It is important that property associations/community associations (like HOAs/Condos/POA/s) know the age of their association documents, including the declaration, covenants, and restrictions, to ensure that they have not expired or been extinguished by MRTA. Extinguishment of such covenants and restrictions means that the association is no longer able to enforce its restrictions and generally manage the community (collect assessments). The good news for property associations is that MRTA provides methods to both preserve these documents before they are extinguished and revitalize these covenants even after extinguishment. §§ 712.06, 712.11 Fla. Stat. MRTA often poses more of a concern for homeowners’ associations as the deed and consequently the chain of title generally does not reference these recorded covenants and restrictions. This differs from the chain of title in a condominium, where the face of the deed will specifically reference the declaration, the book, and the page where it is recorded.

IMPACT ON CONDOS

They are unique cases whereby the Condo documents could be effected by MRTA. While MRTA rarely impacts condominium communities due to the unique nature of their chain of title, when the declaration, covenants, and restrictions are not mentioned in the “muniments of title” they are subject to extinguishment under MRTA. Typically a CONDO deed contains a legal description which makes reference to the declaration specifically by its recorded book and page numbers, therefore protecting the CONDO documents from extinguishment under MRTA. However, where the deeds do not make such references, these documents are subject to extinguishment after 30 years under MRTA.

Prior to a 2018 amendment to MRTA and a 2019 decision in Eastwood Shores Property Owners Association, Inc., v. Department of Economic Opportunity, 264 So.3d 264 (Fla. 2d DCA 2019), a condominium could not revive its covenants under MRTA. This is because the section of MRTA governing revitalization referred specifically to homeowners’ associations or an association of parcel owners. § 712.01(4), Fla. Stat. (2016). This created a problem for the association in Eastwood Shores.

The Eastwood Shores Decision

In Eastwood Shores, the condominium association’s covenants were extinguished under MRTA because they were not referenced in the deeds of each unit. The association applied for revitalization of its covenants and was denied by the Florida Department of Economic Opportunity because it was not a homeowners’ association. Eastwood Shores, 264 So.3d at 265. Therefore, amendments were made to the MRTA statue in 2018 (see above).

These amendments are significant for condominium associations because they are now specifically included in the definition of associations that are covered by MRTA. This is means that in situations similar to Eastwood Shores, the condominium association will more simply be able to revitalize its covenants in accordance with the procedures set forth in § 720.403-720.407. § 712.11-12, Fla. Stat.

If your community has not reviewed your governing documents and discussed the possibility of extinguishment under MRTA please contact a lawyer to do so. Our office specializes in all areas of community association law.

If you are interested in speaking to a Kistemaker Business Law Group lawyer or want general information about the firm, our practice areas, lawyers, publications, or events, please contact us via email or telephone information contained on our website at www.daytonabusinessalawyers.com.

If a unit owner does not pay his or her assessments, the condo association has the power to file a claim of lien and, ultimately, foreclose on the unit. But in order to do the above, the condo association must strictly comply with the statutory pre-conditions and requirements which follow:

