Post by Admin on Jan 30, 2015 9:45:19 GMT -5
Handout at the MRTA Seminar
Terms: If you read nothing else, read THIS!
MRTA FS712: In 1963, the Florida Legislature enacted the Marketable Record Title Act (MRTA pronounced “marta”), codified as Chapter 712, Florida Statutes. MRTA was intended to simplify title searches by extinguishing old title defects and other recorded issues affecting title to real property after 30 years. The underlying rationale was that “the dead cannot control the living” and that title searches should not have to go back 100 years.
An unanticipated consequence of MRTA was that it extinguished the covenants of some large planned communities, which had taken no action to prevent the covenants from being extinguished and suddenly found they had lost their legal authority to collect assessments and enforce the covenants.
Since then, the Florida Legislature has amended the statutes to provide both a process to preserve the covenants before they are extinguished by MRTA ( i.e. “preservation” ) and a process to reinstate them (i.e. "revitalization"), if they have already been extinguished (also referred to as being “MRTA’ed out”).
ROOT OF TITLE: means any title transaction which creates or transfers the property claimed which is the last title transaction to have been recorded at least 30 years prior to the time when marketability is being determined. This is when the 30-year MRTA clock starts ticking.
In S-bag, most of the roots of title began when S-bag Lake Resorts recorded the deed to the purchaser back in the 70’s and 80’s. MRTA began to expire lots in 2002, one-by-one, on their 30-year anniversary date.
TITLE TRANSACTION: typically a Warranty Deed, a Quitclaim Deed or Personal Representative's Deed (as in probate)
COVENANT: means any agreement or limitation contained in a title transaction recorded in the public records of the county in which a property is located which subjects the parcel to any use restriction which may be enforced by a homeowners’ association or which authorizes a homeowners’ association to impose a charge or assessment against the parcel or the owner of the parcel.
In law, Covenants are considered to be CONTRACTS. Covenants are the most superior of homeowner association documents (see Hierarchy).
There are many terms for Covenant, such as Declaration, Declaration of Covenants, CC& R’s, Covenants, Conditions and Restrictions, C & R’s, Deed Restrictions, Governing Documents, the “Documents”. All these terms mean the same thing. In S-bag, we refer to Covenants as the Redbook even though the Covenants were never published in the Redbook.
PRESERVATION: Extending the duration of Covenants beyond 30 years. FS712 is Very Specific on how to preserve covenants. It is not enough to say the property is encumbered with Covenants or that deed restrictions exist or that there is a homeowners’ association. One must specifically disclose the existence and location of the Declaration of Covenants—by noting the recorded Official Records Book and Page—on the deed. Sometimes, “preservation” is referred to as “renewal” or “revival”.
Preservation is accomplished by either personal deed transaction OR by an HOA recording a Notice of Preservation, which SLohA did in April 2013. It is rare that S-bag owners preserve their own Covenants; sometimes this is done when a knowledgeable attorney handles the real estate transaction. Because so many sales are closed by a title company on a generic Warranty Deed or person-to-person transactions via Quitclaim Deed, most deeds only reference that “…restrictions, IF ANY EXIST, are not reimposed hereby.” Hence, the MRTA requirement to place a specific OR Book/Page reference on the Deed is absent and covenants are not reimposed.
SLohA filed a Notice of Preservation on ALL parcels in S-bag in 2013; however, most lots had already expired and one cannot "preserve" an expired covenant.
EXPIRED (COVENANTS): means the condition of the covenants after the MRTA extinguishes them i.e. “MRTA’ed out”. Another term used is the Covenants have “ceased to govern” and “extinguishment”. Expiration/Extinguishment occurs 30 years from the root of title, unless preserved by a title transaction or the HOA.
REVITALIZATION: means a state-mandated (FS720) full and complete examination of the expired documents to assure that the revitalized Declaration is consistent with the original. Nothing can be changed or added when revitalizing the Declaration. If the examining agency approves the submitted Declaration, many properties will be re-encumbered with restrictions- not all properties.
The Board of Directors of S-bag announced on Dec 17, 2014 that it had established the State-mandated Organizing Committee to begin revitalization of expired Covenants.
