The Florida Marketable Record Title Act (“MRTA”) was enacted in 1963 to simplify conveyances of real property and provide greater certainty to landowners. Generally, MRTA provides that any person holding any recorded estate or interest in land for 30 years or more has title to the land, free and clear of most claims or encumbrances. By eliminating many old and stale title claims, MRTA makes examining title to real property less labor intensive. An important effect of MRTA is that covenants and restrictions may be extinguished 30 years after their creation.
Restrictive Covenants Imposed by Governmental Zoning Approvals Are Not Subject to MRTA
Recently, in Save Calusa Trust v. St. Andrews Holdings, Ltd., et al., Nos. 3D14-2682 & 3D14-2690 (Fla. 3d DCA Jan. 13, 2016), the Third District addressed whether a restrictive covenant that is recorded in compliance with a government-imposed land use approval is a title interest subject to extinguishment by MRTA. The developer in that case sought both a rezoning and an “unusual use” approval in 1967 to create a new golf course development in Miami-Dade County. In a resolution approving the developer’s “unusual use” application, the County’s Zoning Appeals Board imposed a restrictive covenant requiring the property to be perpetually maintained as a golf course. Thereafter, the restrictive covenant was recorded in 1968, and the developer subsequently sold the property. In 2012, after acquiring the subject property and realizing that the golf course was no longer profitable, the subsequent developer/owner filed an action in circuit court to declare the restrictive covenant void, arguing it had been extinguished under MRTA. The Third District disagreed and held that because the restrictive covenant had been imposed through the governmental zoning reclassification approval process, the covenant did not fall within the purview of MRTA’s extinguishing effect.
Impact of Proposed MRTA Amendments
As currently written, MRTA extinguishes a homeowners’ association’s covenants and restrictions after 30 years, unless the association timely files a renewal or the covenant or restriction is recorded in the chain of title. Even if a homeowners’ association fails to re-record and fails to timely file a renewal, its covenants and restrictions may still be revived and therefore would remain enforceable.
CS/HB 7031 proposes several amendments, the most important of which creates a new exception to the law’s applicability. The proposed exception provides that the covenants and restrictions of a homeowners’ association are not extinguished by the operation of MRTA. However, CS/HB 7031 also creates four conditions under which this exception does not apply:
- To a covenant or restriction that was extinguished by operation of MRTA prior to July 1, 2016;
- If the terms of the covenant or restriction as originally recorded, or subsequently amended, provide for expiration of the covenant or restriction;
- If a property owner attests in an affidavit that the association has been administratively dissolved and no longer has responsibility under a government permit; or
- To a covenant or restriction of an association if a circuit court finds in a declaratory judgment action that the association has been abandoned, no vote of the membership is practical, continued enforcement of the covenant or restriction is not equitable, and as a result thereof the covenant or restriction is void, terminated, or released.
The bill also adds the new term “mandatory property owners’ association” and amends MRTA’s renewal provisions to apply to both homeowners’ associations and mandatory property owners’ associations. If approved, CS/HB 7031 will be effective on July 1, 2016 and will not be retroactive.
Following the Save Calusa Trust case, it is clear that covenants and restrictions imposed through a governmental approval process are not subject to extinguishment by MRTA, but those imposed by a homeowners’ or property owners’ association certainly are. If adopted, the new exception and definition will likely save many associations both time and money by not having to be as active in ensuring the preservation of their covenants and restrictions.
If you have any questions regarding the recent MRTA decision or legislation, please contact Henderson Franklin’s Real Estate and Land Use Department.