HOAs Beware! MRTA is Coming.

For unwary homeowners’ associations, a danger is lurking beneath the water’s surface.  If one is not careful, it will strike, swallowing whole a community’s restrictive covenants.

I speak, of course, of the Marketable Record Title Act, known as MRTA, which is found at Sections 712.01-712.11, Florida Statutes.

MRTA exists to simplify real estate transactions.  It allows buyers and sellers to rely, essentially, on a short, 30-year, title period.  Otherwise they could conceivably have to research a property’s title back to the Florida’s founding (or longer).  MRTA provides that, except for claims and restrictions preserved by Section 712.03, “a person ‘vested with any estate in land of record for 30 years or more’ has ‘a marketable record title . . . free and clear of all claims [and restrictions]’[.]”  Sunshine Vista Homeowners Assoc., Inc. v. Caruana, 623 So. 2d 490, 491 (Fla. 1993) (quoting Section 712.02).

Simply put, HOAs can discover, after three decades in operation, that their governing documents are extinguished and no longer enforceable!

Two exceptions in Section 712.03 can be relevant.  The first exempts any “restrictions disclosed by . . . the muniments of title on which said estate is based beginning with the root of title[.]”  Section 712.03(1).  The second exemption from MRTA are “interests, claims or charges arising out of a title transaction which has been recorded subsequent to the effective date of the root of title.”  Section 712.03(4).  Amendments to, and restatements of, a community’s restrictions are not generally considered to be either “muniments of title” or “title transactions.”  Matissek v. Waller, 51 So. 3d 625, 629-30 (Fla. 2d DCA 2011).

If you fear that your neighborhood’s restrictions are in danger, or may have already expired, there is a remedy.  Under current law, the quickest and least expensive is to approve and record the Notice of Preservation described in Section 712.05.  Alas, this option is time-sensitive and may not suffice if MRTA has already extinguished the covenants.  In that instance, the remedy is to revitalize the restrictions following the procedures set forth in Part III of the Homeowners Association Act.

Awareness is the best defense.  Ask your attorney to conduct a MRTA analysis.  If a remedy is needed, the law can provide one.

Post Date: May 1, 2018

By: Robert C. Chilton

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