended to solve by recording a Notice of Preservation of an Amendment. Florida case law says recording or republishing an Amendment is not sufficient to avoid the heavy hand of MRTA. However, during the revitalization process, I would guess that such Amendment would be incorporated in the re-write as it had already been approved by the voters, eh?

From what I have read, the revitalized Covenants can only delete references which have no more meaning (such as developers) and incorporate current statutory legislative changes which specifically preempts the governing documents and can be no more restrictive than the original. It is essentially an updating of a document as I understand it.

I have read that any new restriction would have to be agreed to by each homeowner, since it was a voluntary encumbrance. Does this mean the revitalized HOA is necessarily voluntary? (I suppose this is what we pay the lawyers for!)

Gwen,

Last week there was a thread regarding an Iowa statute similar to Florida's MRTA, but even more restrictive. I am not sure if that thread still remains, but the link to the Iowa court opinion is
http://www.iowacourts.gov/court_of_appeals/Recent_Opinions/20120229/1-867.pdf

According to this opinion, a declaration of property restrictions must be renewed every twenty-one years or sooner, the renewal must be approved by at least a majority of the owners, it must refer back to the original recording, it must be properly signed and notarized, and it must be recorded in a special book that each county recorder must maintain just for that purpose. In this case, the owners timely attempted to renew but obtained signatures from only five of fifteen owners, failed to have the document notarized, failed to refer back to the original recording, and failed to have it recorded in the special book. The court ruled that the CC&R's became void because of the owner's failure to comply with the statute and that their subsequent attempt at renewal was meaningless.

While this is not directly applicable to Florida's MRTA, you might find it helpful to read the above case as the court's decision was based on a multitude of omissions and errors committed by the owners who tried to renew their covenants and failed badly. You may find that your own HOA failed to comply fully with the MRTA.

Gwen, Did you find out if the HOA's Attorney's advise was correct? Just curious.

It is my understanding that the root of title will refer to a particular book and page of the applicable document - that being the original covenants and restrictions. Just because the neighborhood amended and restated the original covenants, they did just that - amend them, not replace them. Your title still refers back to the original documents so MRTA would apply to the original document. I believe this is firmly supported by case law. Your HOA's attorney is getting creative with interpretations. I have a court case that you may find helpful but I will have to find it when I get home.

Matissek v. Waller, 51 So.3d 625 (Fla. 2d DCA 2011)

In Matissek v. Waller, Gerhard and Kelly Beth Matissek built a structure on their property in Pasco County. The HOA argued that the Matisseks did not follow the restrictive C&Rs. The Matisseks argued various bases, one being MRTA. The association responded by stating the restrictions were not eliminated because of various later recorded instruments referred to the restrictions and because the restrictions were re-recorded after the Matisseks bought their property.

The Second District Court of Appeal agreed with the Matisseks because the later instruments did not specifically refer to the location in the public records where the original restrictions were located, and because the re-recorded restrictions were outside the chain of title of the Matisseks. As a result, MRTA eliminated the restrictions.

May also apply: Judge Lisa Munyon’s March 4, 2011, “Order on Plaintiff’s First Partial Summary Judgment Motion – Marketable Record Title Act,” in Busch v. Sand Lake Hills Homeowners Association, Inc., Case No. 10-CA-11,262.

Gwen had wrote that "We only seek the truth about the status of our Covenants so that owners may participate in the governance of their association in an informed manner."

I take it that she, and possibly others in the neighborhood are trying to make sure the HOA is operating in accordance with the law. If the covenants did indeed expire and the HOA continues to act, assessing, fining, and or plain involving themselves in matters they have no legal right to be involved in, I would think that that could open up not only the HOA but the membership to a very big liability.

I have recently read of one HOA that has declared bankrupt and has to sell off it's common property to satisfy a judgement against them. Imagine the same happening to this HOA (or any for that matter) that glosses over the law causing some potential for problems in the future that could destroy the entire fabric of the community.

If doing this research, consulting with a lawyer, and fighting just to get HOA business squared away and current, then I think that is great.

Another example - look what happened to my neighborhood. Nobody had problems paying the HOA when they thought it was voluntary. They paid when they thought they were threatened but since the judgement against the HOA people stopped paying and the HOA essentially folded up shop. There is virtually no more community-wide presence. All the good things the HOA could have accomplished is gone. All because the HOA acted improperly.

