New president inherited a mess

I have lived in my town home for almost 2 years. I was nominated to be president a few months ago. I had been a board member the previous year although I did not do anything. Today I spoke with an attorney and learned our documents have not been refreshed in over 30 years, making them unenforceable. The HOA needs a lot of work as it has been neglected for quite some time. I had a vision to revitalize the property; however, I'm unsure trying to follow through with my goals would be worth the hassle as I feel I have inherited a disaster which would be soul sucking to mend. Several weeks ago my immediate neighbor changed and it has not been for the positive. I am now considering resigning and moving as I would prefer to keep my life as peaceful as possible. Any words of wisdom from those with experience would be greatly appreciated.

Whoops - forgot to ask - you were elected as a Board member by the membership, and then by the Board as the President?

While you still have HOA funds to pay this attorney, ask the HOA attorney what she or he advises. If possible, see if the HOA attorney will lay out the main steps and options the HOA might take.

I think one of the first steps may be to be completely honest with the membership. I think you may have zero legal authority at this point. I would proceed with the latter in mind.

The board

Very few board members would admit to that; thanks for being honest (just kidding)


I sympathize with your position. There's a lot of that here in my HOA as well. People come in fresh, get on the board, propose measures to make life better for the members .... and hit a brick wall. Some will persevere for a year or two but in the end they get burnt out, throw up their hands and walk away. It sounds like you at least were trying.

What was the reason given to you by the attorney as to why your 30-year-old documents were unenforceable? If you're technically an HOA under Chapter 720 of the Florida statutes then it's possible that what's known as Florida's MRTA statute has worked to extinguish your CC&Rs. That's not the case for a Chapter 718 Condominium Association.

The governing documents in my HOA have had half a dozen amendments over the years (the Association was incorporated just over 30 years ago), but are mostly unchanged and are badly in need of revision. But that doesn't mean they're unenforceable. If MRTA, however, has extinguished your Covenants (Declaration of Covenants, CC&Rs, etc. known by various names) then your attorney is quite possibly right. My own HOA recorded a Notice of Preservation 5 years in advance of the 30-year MRTA deadline and thus preserved our CC&Rs for another 30 years.

It's possible to "revitalize" your association but that takes work and if, as you stated, you've inherited a disaster, then it may not be worth the trouble. You should be aware that any group of homwoners can file for a Revitalization of your association, but a revitalized HOA cannot have covenants or restrictions that are more restrictive than the ones that expired. That could be a problem if your 30-year-old CC&Rs are so creaky that additional restrictions were needed.

The first thing I'd check on is if MRTA, in fact, is the reason your governing documents can no longer be enforced.

Yeah, that's not a comfortable place to be. Years ago when I first became the Secretary here I remember thinking to myself, "Great! Now that I'm on the board I'll be privvy to the inside scoop about everything that's going on around here!"

There was nothing.The board would have monthly meetings, do a little of this, a little of that (mostly maintenance and landscaping), but nothing in between meetings. There was almost zero engagement by the board on anything besides making sure the bills were paid. Which was a good thing, but with documents that hadn't been revised in almost 30 years there were a lot of discussions that should have been taking place, but weren't. Believe me, that first year we had 4 of 7 board members who really weren't doing anything other than being a warm body in a seat at the board meetings. Not quite a disaster but on a clear trajectory toward that destination.

If MRTA has extinguished your CC&Rs, then you don't have to pay assessments and, whether the others believe it or not, there's no way they can make you.

Here's a good MRTA oververview from the Florida Bar Association. It was enacted in 1963 for the purpose of helping to clear out old title defects for property in Florida. There was a lot of cruft in deeds, some dating back to the Spanish land grants. MRTA basically said if a deed restriction was over 30 years old, then it was declared null and void. When HOAs came along, they found that, quite unintentionally, MRTA also applied to residential property deeds and covenants imposed on them by HOAs. There has been talk for years by the legislature for carving out an exemption for HOA declarations and deed restrictions, but like so much else where the Florida legislature is concerned, there's been a lot of talk but no action.

