admend declaration

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RickL7 (Florida)
Posts: 1

Posted:

Our board wanted to add new amendments to the declaration did not pass at annual meeting closed meeting then over the next 2 months went out and got more votes to pass is this legal and if not what recourse to have voided
Thank you in advance

JanetB2 (Colorado)
Posts: 4,219

Posted:

Welcome to the Forum. What type of HOA are you ... Condo, Townhomes, Single Family, etc.? Documents and statutes vary depending on type of HOA.

DouglasK1 (Florida)
Posts: 2,046

Posted:

You should read your declarations to see how amendments are made. In my HOA, bylaw changes need a majority of votes at an annual or special members meeting with a quorum of members present.

Our declarations don't need to be changed at a meeting:
the owners of at least two-thirds (2/3) of the voting interest of the Association membership may change these covenants and restrictions in whole or in part by executing a written instrument making said changes
In our case, we used a written ballot distributed to all members. In the interest of transparency, we did count those ballots at our annual meeting, but that was not a requirement.

Escaped former treasurer and director of a self managed association.

GwenG (Florida)
Posts: 669

Posted:

OP: there are many disturbing statements made in your post. Among them, ..."at a closed annual meeting". Annual member meeting must be open, per statute.

Amendments are "colorations" (ie related to an existing covenant) of existing contractual promises. For that reason, Amendments do not attach to title and "run with the land" as do Declarations/CCR's. Covenants cannot be NEW unless 100% of the persons burdened by the contract, agree to a brand new provision. It is not correct to call an amendment "new". Amendments are corrections and clarifications of a covenant that already exists.

In rare rare cases, I have heard of "new" covenants added which are only applicable to existing members who specifically agree, in writing, and permitting those who do not agree to be exempt from the New provision. (I have heard of this practice with condos which allow rentals and are attempting to remove the right to rent from the Declaration. This would not be an Amendment.)

It sounds very likely that your board is not acting within the law. But, you first need to reference several documents ie Declaration (for authority to amend) your Articles and Bylaws (for the manner of notice required, meetings, balloting parameters, timelines, affirmation %'s, and voting, and the applicable statute (which may overrule or defer to your own governing documents) to be on firm footing to challenge this odd behavior by your board.

GenoS (Florida)
Posts: 4,276

Posted:

GwenG, is there anything online that speaks to the "100% agreement" of owners for an amendment that imposes a new covenant to be valid? I've never considered that before and since we're in the middle of a substantial set of amendments to our CCRs I'd like to look into that a little more.

I've been searching the internet for about an hour and can't find too much on the subject. The closest I've seen is a few court cases (district court of appeals and the state supreme court) that say the only test of validity of amendments is that of reasonableness and that an amendment not materially alter the character of the community or the original plan of development. A couple of those cases involved amendments to CCRs which arguably created new covenants.

I have seen recommendations that Florida consider adopting section 6.10 of the "Restatement (Third) of Property: Servitudes" to deal with amendments by lot owners in FS 720 associations. That section divides amendments into 3 classes, the third class being the only one requiring 100% unanimous approval of the owners. The 3rd class of amendments are those which prohibit or materially restrict uses within individually owned lots or change the method of allocating voting rights or assessments.

I haven't seen anything that comes to the conclusion of, "no new covenants without 100% homeowner approval". I'd really appreciate any links you might have handy on the subject.

GwenG (Florida)
Posts: 669

Posted:

I will relay some material produced by an attorney in connection with your question. At the heart of it, a Declaration is a CONTRACT and is treated by the Florida Courts as a contract. Like any contract, absent express provision to the contrary, it can only be changed by all parties to the contract. The exception is, of course, Amendments, which can be adopted pursuant to the terms of the Declaration/contract. A NEW covenant or contractual obligation is not an "amendment". Amendments can only "flesh out" an existing restriction, promise or obligation.

Kilgore v Killearn Homes Assn (1996)
AT&T Wireless Services of Florida v WCI Communities
Contract can only be amended according to their terms o by 100% approval of all owners.

Florida Constitution.."No bill of attainder, ex post facto law or law impairing the obligation of contracts shall be passed."

Westwood Community Two Assoc Inc v Lewis (1997)

Powell on Real Property Section 60.08 "Black Letter Law" ...absent express provisions to the conrary, amendments may only be effeced by all of the owners of property burdened by the Covenants

Finally,

FS720.306 states "...the Legislature recognizes that certain contract rights have been created for the benefit of homeowner's associations and members thereof before the effective date of this act and that FS720 (is) not intended to impair such contract rights.

FS720 was created in 2000 and incorporated a number of provisions from FS617.

In general, I philosophically believe that a law based on a model of servitudes is not constitutional; however, even the recommendation you described categorizing the classes of amendments recognizes the need for 100% approval to "amendments" which prohibit or materially restrict uses within individual owned lots"...

Hope some of this is helpful!

GenoS (Florida)
Posts: 4,276

Posted:

Thanks, Gwen, it is very helpful and I do appreciate it. I'll have a look at those.

DouglasM6 (Arizona)
Posts: 724

Posted:

The requirement for changing the declarations is very different from a vote for other reasons. We just went through this and spoke to a lawyer about it. The Board can go door to door to get the votes. The attorney even said that we "should" be doing that because you really want as much participation as possible. They cannot, however, solicit "yes" or "no" votes, specifically. There should not be a discussion about the changes. Only answering questions and collecting the votes.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By RickL7 on 04/21/2017 11:35 AM
Our board wanted to add new amendments to the declaration did not pass at annual meeting closed meeting then over the next 2 months went out and got more votes to pass is this legal and if not what recourse to have voided
Thank you in advance

Rick you need to check your By-Laws and Articles of Incorporation. If you are under 720 that section of law states:

720.306 Meetings of members; voting and election procedures; amendments.—
(1) QUORUM; AMENDMENTS.—

(a) Unless a lower number is provided in the bylaws, the percentage of voting interests required to constitute a quorum at a meeting of the members shall be 30 percent of the total voting interests. Unless otherwise provided in this chapter or in the articles of incorporation or bylaws, decisions that require a vote of the members must be made by the concurrence of at least a majority of the voting interests present, in person or by proxy, at a meeting at which a quorum has been attained. A meeting of the members must be held at a location that is accessible to a physically handicapped person if requested by a physically handicapped person who has a right to attend the meeting.