I am just like why are you looking up laws and looking at mundane things like MRTA? What is your point and just go for it. A lawyer is paid, passes a bar exam, and is LICENSED to practice law. It's their purpose in life. So if you have an issue with your HOA let them do their job and look up court cases, case law, or laws in existence. You are NOT qualified to do so nor have the ability to translate the law. Neither would the people who you are so gung-ho to look all this stuff up to toss in their face. They are NOT professional people on a HOA. It's just your neighbors who only qualification is they bought into the place. Seriously, if someone came up to me throwing all these law references I'd tell to go tell it to the lawyer cause I am just doing my job the best I can by the rules I have at hand.

A HOA has the ability to resolve it's issues INTERNALLY. It is set up that way without ever needing to go to a lawyer other than lien or foreclosure filings basically. So if you have an issue with your HOA simply state what your issue is. It is YOUR HOA.

Sorry for my rant...It's just when I see people who get all caught up in looking up all these laws and stuff without looking at their own documents or being involved in a solution, I get a bit frustrated. State your point on the solution you want to see and work on getting to that. All this other legal crap is left to the professionals if you so choose to hire one...There done...Whew...

Melissa, I am not sure why your response is so emotional, but I'm glad you got it off your chest!

Forums serve many needs and that is why I come to a specialty forum. This forum is a very important communication exchange of information about problems that are not new. Many times, I want to learn more about a subject, put my keywords in the Search box and get lost in the rich environment of different points of view.

To me, that is the point of coming to such an exchange ie to "vet" your thoughts, propositions and concerns with other involved and knowledgeable members who may have already been down the same road. This helps to focus one's attention on the critical, fundamental issues and avoids wasting time and money on blind alleys (and attorneys). I work too hard for my money to automatically go running to an attorney every time I am confronted with a difficult situation.

I believe that educating oneself and identifying resources is the first, best thing to do in managing life. In an HOA, the education process begins, of course, with reading and comprehending the governing documents, as well as your state's statutes. You wrongly assume, without evidence, that this has not been done.

We do depart views with your question "Why look at mundane things like MRTA?" One week ago, no one in my HOA had any idea about MRTA. Now, there is growing realization that this law could change our world! Even though the content is "dry", many are slogging through it because it has a profound impact on the future of our HOA. These individuals are not dues-paying slackers, rule breakers or HOA-hating discontents. They are reasonable folks who have involved themselves in the governance of our community and are informed about the weaknesses inherent in the structure of HOA's and its volunteer practitioners, as well as the lack of access to a reasonable enforcement vehicle.

My hoped-for outcome is that the truth is brought to light so that owners can make informed decisions for their future interests, rather than knee-jerk reactions to fear of the unknown or dis/mis-information offered by leadership. That may or may not result in a collective desire to revitalize the old, and increasingly troubling, HOA presence in our community.

Oh okay one of those "The Truth is out there" kind of things...I kind of find that doesn't work. What works is actually being involved in your HOA and running for office or attending a meeting. I tend to take REALITY over the "Truth"...
Confuscious say truth in hand does not equal reality in life...(I made that up lol)

If you understood your HOA and what it is for/does then you already know that this is happening already. You have what your looking for if you stop looking everywhere else for the "answers".

I always liked this one:

I reject your reality and substitute my own.
made popular by Adam Savage on Mythbusters

I would classify your statement as wrong. I was actually very happy in my neighborhood. We were voluntary dues paying members for over a decade and had attended some meetings as well. My family bought our houses in neighborhoods specifically because they had voluntary associations. When that voluntary association sent a letter saying that we had to pay or face legal action a flag was raised. We tried contacting the HOA but we couldn't get any information. When we asked what changes were made we were told by the Board to look it up on our own. Their lawyer had also sent us a letter saying that it was fair and that if we did not pay they would take us to court, win, and make us pay their bills, and all this just from asking how they were able to do something!

It was from research and asking questions that things started to look off. When we tried to involve ourselves in the community some more we were shot down. We were refused entrance to the meetings and then the HOA held closed meetings altogether in real estate agents' offices and hotel conference rooms.