The best thing HOAs can do is file a "Notice of Preservation" with their county which keeps the deed restrictions intact for another 30 years. The MRTA statute itself can be found here. It should also be stressed that there are a LOT of attorneys in Florida who don't understand MRTA well, if at all, and "bad advice" from attorneys on issues concerning MRTA is abundant. A few posters here on HOATalk have been burned by it in various ways.

When MRTA extinguishes deed covenants it does so on a property-by-property basis. Your CC&Rs won't "expire" all at once. The 30-year period doesn't begin until a property is first sold with the deed restrictions attached.

I'm not an attorney but I would definitely check to see if a Notice of Preservation was ever filed for your association. Many counties in Florida maintain a website where their Official Records are available online. You might be able to search online for such a Notice. The 30-year clocks probably started to run out (every parcel has its own clock) ca. 2008, so you can posibly limit your search to official records filed before 2009. The Notice has to be filed before the clock runs out. After that, you're stuck with a Revitalization, which can also be a lot of work.

Read Part II of FS 720 which you can find here. Sections 720.404, 405, 406 and 407 are the relevant subsections. In particular, FS 720.405 deals with the "Organizing Committee" and required "parcel owner approval". Notice that the Organizing Committee can be ANY 3 parcel owners, it doesn't have to be comprised of board members.

FS 720.405 requires:
"The name, address, and telephone number of each member of the organizing committee must be included in any notice or other document provided by the committee to parcel owners to be affected by the proposed revived declaration."

See if that information is included with whatever the attorney wants you to sign. Improper revitalizations have been attempted in the past. Several examples have been recounted here on these pages over the last few years.

One problem is that the Florida Department of Economic Opportunity is in charge of approving or rejecting a prosed revitalized Declaration for the community, and they rubber stamp EVERYTHING. One poster here found his home dragged into an HOA that was revitalized even though his home was never a part of the original HOA in the first place. His home was listed as part of the Revitalization documentation and the Department of Economic Activity approved the revitalization without ever reviewing the materials that were submitted for accuracy.

Sometimes people try to do an end-run around expired covenants by telling owners, "Sign this paper and you're back in". Which is probably illegal (again, I'm not an attorney) since there's a whole list of things that have to be done in FS 720.405-406. It's cheaper to just cheat and, in Florida, people have been known to get away with it because there's evidence that the DoEO is incompetent, doesn't do any homework, and allows it.

Personally, I would be wary of signing anything.

AnaD,

They key part of your original post that I focused in on was:

"I'm unsure trying to follow through with my goals would be worth the hassle as I feel I have inherited a disaster which would be soul sucking to mend. Several weeks ago my immediate neighbor changed and it has not been for the positive. I am now considering resigning and moving as I would prefer to keep my life as peaceful as possible. Any words of wisdom from those with experience would be greatly appreciated."

Other people have responded with great advice on how to clean up the mess. However, before you even get to this point you have to resolve the most important thing, is your heart in it and do you want to take it on? I also reluctantly became the president of an HOA that was a complete mess like yours. 1981 governing docs, insufficient reserve funds, poorly maintained condos and common areas, etc, etc. When I was asked to take over I asked for a week to think about it. During that time I basically took a self inventory of myself. Did I have the management and analytical skills needed to lead the effort to change things? Was I willing to immerse myself in how HOA should run and educate myself adequately? Was I willing to be a punching bag when residents complained and did I have the personal skills to handle these situations emotionally? Most importantly, would I enjoy it or would the end result be worth the pain if I didn't? In the end I decided to accept and I don't regret it. I am a fixer by nature and I enjoy a good challenge and the satisfaction that comes from solving problems. The other thing that motivated me is that I love my condo and the neighborhood and this gives me an additional incentive to keep going forward. I've learned a ton and thankfully we have made a tremendous amount of progress. I've been beat up along the way and suffered some setbacks but the positives have outweighed the negatives.