(b) Unless otherwise provided in the governing documents or required by law, and other than those matters set forth in paragraph (c), any governing document of an association may be amended by the affirmative vote of two-thirds of the voting interests of the association. Within 30 days after recording an amendment to the governing documents, the association shall provide copies of the amendment to the members. However, if a copy of the proposed amendment is provided to the members before they vote on the amendment and the proposed amendment is not changed before the vote, the association, in lieu of providing a copy of the amendment, may provide notice to the members that the amendment was adopted, identifying the official book and page number or instrument number of the recorded amendment and that a copy of the amendment is available at no charge to the member upon written request to the association. The copies and notice described in this paragraph may be provided electronically to those owners who previously consented to receive notice electronically. The failure to timely provide notice of the recording of the amendment does not affect the validity or enforceability of the amendment.

(c) Unless otherwise provided in the governing documents as originally recorded or permitted by this chapter or chapter 617, an amendment may not materially and adversely alter the proportionate voting interest appurtenant to a parcel or increase the proportion or percentage by which a parcel shares in the common expenses of the association unless the record parcel owner and all record owners of liens on the parcels join in the execution of the amendment. For purposes of this section, a change in quorum requirements is not an alteration of voting interests. The merger or consolidation of one or more associations under a plan of merger or consolidation under part I of chapter 607 or chapter 617 is not a material or adverse alteration of the proportionate voting interest appurtenant to a parcel.

If your documents do not allow they cannot go around soliciting votes ... needs to be done in a meeting in which quorum is attained. CCR's and subsequent Amendments are filed with County Records and attached to and affect people's property titles; therefore, they are not supposed to be easy to change.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

If your documents do not supersede state law and must be amended in appropriate meeting you should consult an Attorney regarding recourse to void as some recourses may be under your Real Estate Statute of Frauds.

I can explain what I did in my state under similar situation. When my last HOA developer filed illegal amendment, following a section under my Real Estate Statute of Frauds regarding filing documents against property titles ... I sent a Certified Return Receipt letter stating the laws violated and per the statute asked for the illegally filed document to be removed. Even though that law said they "shall not willfully refuse to remove" that is what the developer did. After consulting attorneys my family and other owners sued the developers and HOA. Fortunately at that time we were under declarant control so the developers were responsible for both their attorneys and HOA attorney costs. However, in my state the winning party can get their attorney fees awarded and the HOA cannot assess them for the HOA attorney either. But if an individual looses the costs could end up in their ball park.

GwenG (Florida)
Posts: 669

Posted:

The 720 Statute will clearly and specifically defer to the governing documents in certain areas. This will typically have similar language and be placed at the beginning of the statute provision where Janet has bolded the font above.

There is no substitute for reading and comprehending the governing documents and the statute; the two must always be read together. Laws often defer to the governing documents. That is because the Declaration is a contract and a statute cannot lawfully impair a material right in the contract. What the law can do is fill in the blanks of a Declaration if it is silent on an important activity like "amending a Declaration" or "defining a quorum".

It is true that a Declaration must be recorded in the public record. However, be aware that Amendments do not have to be recorded; it is the option of the association. Because they are internal association amendments, they transfer no property rights. Accordingly, they have NO power to attach to deeds. They simply exist for the benefit of Members of the Association at the moment they are adopted. They do not exist in the public domain.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By GwenG on 04/23/2017 9:57 AM
The 720 Statute will clearly and specifically defer to the governing documents in certain areas. This will typically have similar language and be placed at the beginning of the statute provision where Janet has bolded the font above.

There is no substitute for reading and comprehending the governing documents and the statute; the two must always be read together. Laws often defer to the governing documents. That is because the Declaration is a contract and a statute cannot lawfully impair a material right in the contract. What the law can do is fill in the blanks of a Declaration if it is silent on an important activity like "amending a Declaration" or "defining a quorum".

It is true that a Declaration must be recorded in the public record. However, be aware that Amendments do not have to be recorded; it is the option of the association. Because they are internal association amendments, they transfer no property rights. Accordingly, they have NO power to attach to deeds. They simply exist for the benefit of Members of the Association at the moment they are adopted. They do not exist in the public domain.

Gwen:
The above section states:

(b) Unless otherwise provided in the governing documents or required by law, and other than those matters set forth in paragraph (c), any governing document of an association may be amended by the affirmative vote of two-thirds of the voting interests of the association. Within 30 days after recording an amendment to the governing documents, the association shall provide copies of the amendment to the members. However, if a copy of the proposed amendment is provided to the members before they vote on the amendment and the proposed amendment is not changed before the vote, the association, in lieu of providing a copy of the amendment, may provide notice to the members that the amendment was adopted, identifying the official book and page number or instrument number of the recorded amendment and that a copy of the amendment is available at no charge to the member upon written request to the association. The copies and notice described in this paragraph may be provided electronically to those owners who previously consented to receive notice electronically. The failure to timely provide notice of the recording of the amendment does not affect the validity or enforceability of the amendment.

Therefore, how can you state "Amendments do not have to be recorded"? Please provide the statute stating otherwise. In my state and I know in some others Amendments to the CCR's are not legal and binding unless filed with the County Records and attached to the property titles via the HOA documents filed. This is so that consumers looking to purchase can research and perform their due diligence prior to buying via their local County Records. It also insures Title Companies pulling documents for closings can research and be made aware.