That would be easy IF the HOA allowed for participation. In my HOA, as I mentioned above, we were not allowed entrance to the meetings. The HOA refused to communicate with us and told us if we wanted ANY information from them we needed an attorney (It helps to understand that they claimed they were not governed by Statute 720 so they believed they only had to abide by corporate statutes).

Elections? The board members were in control of proxies that granted the board discretion over the votes. When someone new became a director on the board they were there in name only. My neighbor was gung-ho about joining the HOA and Board. The original board clique never informed him of what was going on in the neighborhood, didn't tell him about board or membership meetings, and never changed their corporate filings to put him on. They also refused to tell him about the giant lawsuit that they were involved in.

So resolving conflicts internally is ideal but when one party doesn't follow those mundane statutes and dot their "i"s and cross their "t"s, then that is not possible.

Your comments assume as if I did not try certain things.

The meetings I reference. They were not special executive meetings. They were not private meetings. They did not have the lawyer present. They were general membership meetings. According to Florida Statute 720, the HOA cannot deny entrance to homeowners (regardless of membership) but that didn't stop the HOA. The denied entrance to individuals in "mandated" sections from entering. The issue was that they were forcing non-members to pay money but then would not allow those non-members a entrance to their meetings or a vote. It was the HOA that created an adversarial relationship - the HOA membership could create assessments for the non-membership and the non-membership could do nothing about it. Oh, and did I forget to mention that this wasn't even my HOA? My property existed in a subdivision that had different covenants and restriction then this HOA but they insisted they were the master association because the covenants and restrictions were similar to theirs and had a similar name.

"Did you think there was some official board member registry somewhere?"

Yes. The Department of State Division of Corporations requires annual reports for the corporation, which in turn requires Directors and officers to be listed, as well as any changes. If changes were made after the filing, an amended annual report must be filed.

"Did you think every meeting is open?"

Again, according to Florida law, it was. The organization claiming publicly to be an HOA privately claimed it was not. It then held general membership meetings closed to all homeowners and permitted certain homeowners entrance, notifying them privately.

"Not in every state it isn't."

In Florida it is.

"Do you think the board is hiding anything?"

Yes. In court documents, the board made various statements that were contradictory to their public claims. They claimed to have owned common properties thus requiring funds but documents showed they did not. They claimed they held secret meetings because of disturbances and that the county started charging for use of the library conference room despite the fact that the room had always been free and was not owned by the county.

"Probably but did your dues raise because of it?"

That was part of the issue. The Board claimed that everyone was upset over the small amount of $100 but the fact of the matter was that the amended covenants and restrictions they were trying to enforce did not limit assessments. It actually granted the board authority to charge whatever amount whenever they wanted without any oversight from the membership (or non-member homes they wished to assess).

"The lawsuit issue the lawyer probably advised not to speak of it as if they did you all could be brought in as witnesses."

I understand if this were general meetings but what about not even making such information privy to other board members? Not even notifying other board members of board meetings?

"Educating yourself about HOA's don't need some outside source. It needs you to read what already exists."

Do you not think that I have? I had spent years researching C&Rs, by-laws, statutes, case law, history of the region, etc. I am fully aware of what already exists. The problem is not all HOAs are perfect and not all problems can be solved internally. In my situation an outside HOA tried to exert influence over my neighborhood. When tried to resolve internally the HOA essentially told me to pay up or lawyer up. Every communication we had with the HOA was civil and to the point. What we got in return was far from that.

You cannot assume that every HOA acts in the best interests while every homeowner knows nothing. How could I run for the board if the HOA insisted I lacked authority even when the board was composed of non-homeowners and non-residents of the neighborhood? How could I resolve a dispute with a board that refused to communicate with me?

I would think that even if an HOA were to reinvent themselves with a whole new set of updated covenants you would eventually find yourself in the same situation. Some would want stricter covenants and some would not. Those that want change would probably be more involved in the neighborhood and push for some changes, and in neighborhoods where the BoD has a poor grasp of the law or procedures they would most likely fall into the same pitfalls as before.