My advice to you is dig deep, examine your motives and decide if you have the time, skills and emotional fortitude to turn your community around. If your sincere that you want to keep your life as peaceful as positive and you don't like your new neighbor then you may be right to get the heck out of Dodge and never look back. It's a personal decision and there is no wrong answer. I wish you well on whatever you decide!

So far one of the other board members has been pushing for painting the building and increasing the monthly dues. Now that I'm aware the docs are expired I feel like they take priority. Would you agree? Is it even legal to increase monthly dues or use a substantial amount of the current funds to paint the building if the documents are expired?

I would All Stop every expenditure that was not absolutely essential.

First, you will need that money to revitalize your CCRs.

Second, you want everyone to become acutely aware what will happen when there are only voluntary dues being paid, because the CCRs have been "EXTINGUISHED" by MRTA.

If you have no CCRs you don't have a Board, you don't have an Association, etc ...

Get on revitalization immediately!!

I'm with George. Get it done ASAP. If you're willing to stay (and John's post was most excellent about asking yourself if you've got the time, desire, and wherewithal to do it) you yourself, plus two other owners, could form an "Organizing Committee" and file the requisite paperwork to start the Revitalization process. Something tells me there are probably other efforts, like another Organizing Committee, already taking place.

You ask about increasing monthly dues. If MRTA has, in fact, extinguished your covenants then there's a good chance that THERE ARE NO MANDATORY DUES RIGHT NOW since the authority to pass mandatory assessments expired along with the CC&Rs 12 years ago. Any dues that are being paid are voluntary at this point and maybe have been for the last 12 years.

Someone is paying that attorney and if he's being paid with funds that the HOA was no longer able to legitimately compel the owners to pay, then there could be big trouble ahead, such as owners asking for 12 years' worth of refunds since they had been paying under false pretenses. No wonder somebody hired a lawyer to assist in covering it up. What they want you to sign could be part of a larger CYA strategy.

This is all hypothetical, of course, until you have all the facts in hand.

I reached out to the attorney to inquire about modifying the documents and then he told me they need to be revitalized before any of that could happen. To my knowledge, no attorney has been paid.

AnaD, is this a subdivision of stand-alone homes or townhomes, subject to Florida statute 720? Or is this a condominium subject to Florida statute 718? Read the first couple of pages of the Declaration, and they may tell you.

The HOA is one side of the street. It is 4 buildings, each with 6 individual units, so 24 pieces of property and "common areas."

GeorgeS2 and GenoS, if you email me at the above address, and if AnaD is okay with it, I would be happy to share with you the Declaration AnaD just emailed me. The community consists of homes whose end units share exactly one wall and middle units share two walls. They are not units that are on top of each other. The Declaration dates to 1982. It appears to me it is subject to Florida statute 720, but I would like your opinion. Or maybe it is obvious to you that this is a townhome community subject to 720?

AnaD's Declaration makes no mention of being a condominium or being subject to the Florida Condominium Act. The HOA is duly registered with the Florida Secretary of State as a not for profit corporation. The HOA corporation appears to be up to date with its required annual report. The Florida Condo Act to me indicates that, if a community were organized as a condominium, the Declaration would say this.

Because of all this and the layout of the community, I think this is a HOA subject to Florida Chapter 720.