GwenG (Florida)
Posts: 669

Posted:

Janet: I did not just pull this out of thin air. It has been under litigation in the past. Title searchers pull up the amendments on a title search but they are ultimately not in the chain of title and do not bind the owner. Only that documents that "runs with the land" ie Declaration must be recorded. The Florida statute has recently been amended to include all governing documents to be recorded because that give them effectiveness. However, recording an amendment to a Declaration does not confer lawful restriction on a contractual property right, according to many courts/attorneys. This is against the intuitive sense but the fact remains that case law is not in agreement with legislative intent.

Here is an answer to the question by an attorney for the largest HOA attorney firm in Florida (Becker & Poliakoff):

Q: My homeowners’ association recently adopted amendments to our declaration. One of the amendments affects new owners’ ability to lease their units. However, a question has arisen as to when the amendments become effective. Are they effective when voted on at the meeting or when recorded in the public records?

– B.E. (via email)

A: Generally, unless an adopted amendment has a specific later effective date stated therein, amendments to homeowners’ association documents are effective upon recording. While Chapter 720 of the Florida Statutes, the Florida Homeowners’ Association Act, does not specifically state that amendments must be recorded to be effective, the Act defines “governing documents” to mean the “recorded declaration of covenants for a community, and all duly adopted and recorded amendments, supplements, and recorded exhibits thereto.” As such, if the association adopted an amendment that applies only to new owners, who take title after the effective date of the amendment, unless the amendment contains some later effective date, the amendment would be effective upon recording in the public records and any owner taking title to their property following that date would be subject to those provisions.

The amendment sentence you bolded in the statute is not a mandate to record; it only says when it is recorded, it is a presumption that a rational HOA will record the document. It has already been adjudicated in Florida that an Amendment/Rule change etc is not a "stand alone document" and does not have the force of law especially if it is held to substantially impair the covenanted property rights or owners. See Mattissek v Waller: here is a discussion by another Florida attorney (again the Becker & Poliakoff firm). Note that the question is embedded in a MRTA issue, but in finality (see the last paragraph), the MRTA issue was only a side issue in determining the power of amendments to restrict property use, after the fact--recorded or not.

MRTA: Recorded Amendments Didn’t Make a Difference
By on February 3rd, 2011 Posted in Arbitration & Court Rulings

Appellate Court Allows Homeowners to Build and Maintain Structure on Lot Despite Recorded Restrictions. We’ve discussed the Marketable Record Title Act (MRTA) on this site in the past in the post entitled: HOA Leaders Need to Understand MRTA. Please refer back to that post for background information concerning this important issue. There are several appellate decisions involving MRTA issues, including at least two cases decided by the Florida Supreme Court. Nonetheless, association practitioners continued to debate whether certain actions prevented MRTA from extinguishing restrictions and covenants found in a community declaration.

The Second District’s recent decision in Matissek v. Waller addresses one of the debated issues. Hidden Lakes Estates is a deed restricted community in Pasco County, Florida. It was developed as an airpark community that would include its own airport and permit residents to build and maintain airplane hangars on their lots. The declaration of restrictions specifically required homeowners to use “masonry or similar materials” in the construction of any buildings – including airplane hangars. There were amendments to these restrictions recorded several years later, but none of the amendments changed the masonry building construction requirement. In fact, the masonry construction requirement was re-stated in a recorded amendment. Mr. and Mrs. Matissek bought some property in the community in 1995 and in 2007 started to build a steel framed airplane hangar with steel paneled walls. One of the neighbors notified Mr. Matissek that the restrictions prohibited steel framing and required the use of masonry construction. That didn’t stop Mr. Matissek – he built his hangar they way he originally intended. The neighbor, Mr. Waller, did not appreciate this violation of the deed restrictions, so he filed a lawsuit to enforce the masonry requirement. His lawsuit contended the building was in violation and therefore must be removed. Mr. Matissek responded by saying the restrictions could not be enforced against him due to MRTA. The restrictions were originally recorded in 1971. Mr. Matissek claimed that his property was not bound by those restrictions, since 30 years had come and gone long before construction began. The trial court somewhat agreed with Mr. Matissek and somewhat agreed with Mr. Waller. It said that the 1971 recorded restrictions were extinguished by MRTA, but since the masonry requirement was re-recorded in 1977 (in an amendment), the amendment was still enforceable. The trial court ordered Mr. Matissek to remove the hangar based on the 1977 amendment, but he wasn’t ready to give up just yet so he filed an appeal.

The appellate court agreed with Mr. Matissek – it found that the 1977 amendments could not stand on their own – those amendments were revisions (or re-statements) of the 1971 document. The amendments were not “muniments” of title. These amendments did not change or modify the title to the property and were not considered a “vital link in the chain of title”. It didn’t matter that the amendments were recorded within 30 year period. The appellate court reversed the order requiring Mr. Matissek to remove the steel hangar and ruled that his property was free and clear from the Hidden Lakes Estates restrictions. Community leaders can prevent this type of situation from happening in their communities. Florida law allows homeowners’ associations to extend the restrictions if they haven’t expired. The law also allows homeowners’ associations to breath new life into restrictions that have inadvertently expired. Discuss these issues with your counsel before problems result.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By GwenG on 04/23/2017 11:00 AM
Janet: I did not just pull this out of thin air. It has been under litigation in the past. Title searchers pull up the amendments on a title search but they are ultimately not in the chain of title and do not bind the owner. Only that documents that "runs with the land" ie Declaration must be recorded. The Florida statute has recently been amended to include all governing documents to be recorded because that give them effectiveness. However, recording an amendment to a Declaration does not confer lawful restriction on a contractual property right, according to many courts/attorneys. This is against the intuitive sense but the fact remains that case law is not in agreement with legislative intent.

