Owner Sues HOA Board for Failing to Preserve its Governing Restrictive Covenants in the Public Records (MRTA). Court confirms the Obligation of HOA’s to Do So.

A property owner in Palm Beach County Florida has sued her homeowner’s association for failing to take affirmative action related to the preservation of its governing documents under the Marketable Record Titles to Real Property Act (“MRTA”) as set for in Chapter 712 of the Florida Statutes. Pursuant to Florida Statutes 720.005 and 720.006, in order to preserve an association’s restrictive covenants, certain actions must be taken prior in time the expiration of the restrictive covenants. MRTA, which does not affect condominium associations, was enacted in 1963 and was meant to simplify and facilitate real property transactions and provided that, unless properly preserved under the procedures enumerated in the statute that claims against real property, which includes the declaration of covenants will expire after thirty (30) years.

The MRTA statute provides for a mechanism to “preserve” the governing covenants for another thirty (30) year period and includes requirements for filing certain public notices (which are recorded in the Public records of the county in which the HOA is located thereby putting the public on “notice” of the existence of, and importantly, the enforceability of its governing declaration).

In the case of Southfields of Palm Beach Polo and Country Club Homeowners Association, Inc. et al, versus McCullough (Case No 4d11-1130 and 4d11-4659, April 2013), property owner Victoria McCullough sued the Association in Circuit Court alleging that the Board of Directors was refusing to preserve the Association’s governing declaration by failing to record a notice of preservation allowed under Florida Statute 712.05. The Court determined that the declaration was intended to preserve the equestrian nature of Southfields of Palm Beach Polo and Country Club Homeowners Association, Inc. which required the board to exercise it powers (and obligation) to preserve and maintain its governing declaration (up until and to the point in time at which 95% of the property owners voted to dissolve the declaration and also dissolve the Association, something which seldom ever happens).

The Fourth District Court of Appeals (4^th DCA) upheld the trial court’s decision and clarified the obligation of HOA boards to take planned and specific action to ensure that the governing restrictive covenants doe not expire under MRTA. All HOA boards are cautioned to review their governing documents and to speak with their Counsel in regard to preserving their governing declaration.

For more information or for assistance with MRTA related issues, please contact Bakalar & Associates at 954-475-4244 or by email to info@assoc-law.com.