The MRTA is difficult to read. Here's one law firms take on one option this HOA appears to have:

====Start Excerpt from https://www.sweeneylawpa.com/understanding-floridas-marketable-record-title-act/ ===
The [MRTA] mandates a lot-by-lot examination to determine which lots would no longer be compelled by the covenants and restrictions. To make this determination a title search would be performed for each lot. Then one would look back more than 30 years from the current date to discover the first “root of title” for the subject lot which is older than 30 years. The “root of title” is characteristically a deed. If no deed in the chain of title starting with the “root of title” references the restrictions and covenants precisely by name, then that subject lot is no longer bound by the covenants and restrictions.
====End Excerpt=====

AnaD, for starters, can you check your deed to see if it has explicit, exact language stating that your home/lot is subject to the Declaration of Covenants (citing the covenants by name and hopefully page number within county records)? If so, then it may be worth a trip to the county clerk to look at the chain of title for your home and see if it meets the above criteria (mentioning exactly the Declaration). If your home does, other homes may. If all 24 homes meet this criteria, then instead of having to revitalize, a board vote may be sufficient to "preserve."

===Continue Excerpt======
However, if at least 1 deed beginning with the “root of title” states the covenants and restrictions by specific name, then that lot continues to be bound by the covenants and restrictions. If it is established by this lot-by-lot analysis that each lot is still bound to the covenants and restrictions, despite the fact that they are older than 30 years, then the Association would be entitled to preserve the covenants and restrictions.
======End Excerpt=====

An attorney will be needed. A board majority will have to be convinced. But the above is the sort of homework I think one should do before meeting with an attorney.

Or the option to walk away is always there.

I agree it is likely that revitalization is the only option here. For academic purposes --This is not the way I read the law firm site I quoted. Other sites seem to say similar. E.g.

"Covenants can also be preserved in the chain of title to a lot by the recording of a deed which references the covenants by the Official Records Book and Page within the last 30 years. This is why a title search is necessary before an opinion can be rendered whether or not the covenants expired against that particular lot."

-- https://stagelaw.com/the-marketable-record-title-act-mrta/

I do not think your wording reflects what the law firm sites say. Whatever.

In my title paperwork there is a page referencing the Planned Unit Development Rider which says I'm to follow the Declarations but it is not specific referencing books or pages nor was it signed by me or a witness.

While there are a few subtleties, I’m not sure there is a Board any longer.

One could make the point there is a Board, but this isn’t even clear to me ... frankly, extinguishment of the CCRs is so incredibly damaging, all focus should be on the revitalization. Is there even a NFP corporation without the binding powers of the CCRs?

I believe “expiration” is an inaccurate term in this case - usually used when CCRs have a date when, unless extended, they cease.

In this case, Florida law “extinguished” them ... the 1963 MRTA has probably destroyed hundreds of communities.

The MRTA apparently trumps this clause in your Declaration. For discussion and citations, see

https://www.hoatalk.com/Forum/tabid/55/forumid/1/tpage/10/view/Topic/postid/149433/Default.aspx

and

https://www.hoatalk.com/Search/ForumSearch/tabid/87/view/topic/postid/225717/Default.aspx

The board is meeting this afternoon. If they do not see the urgent need to prioritize revitalization, I think I'm going to throw in the towel.

Board member replying to my urgent request to update the declarations: "I believe this is a board related matter and should be handled by the board and briefed to the owners.
That's why we have a HOA Board. No one individual can go out on their own and use HOA Funds without board approval and I would think the owners buy-in considering no one knows what this will cost or how long it will take and if we can afford the update of Declarations and Painting projects as you already guessed."

Strongly agree with Augustin.

I'm not sure you and your Board realize how serious this is.

If I were to attend your Board meeting, I would assess the actions being taken to revitalize - potentially even vs the other actions - and, if I sensed the Board did not understand the deep hole the community is in, I would tell them something like the following - and, provide it in writing as appropriate.

"Based on your lack of understanding of our now extinguished CCRs, I am withholding my assessments as there is no longer an HOA. If you don't move out of this, I will start my own organizing committee and begin the process provided in FS 712, to revitalize our CCRs. Part of this would include explaining the circumstances to members, and asking them to provide whatever they would have been paying for dues, instead, to the organizing committee so that we may engage with an HOA attorney, put together our revitalization package, collect the necessary signatures, and file for revitalization."