Here is an answer to the question by an attorney for the largest HOA attorney firm in Florida (Becker & Poliakoff):

Q: My homeowners’ association recently adopted amendments to our declaration. One of the amendments affects new owners’ ability to lease their units. However, a question has arisen as to when the amendments become effective. Are they effective when voted on at the meeting or when recorded in the public records?

– B.E. (via email)

A: Generally, unless an adopted amendment has a specific later effective date stated therein, amendments to homeowners’ association documents are effective upon recording. While Chapter 720 of the Florida Statutes, the Florida Homeowners’ Association Act, does not specifically state that amendments must be recorded to be effective, the Act defines “governing documents” to mean the “recorded declaration of covenants for a community, and all duly adopted and recorded amendments, supplements, and recorded exhibits thereto.” As such, if the association adopted an amendment that applies only to new owners, who take title after the effective date of the amendment, unless the amendment contains some later effective date, the amendment would be effective upon recording in the public records and any owner taking title to their property following that date would be subject to those provisions.

The amendment sentence you bolded in the statute is not a mandate to record; it only says when it is recorded, it is a presumption that a rational HOA will record the document. It has already been adjudicated in Florida that an Amendment/Rule change etc is not a "stand alone document" and does not have the force of law especially if it is held to substantially impair the covenanted property rights or owners. See Mattissek v Waller: here is a discussion by another Florida attorney (again the Becker & Poliakoff firm). Note that the question is embedded in a MRTA issue, but in finality (see the last paragraph), the MRTA issue was only a side issue in determining the power of amendments to restrict property use, after the fact--recorded or not.

MRTA: Recorded Amendments Didn’t Make a Difference
By on February 3rd, 2011 Posted in Arbitration & Court Rulings

Appellate Court Allows Homeowners to Build and Maintain Structure on Lot Despite Recorded Restrictions. We’ve discussed the Marketable Record Title Act (MRTA) on this site in the past in the post entitled: HOA Leaders Need to Understand MRTA. Please refer back to that post for background information concerning this important issue. There are several appellate decisions involving MRTA issues, including at least two cases decided by the Florida Supreme Court. Nonetheless, association practitioners continued to debate whether certain actions prevented MRTA from extinguishing restrictions and covenants found in a community declaration.

The Second District’s recent decision in Matissek v. Waller addresses one of the debated issues. Hidden Lakes Estates is a deed restricted community in Pasco County, Florida. It was developed as an airpark community that would include its own airport and permit residents to build and maintain airplane hangars on their lots. The declaration of restrictions specifically required homeowners to use “masonry or similar materials” in the construction of any buildings – including airplane hangars. There were amendments to these restrictions recorded several years later, but none of the amendments changed the masonry building construction requirement. In fact, the masonry construction requirement was re-stated in a recorded amendment. Mr. and Mrs. Matissek bought some property in the community in 1995 and in 2007 started to build a steel framed airplane hangar with steel paneled walls. One of the neighbors notified Mr. Matissek that the restrictions prohibited steel framing and required the use of masonry construction. That didn’t stop Mr. Matissek – he built his hangar they way he originally intended. The neighbor, Mr. Waller, did not appreciate this violation of the deed restrictions, so he filed a lawsuit to enforce the masonry requirement. His lawsuit contended the building was in violation and therefore must be removed. Mr. Matissek responded by saying the restrictions could not be enforced against him due to MRTA. The restrictions were originally recorded in 1971. Mr. Matissek claimed that his property was not bound by those restrictions, since 30 years had come and gone long before construction began. The trial court somewhat agreed with Mr. Matissek and somewhat agreed with Mr. Waller. It said that the 1971 recorded restrictions were extinguished by MRTA, but since the masonry requirement was re-recorded in 1977 (in an amendment), the amendment was still enforceable. The trial court ordered Mr. Matissek to remove the hangar based on the 1977 amendment, but he wasn’t ready to give up just yet so he filed an appeal.

The appellate court agreed with Mr. Matissek – it found that the 1977 amendments could not stand on their own – those amendments were revisions (or re-statements) of the 1971 document. The amendments were not “muniments” of title. These amendments did not change or modify the title to the property and were not considered a “vital link in the chain of title”. It didn’t matter that the amendments were recorded within 30 year period. The appellate court reversed the order requiring Mr. Matissek to remove the steel hangar and ruled that his property was free and clear from the Hidden Lakes Estates restrictions. Community leaders can prevent this type of situation from happening in their communities. Florida law allows homeowners’ associations to extend the restrictions if they haven’t expired. The law also allows homeowners’ associations to breath new life into restrictions that have inadvertently expired. Discuss these issues with your counsel before problems result.

While I am not an attorney I would agree the appellate court should agree with Mr. Matisse. The original CCR's is the main document that does run with the land. Amendments are "changes" to that original document agreed to by owners of properties attached to that original document. As such they need to be recorded in order to be valid ... and yes in some instances can be written to only affect new owners and in essence "grandfather" prior owners. The section the one attorney office you noted above references:

720.301 Definitions.—As used in this chapter, the term:

(8) “Governing documents” means:
(a) The recorded declaration of covenants for a community and all duly adopted and recorded amendments, supplements, and recorded exhibits thereto;
(b) The articles of incorporation and bylaws of the homeowners’ association and any duly adopted amendments thereto; and
(c) Rules and regulations adopted under the authority of the recorded declaration, articles of incorporation, or bylaws and duly adopted amendments thereto.