Editor: This glossary was attorney-reviewed and approved.
Terms: If you read nothing else, read THIS!
MRTA FS712: In 1963, the Florida Legislature enacted the Marketable Record Title Act (MRTA pronounced “marta”), codified as Chapter 712, Florida Statutes. MRTA was intended to simplify title searches by extinguishing old title defects and other recorded issues affecting title to real property after 30 years. The underlying rationale was that “the dead cannot control the living” and that title searches should not have to go back 100 years.
An unanticipated consequence of MRTA was that it extinguished the covenants of some large planned communities, which had taken no action to prevent the covenants from being extinguished and suddenly found they had lost their legal authority to collect assessments and enforce the covenants.
Since then, the Florida Legislature has amended the statutes to provide both a process to preserve the covenants before they are extinguished by MRTA ( i.e. “preservation” ) and a process to reinstate them (i.e. "revitalization"), if they have already been extinguished (also referred to as being “MRTA’ed out”).
ROOT OF TITLE: means any title transaction which creates or transfers the property claimed which is the last title transaction to have been recorded at least 30 years prior to the time when marketability is being determined. This is when the 30-year MRTA clock starts ticking.
In S-bag, most of the roots of title began when S-bag Lake Resorts recorded the deed to the purchaser back in the 70’s and 80’s. MRTA began to expire lots in 2002, one-by-one, on their 30-year anniversary date.
TITLE TRANSACTION: typically a Warranty Deed, a Quitclaim Deed or Personal Representative's Deed (as in probate)
COVENANT: means any agreement or limitation contained in a title transaction recorded in the public records of the county in which a property is located which subjects the parcel to any use restriction which may be enforced by a homeowners’ association or which authorizes a homeowners’ association to impose a charge or assessment against the parcel or the owner of the parcel.
In law, Covenants are considered to be CONTRACTS. Covenants are the most superior of homeowner association documents (see Hierarchy).
There are many terms for Covenant, such as Declaration, Declaration of Covenants, CC& R’s, Covenants, Conditions and Restrictions, C & R’s, Deed Restrictions, Governing Documents, the “Documents”. All these terms mean the same thing. In S-bag, we refer to Covenants as the Redbook even though the Covenants were never published in the Redbook.
PRESERVATION: Extending the duration of Covenants beyond 30 years. FS712 is Very Specific on how to preserve covenants. It is not enough to say the property is encumbered with Covenants or that deed restrictions exist or that there is a homeowners’ association. One must specifically disclose the existence and location of the Declaration of Covenants—by noting the recorded Official Records Book and Page—on the deed. Sometimes, “preservation” is referred to as “renewal” or “revival”.
Preservation is accomplished by either personal deed transaction OR by an HOA recording a Notice of Preservation, which SLohA did in April 2013. It is rare that S-bag owners preserve their own Covenants; sometimes this is done when a knowledgeable attorney handles the real estate transaction. Because so many sales are closed by a title company on a generic Warranty Deed or person-to-person transactions via Quitclaim Deed, most deeds only reference that “…restrictions, IF ANY EXIST, are not reimposed hereby.” Hence, the MRTA requirement to place a specific OR Book/Page reference on the Deed is absent and covenants are not reimposed.
SLohA filed a Notice of Preservation on ALL parcels in S-bag in 2013; however, most lots had already expired and one cannot "preserve" an expired covenant.
EXPIRED (COVENANTS): means the condition of the covenants after the MRTA extinguishes them i.e. “MRTA’ed out”. Another term used is the Covenants have “ceased to govern” and “extinguishment”. Expiration/Extinguishment occurs 30 years from the root of title, unless preserved by a title transaction or the HOA.
REVITALIZATION: means a state-mandated (FS720) full and complete examination of the expired documents to assure that the revitalized Declaration is consistent with the original. Nothing can be changed or added when revitalizing the Declaration. If the examining agency approves the submitted Declaration, many properties will be re-encumbered with restrictions- not all properties.
The Board of Directors of S-bag announced on Dec 17, 2014 that it had established the State-mandated Organizing Committee to begin revitalization of expired Covenants.
Editor: This glossary was attorney-reviewed and approved.