For instance my neighborhood decided to "restate" their covenants and restrictions years ago but it was hardly a restatement. It was a complete rewrite. They then got a simple majority to "pass" the far more restrictive covenants then started enforcing a "mandatory maintenance assessment." Long story short, a judge shot down their claim to authority and the covenants expired. The BoD still claimed to be in existence and was working on fighting the judge's ruling. The issued statements pretty much ignoring the ruling but that they would put their plans on hold. If a newer set of documents were to be considered that were similar to the original ones I still wouldn't approve them for fear that history would repeat itself and that not signing on would save me more money and protect my investment.

A milestone was reached today. The first ever owner-organized paid-for meeting with an attorney guest speaker to talk about MRTA and our mostly-expired community. It was a sobering meeting but, it accomplished an important goal-to give people information from someone "without a dog in the fight" to reframe mis- and dis- or NO information from our leaders.

The community has been abuzz and a shocking street exchange between a BOD and Owner was relayed:

BOD: "You have to think about the good of the community".
Owner: "Yes, we are doing that and would favor attempting a revitalization".
BOD: "Our attorney said we were NOT expired and we will spend the entire 1.8 million in our Reserves to prove it!
Owner: "And THAT is thinking about the good of the community?"

Like a ripple in a pond, Pandora's box has been opened and the issue will take on a life of its own. Individuals now have the ability to make a more informed decision about how they wish to live with a governing group that would rather drive us into receivorship and enrich the lawyers rather than getting a second, independent legal opinion, engaging the owners in a conversation or just starting the inevitable process of revitalization.

This is a very sad day for people who now know the truth about the status of our CC&R's.

Gwen

What are the dissenters (those that disagree with the elected BOD) looking to achieve? What is their end game?

Thanks

Kevin

I have to question your end game. Are you really being altruistic and want to bring the HOA inline with the law or are you looking to kill the HOA as in you want to be on your own, with no HOA?

Kevin,

The subdivision I live in is in a similar predicament. Iowa's laws are similar to MRTA. The CC&Rs expired and were not renewed in the 21 year time period required by Iowa law. The board refuses to recognize that membership in the Association is voluntary. Two years ago the President erected a sign that states that "membership is required before building can begin".

I contend that membership is not required and nonmembers and members not in good should be charged the same as members. The current fee structure is $75 per year membership dues and $250 for sewer fees. If property owners do not pay the $75 per year membership dues, the bylaws state that they must pay 3 times the amount for sewer fees. Members in good standing have voting rights, may serve as board and committee members, use of the ponds, and are charged sewer fees at the member rate. The dues cover maintenance to the ponds. There is a dock and a picnic shelter and a private road to access the pond.

Any thoughts on whether the association can actually charge 3 times the amount for sewer fees if a property owner does not pay the voluntary membership dues.

Thanks.

Your situation is indeed unique. Having an essential common element - sewage - complicates matters. The only thing I wonder is if they would be legally allowed to charge such a rate. I would investigate if there are any type of utility regulations but if not I imagine they would be free to try and charge that amount and if you disagreed you could sue. As for building, I don't see how they can prevent you from building if not a member. If already connected to the sewer then I could see the conflict.

The problem with situations like this is that when prolonged it becomes toxic. Our neighborhood has around 900 homes. Nobody was aware of MRTA or the different sections. We always had membership rates of around 50 - 60 percent. The annual membership was around $100. Once the board started making changes membership dropped to half that. As the case was prolonged the board asserted they were right and increased payments back up to around 450 (the sections they rewrote they threatened legal action for non payment, the volunteer sections stopped paying). Once word got out about the judgement membership plummeted to a quarter of what it was and now the HOA closed up shop.

Had they heeded the warnings in the first place everything would have been good.

I personally think the two main causes came from the board's ambitions and their sleazeball attorney. The attorney made a name for their firm as converting neighborhoods dubiously and raking in cash for violations. Not much money in the volunteer association game. Had the board responded civilly in the first place I would have kept paying my dues and continued membership. Not only did they screw up by picking fights, they ignored calls to properly preserve the original covenants and amend them in accordance with the law. Not only did they lose membership, they lost the C&Rs and now have extra hurdles should they decide to revitalize.

The moral of the story is if they followed the law and proper procedures they would have been able to accomplish their goals and they would have had more people on board , including some of their biggest detractors.

Contact your local representatives? Maybe they can help facilitate a solution.

Thanks for the update! It is interesting to see these things play out and what actions either side takes (especially the one that lacks the legal foundations for their case).

Mandatory and Yes.