If I lived in your HOA and you told me I had to abide by an "unrecorded" amendment and pursued me. I would have my attorney sue and my attorney could state per the law my client must abide by "The recorded declaration of covenants .... and all duly adopted AND recorded amendments". It does not state "adopted OR recorded" nor does it state "adopted amendments, recorded amendments, supplements ..." with commas separating which could allow separation of intent.

I just disagree with you stating to others they do not have to record Amendments because that could end up biting them in the tail end down the road if they followed that advice. In many instances a court outcome can depend on statutes presented and how an attorney argues. In the past I had some law firms tell us we supposedly did not have a case ... and they were wrong. Again, it can depend on how look at or pursue.

GwenG (Florida)
Posts: 669

Posted:

Also be aware that the current terms "governing documents" has just been adopted by the Florida legislature in the past Legislative session. As such, it cannot be retroactive. I believe that this was a legislative intent to fix a piece of the problem ie. the absence of a mandate to record Amendments. They bunched everything under "governing documents" perhaps to avoid any loopholes in the future. Though, the decision reached in Mattissek sets the MRTA issue aside and asserts that Amendments cannot "stand alone" --recorded or not. By "stand alone", I mean they do not follow a title conveyance which restricts property rights. I think THAT is the important issue.

Notwithstanding all the legal wrangling surrounding Amendments, I cannot imagine that an HOA would fail to record all its documents, whether the statute requires it or not as simply good ministerial housekeeping.

In the end, you are correct, the Legislature has recently adopted the all-inclusive language encompassing the individual documents as "governing documents". If HOA's need to be told that, then they are now told if they have kept up with the statutory changes!

In terms of any claim of Amendments on property titles, the new 720 mandate to record has no effect. Amendments, Articles, Bylaws and Rules remain outside the chain of title and do not run with the land.

There is a current MRTA-related appeal filed with a FL appellate court which seeks to remove the Amendments from the revitalized Declaration. It should be decided later this year and I will post that outcome on the separate thread here devoted to Covenant Revitalization.

Thanks for bringing up this interesting subject. It appears that we have both been down Litigation Lane with HOA's in the past and that results in distinctions that may not benefit readership. I have found on at least one other blog that Amendments to Covenants are of intense concern and hope that this thread will stimulate more than a passing glance at this important activity.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By GwenG on 04/23/2017 3:16 PM
Also be aware that the current terms "governing documents" has just been adopted by the Florida legislature in the past Legislative session. As such, it cannot be retroactive. I believe that this was a legislative intent to fix a piece of the problem ie. the absence of a mandate to record Amendments. They bunched everything under "governing documents" perhaps to avoid any loopholes in the future. Though, the decision reached in Mattissek sets the MRTA issue aside and asserts that Amendments cannot "stand alone" --recorded or not. By "stand alone", I mean they do not follow a title conveyance which restricts property rights. I think THAT is the important issue.

Notwithstanding all the legal wrangling surrounding Amendments, I cannot imagine that an HOA would fail to record all its documents, whether the statute requires it or not as simply good ministerial housekeeping.

In the end, you are correct, the Legislature has recently adopted the all-inclusive language encompassing the individual documents as "governing documents". If HOA's need to be told that, then they are now told if they have kept up with the statutory changes!

In terms of any claim of Amendments on property titles, the new 720 mandate to record has no effect. Amendments, Articles, Bylaws and Rules remain outside the chain of title and do not run with the land.

There is a current MRTA-related appeal filed with a FL appellate court which seeks to remove the Amendments from the revitalized Declaration. It should be decided later this year and I will post that outcome on the separate thread here devoted to Covenant Revitalization.

Thanks for bringing up this interesting subject. It appears that we have both been down Litigation Lane with HOA's in the past and that results in distinctions that may not benefit readership. I have found on at least one other blog that Amendments to Covenants are of intense concern and hope that this thread will stimulate more than a passing glance at this important activity.

I am aware that the term was adopted in 2015 or before (most likely from beginning, but only way to be positive is to research history changes) as noted in the statute history at the bottom of the section. The most recent change was in 2015 as noted.

History.—s. 33, ch. 92-49; s. 52, ch. 95-274; s. 4, ch. 99-382; s. 44, ch. 2000-258; s. 16, ch. 2004-345; s. 13, ch. 2004-353; s. 62, ch. 2008-240; s. 16, ch. 2011-196; s. 15, ch. 2015-97.
Note.—Former s. 617.301.

I am also aware that unless anything states shall not apply to Homeowners' Association in affect before XXX date that it is effective immediately. I am also aware that without such date that it is retroactive. In essence if changed after inception of this section and I have not followed it and made sure potential unfiled amendments were then filed it could be too bad ... so sad.

I am aware that Amendments are within the chain of title if legally recorded and do run with the land ... why ... because they are changes to the "original CCR's" which also run with the land. Florida as noted in the definition do not require By-Laws, Rules, etc. to be recorded and therefore they do not run with the land.

These are the items in Florida the Legislation is reviewing as of February 1, 2017:

http://www.floridacondohoalawblog.com/2017/02/articles/uncategorized/community-association-leadership-lobby-what-community-association-bills-have-been-filed-so-far-call-alert-for-february-1-2017/

The one that will be interesting to watch is:

HB 295, Relating to Homeowners’ Associations: The bill, among other things, increases the damages to be paid to an owner for the willful denial of access to official records from $50 per day to $500 per day, for up to 30 days; revises the turnover provisions; allows election and recall disputes to be mediated; provides for binding arbitration by the Department of Business and Professional Regulation (DBPR) for disputes involving, among other things, covenants, restrictions, rules enforcement, assessments, and official records; requires DBPR to provide training and educational programs for HOA board members; provides that DBPR may enforce the HOA Act and may investigate complaints against an HOA; and provides for a cause of action against developers by the HOA or nondeveloper members of the HOA. The bill does not provide a funding mechanism for the additional responsibilities of the DBPR and therefore, it is unclear who will pay for the cost of the additional regulation on HOAs.