1 – Perfecting the Lien: Call or send a nice Reminder/Demand Letter (Optional)
Contact the owner And let them know they are late in paying their assessment. This simple step may result in the unit owner paying all amounts due and owing, without any additional action required by the association.
 2 – Notice of Intent to Record a Claim of Lien (mandatory pre-condition)
A notice of intent to lien is a formal statutory letter sent to the delinquent unit owner stating the association’s intent to place a lien on the unit for the owners failure to pay assessments. The notice of intent to lien must be delivered to the owner of the unit by both registered or certified mail, return receipt requested, and first-class United States mail to the owner at his or her last known address as reflected in the records of the association. If the address reflected in the records of the association is not the condominium unit address, the notice of intent to lien must also be delivered to the owner at the address of the unit. Delivery of the notice is deemed given upon mailing. § 718.121(4), Fla. Stat. The association must give the owner thirty (30) days to pay the outstanding balance before proceeding to the next step.
3 -Record the Claim of Lien
Thirty (30) days after sending the notice of intent to lien, the association can record the claim of lien in the public records. § 718.121(4), Fla. Stat. In Florida, the claim of lien must be drafted by an attorney because a legal description is required and it creates property rights. To be valid, the claim of lien must include:
• a legal description of the condominium parcel;
• the name of the record holder;
• the name and address of the condominium association;
• the amount due;
• the due dates; and
• it must be executed and acknowledged by an officer or authorized agent of the association.
The claim of lien secures all unpaid assessments that are due and that may accrue after the lien is recorded through the entry of final judgment, as well as interest, administrative late fees, and all reasonable costs and attorney fees. § 718.116(5)(b), Fla. Stat. The claim of lien is only valid for one (1) year after it is recorded. In other words, a legal action to foreclosure the lien must be commenced within one (1) year of filing the claim of lien.
If the unit owner pays the amount owed in full, the owner is entitled to a filing and recording of a “Release of Lien” in substantial compliance with the form found in in § 718.116(5)(d). The unit owner may contest the lien by filing a “Notice of Contest of Lien.” If the unit owner files a Notice of Contest of Lien, the association must commence a legal action to enforce the lien within ninety (90) days from the date the association received such notice. If the association does not commence an action within that ninety (90) day period, the claim of lien is voided. § 718.116(5)(c).
4 – Notice of Intent to Foreclose the Lien
The condominium association must provide written notice to the unit owner of its intention to foreclose its lien thirty (30) days before filing a lien foreclosure action. The notice must be delivered by physically delivering a copy to the unit owner, or by certified or registered mail, return receipt requested, addressed to the unit owner at his or her last known address. The notice is deemed to have been given at the time of mailing. § 718.116(6)(b).
5 – Foreclose the Lien
Thirty (30) days after the condominium association provided written notice of intent to foreclose, the association may bring a legal action in its name to foreclose the lien in the same manner a mortgage of real property is foreclosed, and may bring an action to recover a money judgment for the unpaid assessments without waiving any claim of lien. The association is entitled to recover its reasonable attorney’s fees incurred in either action. § 718.116(6)(a). At the foreclosure sale, the association has the power to purchase the condominium unit and to hold, lease, mortgage, or convey it. § 718.116(6)(d).

Watch our HOA / Home Owners Association Board Member Certification Webinar with host Erum Kistemaker, Managing Partner of Kistemaker Business Law Group.

After an HOA foreclosure action has been filed and served on an Owner, BUT PRIOR to the Court entering a final judgment in the action or ordering the foreclosure sale, a homeowner can file a “qualifying offer” indicating his or her intent to pay all amounts owed to the association within a period of not more than 60 days.

Fla. Stat. §720.3085(6). The filing of a qualifying offer stays proceedings and the accrual of attorney fees and costs to permit the homeowner time to satisfy the association’s claim. A homeowner may not make an effective qualifying offer if the property’s mortgage is in foreclosure, if the homeowner has filed bankruptcy, or if the trial date of the foreclosure action is set for less than thirty days in the future.

With regard to foreclosures in general, Florida law permits homeowners to “redeem” a property in foreclosure at any time prior to certification of the sale by the clerk or a later date specified by the judge in the foreclosure order. Fla. Stat. §45.0315. A home is redeemed by paying all past-due amounts, including any foreclosure costs.

With regard to foreclosures in general, Florida law permits homeowners to “redeem” a property in foreclosure at any time prior to certification of the sale by the clerk or a later date specified by the judge in the foreclosure order. Fla. Stat. §45.0315. A home is redeemed by paying all past-due amounts, including any foreclosure costs.

How many times have you thought about resigning from your home owners association’s board of directors because you are frustrated and unappreciated. I can imagine many times. However, it is important not to resign without considering the implications and later regret. It is important to note, in Florida, Section 617.0807 of the General Not For Profit Corporate Act provides that a director may resign at any time by delivering a written notice to the board of directors. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date.

The statute further provides that resignations must be in writing and most reasonable people agree that email constitutes written communication. Therefore, resigning in haste via email (which I see often) can pose a big problem for association directors who later regret that decision. The statute does not require anyone to actually “accept” the tendered resignation so if a frustrated director writes an email to his or her fellow directors tendering a resignation in the hopes that someone will talk them out of it, it is already too late as they are off the Board. Of course, he or she can appeal to the board to be reappointed to the seat he or she just vacated by virtue of resigning but there is no guarantee that will happen.

If you are an association director who is considering resigning from your board, take your time to think about this very important decision before sending a hasty email.