LOL ... apparently some HOA's must be thumbing their noses at the current $50 per day fine, so they are fixing to have their attitudes adjusted.

GwenG (Florida)
Posts: 669

Posted:

And so the lawyers stay in business...!

This is Property Law--not HOA law. I am told that the reason Amendments do not "run with the land" is that Amendments convey nothing. Amendment is not an instrument of conveyance. Deed restrictions that are recorded outside of a property’s chain of title cannot affect the interest of a person within that chain of title.

An Amendment to a Restrictive Covenant could be conveyed to a new owner by referring to both the Amendment recording information and the recording information on the Declaration itself. That would be very unusual for a Seller to include on a Deed, however. I have seen this only once in around 200 title searches, on a deed prepared by an attorney. That would be an attorney who knew real estate and property law.

The real news is not the Homeowner Association bill described with an enhanced fine for failure to produce records (they will just continue to ignore it; there are no sanctions, penalties or an enforcement mechanism for the homeowner), it is the Condo Reform Bill, which attaches criminal penalties to many everyday, ordinary behaviors by board members. Abuse in Condos/HOA's is rampant in Florida, despite the excess of legislation. What is needed is enforcement--and to enforce, there must be a criminal penalty to certain acts.

Miami-Dade has a special police task force to investigate many Condo acts of fraud, embezzlement, election corruption and, in part, the legislation arose from the success of that task force as well as a Grand Jury Investigation of Condo abuse. It is merrily making its way through the Legislature and, if it passes--and that looks more likely than less likely--there will be a companion bill for HOA's next session in order to create parity with condo scheme.

Good Times. Stay tuned!

JanetB2 (Colorado)
Posts: 4,219

Posted:

LOL ... I believe I already proved Amendments run with the land ... they are extensions and/or changes to the CCR's and as such required to be recorded as stated in the Statute, so that they also will run with the land as noted changes (Amendments) to the CCR's.

If I had an attorney tell me otherwise ... I would definately be shopping around for another attorney.

GenoS (Florida)
Posts: 4,276

Posted:

Quote:

Posted By GwenG on 04/23/2017 8:27 PM
The real news is not the Homeowner Association bill described with an enhanced fine for failure to produce records (they will just continue to ignore it; there are no sanctions, penalties or an enforcement mechanism for the homeowner), it is the Condo Reform Bill, which attaches criminal penalties to many everyday, ordinary behaviors by board members. Abuse in Condos/HOA's is rampant in Florida, despite the excess of legislation. What is needed is enforcement--and to enforce, there must be a criminal penalty to certain acts.

There's a huge outcry against this bill outside of Miami-Dade. CAMs and HOA attorneys are sounding the doomsday call if this bill passes. According to them, no one will want to be on any Board of Directors if there's a chance they might be on the receiving end of criminal charges. The counterpoint is homeowners should only WANT directors willing to sign up for that. If a board member thinks they don't know enough - or don't want to learn enough - to steer clear of the penalties then those are the EXACT kinds of people you DON'T want on your board.

I doubt this bill becomes law with the criminal liability portion intact. And even if it does pass, nothing guarantees there will actually be a companion HOA bill for next year. I don't buy that for an instant.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By GenoS on 04/23/2017 10:28 PM

Well stated Geno ... I doubt will pass or if it does then I would have to say ... "It is very difficult or impossible to fix stupid".

I would not VOLUNTEER for any position with such added criminal pentalties. Mainly because a volunteer board member would possibly be constantly defending themselves against potential "false" accusations. If anyone is pissed off or has an ax to grind due to being denied anything or being fined ... attacking along an expanded criminal route against a volunteer board member is what will happen. Nobody in their right mind would subject themselves to that type of possible activity. My "free time" is not worth that headache!

GwenG (Florida)
Posts: 669

Posted:

I don't buy the stupid argument that "no one will want to serve on the board" for one nanosecond. Rather, it will be energizing to the many people who would otherwise serve but are shut out of the process by corrupt and insider election manipulation (which will be a crime if the bill passes). I suspect it will have the opposite effect on homeowners who will no longer be intimidated to serve alongside the bad actors of the past. I have seen good board directors resign because they would no longer be associated with the actions of the Board/Management!

The bad actors will attrition out or resign and be replaced with true fiduciaries. As for education, the LEAST educated are the bad actors! They don't want to learn and don't care about the law. This has been publicly lamented in board meetings in the past! In the case of my own HOA, I could argue that the general population is more educated by virtue of the watchdog groups calling out the "errors" of the current Board/Management and explaining "law vs behavior".

I also have doubts about a companion HOA bill if this one passes next year. Momentum may be important but I won't hold my breath. CAI (who represents developer/attorney/management/vendor interest) is quite active in opposing any consumer-friendly HOA bills.

I think that passage will breath new life into the hopes of all association-governed homeowners that someone out there does care to protect them against abuse. I was given hope by an attorney-blogger who also lobbies in Tallahassee (where the legislature is meeting) who stated his belief that if the Condo bill passes, it will virtually necessitate a companion bill for HOA. The state would be discriminatory in protecting Condo homeowners and leaving HOA owners without any enforcement vehicle.

In the past, there have been rumblings among attorneys to sue the state of Florida about the inequity between condo/Hoa. Think about the discrepancy in terms of a Condo community governed by a Master HOA! The scale of justice is already very skewed in favor of Condo regulation, which is light years more relevant and owner-friendly than HOA. As you might imagine, I am attending the attorney blogsite regularly during this legislative year!

Good Times.

GenoS (Florida)
Posts: 4,276

Posted:

Homeowners: We want you to be on our board of directors. Here's $400,000 entrusted to your care. If you steal any of it you'll go to jail.
Wannabe Director: Take out the part about going to jail and you've got a deal.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By GenoS on 04/24/2017 12:36 PM
Homeowners: We want you to be on our board of directors. Here's $400,000 entrusted to your care. If you steal any of it you'll go to jail.
Wannabe Director: Take out the part about going to jail and you've got a deal.

Geno

I believe if you do the crime, you do the time. The problem with what is being discussed if FL will make people think twice (yes, even the honest ones) from being on the BOD. Remember, crooks break the law all the time. Only the honest fear the law. The proposed law does not stop the crooks. Crooks are crooks.

DouglasK1 (Florida)
Posts: 2,046

Posted:

Quote:

I would tend to agree. There is already very little upside to being on the board (other than for those who are power hungry), this just adds another reason not to.

Escaped former treasurer and director of a self managed association.

GwenG (Florida)
Posts: 669

Posted:

"Cross the bridge" when you come to it. In the first place, it is necessary to at least discourage bad actors with big egos and power trippers from rigging elections and becoming incestuous with other like minds and management. The proven abuse factor far outweighs a "maybe" scenario that is completely unknown and not a significant risk factor.

IF it becomes difficult to seat a full board, Membership can consider reducing the number of required directors. In the meantime, corporate life does not stop.

However, I think the scare about that is hyped up to protect the status quo and will not deter those who want to serve who are not crooks or egomaniacs. There are many who might serve but fear going up against the incumbent power and have lost faith of having a fair election process.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By JohnC46 on 04/24/2017 12:56 PM

I agree with John ... Under current law if you STEAL any of the $400,000 you are supposed to go to jail whether the new law passes or not. That is essentially theft and fraud. We keep making more laws in our Country when the REAL problem is that we DO NOT enforce the current laws. While I hate to use it as an example immigration would not be a current problem if the LAWS passed by our Legislators had been followed. If they did not like their own laws then they should have changed them vs. blatantly ignoring the laws. I see this also happening to some extent in HOA's ... In my last HOA the Developers blatantly ignored the laws. Their attitudes is I have deep pockets and individuals who purchase a new home most likely do not have money to fight me in court. So ... Instead of following the law I am going to ignore it and tell owners sue me. That is why I am glad at least in my State that he who looses gets to pay attorney fees. At least it is a deterrent to make some think twice ... even though not all.

LauraT (Florida)
Posts: 15

Posted:

From Berger v Riverwind the court said

The subdivision was created by a plat recorded in May, 1957. The recorded plat contains no restrictions. However, restrictions executed at or about the time the plat was filed were not recorded until September of that year. But between the recording of the plat and the recording of the restrictions, lots 3, 5, and 6 were conveyed. It is urged by the homeowners that since the original purchasers had actual notice of the restrictions at the time they purchased the property, the delayed recording of the restriction was immaterial.
The developer first contends that the restrictions had no validity until they were recorded and that even if the initial purchasers had actual notice of the restrictions, the property could not be affected by the restrictions. We disagree. While it is true that a developer cannot for the first time create valid restrictions where none previously existed after he has sold the property claimed to be subject to the restrictions,2recording the restrictions is not essential to their validity. See A & P Inv. Group, Inc., v. Circle Property Owners Ass'n, Inc., 741 So.2d 1139 (Fla. 4th DCA 1998) (relying on “black letter law” principles that the agreement is not a covenant running with the land because it does not contain the word “assigns,” because it was not contained in a deed, and because it was not recorded, is not on point because the principles recited do not apply where the subsequent owner has actual knowledge). The question as to these lots is whether actual notice existed.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By LauraT on 04/25/2017 9:17 AM
From Berger v Riverwind the court said

The subdivision was created by a plat recorded in May, 1957. The recorded plat contains no restrictions. However, restrictions executed at or about the time the plat was filed were not recorded until September of that year. But between the recording of the plat and the recording of the restrictions, lots 3, 5, and 6 were conveyed. It is urged by the homeowners that since the original purchasers had actual notice of the restrictions at the time they purchased the property, the delayed recording of the restriction was immaterial.

Hi Laura:

We are not attorneys however I would contend that the Developer messed up. He should have filed the CCR's prior to selling any other lots. If documents are not filed with County Records prior to a purchase then they potentially are not attached to the property titles. You potentially have a battle on your hands to include those lots.

LauraT (Florida)
Posts: 15

Posted:

I am not an attorney either. This is a case in Florida that. It was ruled on by the court. I may be reading it wrong but it seems to say that even though they were recorded after the sale of some of the lots, the CCRs could still "run with the land" so long as the owners had actual notice. They were still expired due to MRTA in this case. I am curious if that same principle would have applied to a preservation attempt. Eg if they held the meeting, voted on preservation, sent letter to members with the preservation notice, but recorded the notice a while later.

Also curious to know if you can amend CCRs that have expired due to MRTA on some of the lots.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Looking at that case and others also referenced within ... potentially in FL it appears can add if was given notice. However, the fact of given notice would need to be proved.

Good ole MRTA ... sigh

Here are some links from law firms:

https://www.floridabar.org/divcom/jn/jnjournal01.nsf/Author/A8A8DA7514A6718885256FF10060DF88

http://www.kbrlegal.com/homeowner-associations-be-aware-and-wary-of-the-marketable-record-title-act/

And here is the State Statute:

http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0712/0712.html

GwenG (Florida)
Posts: 669

Posted:

Laura: that is an interesting question and most certainly above the pay grade of most of the contributors here.
While it is true that most people here are not attorneys, many contributors here have read extensive legalese and dealt with many legal questions in their associations with HOA/condos. They have an educated voice drawn on exposure to legal principles and doctrines exposed during their experiences and many have superior communication skills and are able to distill into lay language. I would never act upon the opinion of contributors here but it can be valuable in shaping better questions and shining a light on alternative directions to pursue.

To your question: I think that if the Preservation was validly adopted, recorded and indexed against parcels, that would presuppose that "constructive notice" had been given to parcel owners (since FS712 requires written advance notice of the board meeting at which the proposed preservation must be voted on by the board). Also, the Preservation does not become effective until recorded, so if the Association filed late and a parcel's CCR's expired in the interim, too bad so sad (IMO). However, I suppose that HOA attorney could argue that the parcel had "actual notice" (a less rigorous standard of notice) of the impending Preservation over the parcel and was within its authority to encumber the expired parcel.

I think Bergerwind speaks more to the power of amendments "... amendments do not create a new root of title and thus do not extend the life of older covenants." A big difference is that the statutes are creating the authority to bind property in the Preservation of Covenants-not the HOA corporation- so I don't think that Bergerwind is really on point, as I understand what you are asking.

IMO if one or more of the parcels indexed had already been expired by MRTA, then the Association would have slandered those titles by recording the Preservation over those expired lots.

In terms of "Can you amend CCR's while parcels are expired?" Yes, IF the amend is done according to the Covenants still in effect on the remaining parcels eg. if 90% of parcels are not yet expired, then the amendment can be adopted by 66 2/3% of the reduced membership (unless governing documents specify greater or lesser affirmation). The parcels that have expired have no standing to vote for an amendment to Covenants which no longer exist on their parcel.

GwenG (Florida)
Posts: 669

Posted:

and a PS: a Title searcher would flag this lot during a search and refer to Title Company to get an attorney opinion. That underscores the critical importance of recording. The public must rely on recorded information when making a property decision. An attorney opinion of a title that had a Preservation recorded after expiration of Covenants would say "Invalid Preservation". It would be a cloud on the title that must be removed.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By GwenG on 04/25/2017 7:35 PM
and a PS: a Title searcher would flag this lot during a search and refer to Title Company to get an attorney opinion. That underscores the critical importance of recording. The public must rely on recorded information when making a property decision. An attorney opinion of a title that had a Preservation recorded after expiration of Covenants would say "Invalid Preservation". It would be a cloud on the title that must be removed.

Good point!!! ... That could also be a potential argument for any property sold prior to CCR's attached. Those owners could file with their Title Insurance to protect what was disclosed to them by their Title Insurance Company when purchased. That would potentially be my argument in a court case ... In which case I would potentially disagree with a Court stating otherwise. It goes back to the fact documents should be properly filed so that consumers, mortgage lenders, title insurance companies, etc. can perform due diligence.

GenoS (Florida)
Posts: 4,276

Posted:

And there it is... Special Interests Are the Only Ones Who Have a Voice in Florida.

Florida house and Senate quietly stripped out the bill's provision criminal misdemeanor charges for board members who "knowingly and repeatedly" refuse to provide documents to which the owners are entitled.

The legal abuse will continue until morale improves.

GwenG (Florida)
Posts: 669

Posted:

@Geno

Where did this information some from? I read the original bill (as of yesterday) and the current amended one and the criminal penalities are not only there, but they were expanded with references to specific statutes.

Did I miss something? What is the source for the newspaper article?

Thanks.

GenoS (Florida)
Posts: 4,276

Posted:

I first saw it at this link which was an article in Spanish (with a rough Google Translation into English at the end). Then it popped up on the Miami Herald website (also linked in my previous post). I think the bills are SB 1682 and its companion HB 1237. The impetus for this legislation is mainly coming from Miami-Dade, from what I understand.

GwenG (Florida)
Posts: 669

Posted:

Geno, thanks for that. I did read the article but am still a bit confused. I went to the legislative gov site and read the original bill, as submitted, and all the amendments to date. The original submitted bill did not have a penalty for refusal to provide records. I am thinking that perhaps the original proposed bill and the original submitted bill were two different bills. If so, where was the original proposed bill with the criminal penalty language published?

So far, all the other criminal penalties of the bill are intact, as amended. I do not understand why the resistance is so great against providing records. Especially now that the new amendment contains a boatload of documents that MUST be posted on the Condo website in all Associations of 150+ parcels and which must be up and running by July 2018. That kind of transparency mandate almost precludes "refusal" to reveal documents.

It is especially perplexing that this requirement has been toughened up yet Tally still refuses to attach criminal penalty to board refusal.

GenoS (Florida)
Posts: 4,276

Posted:

The published articles I've read on these bills, including *this latest one* from today, all say that it's the "lobbyists and lawyers" who object to the criminal provisions. Recent reports out of Miami, including some sort of Grand Jury report, caontain scathing denouncements about how Florida's HOA and Condo laws have no teeth.

If an owner can't get access to the election materials after an election how can he or she mount a challenge? Rigged elections with a board in cahoots with the property manager and/or attorneys is the single largest complaint fielded by Florida's DBPR.

The lobbyists and lawyers claim they oppose it because it will reduce even further the already small pool of owners willing to serve on their board. A slightly more foily explanation is that rogue boards keep the money flowing to the CAMs and attorneys and they, in turn, are only too happy to help those boards achieve their objectives, the law be damned.

This page -> Florida Senate bill tracking <- is very dense with a lot of information, but the "Original Filed Version" of HB 1237 (March 3) has a PDF link that has the language creating a second degree misdemeanor on page 8 of the PDF. The "Committee Substitute 1" version of March 21 contains the same language on page 8 of the PDF. The "Committee Substitute 2" version of April 24 does not contain the misdemeanor provision, nor does the current version of April 28 (i.e. today).

GwenG (Florida)
Posts: 669

Posted:

Aha! The missing piece of info. I am only tracking the Senate Bill 1682. The Senate Bill apparently was not filed with that provision included.

Thanks.

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