Category Archives: Uncategorized

County’s Homestead Tax Lien: Superior to All Other Liens!

In Florida, priority is typically determined in accordance with § 695.01(1), Fla. Statutes, a “notice” type recording statute, under which a subsequent mortgagee for value and without notice of a prior mortgage prevails against a prior mortgagee.¹ However, there are statutory exceptions which give priority to certain types of liens.²   Florida’s legislature provides such an exception “for all taxes imposed pursuant to the State Constitution” under § 197.122(1), Florida Statutes. In Lansdowne Mortgage, the Third DCA applied this statue to determine  priority between a mortgage executed and recorded in September 2017, and a County tax lien which was subsequently recorded in 2014; and concluded that under § 197.122(1), a County’s homestead tax lien is superior to all other liens, and therefore has priority over the mortgage recorded 3 years before the tax lien.

¹ See Argent Mortg. Co., LLC v. Wachovia Bank N.A., 52 So. 3d 796, 799 (Fla. 5th DCA 2010).

² See Miami-Dade County v. Lansdowne Mortgage, LLC, NO. 3D16-1046 (Fla. 3d DCA 2017).

Covenant Revitalization

IS MY COMMUNITY ELIGIBLE TO REVIVE A DECLARATION OF COVENANTS?

The following requirements must be met in order to be eligible to seek approval from the Department of Economic Opportunity to revive a declaration of covenants:
(1) All parcels that will be governed by the revived declaration must have been governed by a previous declaration that no longer governs some or all of the parcels in the community;
(2) The revived declaration must be approved by a majority of the affected parcel owners in writing or by vote at a meeting of the affected parcel owners; and
(3) The revived declaration may not contain covenants that are more restrictive on the parcel owners than the covenants contained in the previous declaration.

WHAT IS THE ORGANIZING COMMITTEE AND WHAT MUST IT DO?

The organizing committee must consist of at least three parcel owners from the community. The organizing committee must prepare the complete text of the proposed revised declaration of covenants to be submitted for approval. The organizing committee must also prepare the full text of the proposed articles of incorporation and bylaws of the revived homeowners’ association to be submitted to the parcel owners for approval, unless the association is already an existing corporation.

WHAT MUST BE INCLUDED IN THE PROPOSED REVIVED DECLARATION AND OTHER GOVERNING DOCUMENTS?

The proposed revived declaration and other governing documents must provide that the voting interests and proportional assessment obligations of each parcel owner shall be the same as it was under the previous governing documents. It must contain the same amendment provisions as the previous documents. If there were no previous amendment provisions than it must include amendment provisions that require the approval of no less than two-thirds of the affected parcel owners. The proposed revived declaration cannot include any provisions that are more restrictive on the new parcel owners than the covenants of the previous governing documents.

WHO NEEDS TO BE NOTIFIED AND WHAT IS THE NOTIFICATION PROCESS?

A complete copy of the proposed revised covenants, the proposed new or existing articles of incorporation and bylaws of the homeowners’ association, and a graphic depiction of the property that will be governed by the revived declaration must be presented to all of the affected parcel owners either by mail or by hand delivery at least 14 days before the time that the consent of the affected parcel owners is sought.

WHAT APPROVAL IS NECESSARY FOR A REVIVED DECLARATION?

A majority of the affected parcel owners must agree, in writing, to the revived declaration of covenants and governing documents of the homeowners’ association or approve the revived declaration and governing documents by a vote at a meeting of the affected parcel owners noticed and conducted in the manner prescribed by 720.306. Proof of notice of the meeting to all affected owners of the meeting and the minutes of the meeting recording the votes of the property owners must be certified by a court reporter or an attorney licensed to practice in the State of Florida.

WHAT DOES THE ORGANIZING COMMITTEE NEED TO DO AFTER GETTING APPROVAL FROM THE AFFECTED PARCEL OWNERS?

Within 60 days of the date of approval by the affected parcel owners, the organizing committee must submit the proposed revived governing documents and supporting materials to the Department of Economic Opportunity to review and determine whether to approve or disapprove the proposal.

To submit the necessary documents to the Department of Economic Opportunity, the organizing committee should send the necessary documents to the following address:

Department of Economic Opportunity
Attn: Division of Community Development
107 East Madison Street, MSC 160
Tallahassee, Florida 32399-4120

WHAT MUST BE INCLUDED IN THE SUBMISSION TO THE DEPARTMENT?

The submission must include:
(1) The full text of the proposed revived declaration of covenants and articles of incorporation and bylaws of the homeowners’ association.
(2) A verified copy of the previous declaration of covenants and other previous governing documents for the community and any amendments.
(3) The legal description of each affected parcel and a plat or other graphic depiction of the affected properties in the community.
(4) A verified copy of either:
a. The written consents of the requisite number of affected parcel owners approving the revived declaration and other governing documents; OR
b. If the approval was obtained by a vote at a meeting of the affected parcel owners, the notice of the meeting, attendance, and voting results.
(5) An affidavit by a current or former officer of the association or by a member of the organizing committee verifying that the requirements for the revived declaration have been satisfied.
(6) Any other documentation that the organizing committee believes is supportive of the policy of preserving the residential community and operating, managing, and maintaining the infrastructure, aesthetic character, and common areas serving the residential community.

WHEN WILL THE DEPARTMENT OF ECONOMIC OPPORTUNITY MAKE A DETERMINATION?

The department has 60 days from the time it receives the submission to make its determination as to whether the proposed revived declaration of covenants and other governing documents comply with the requirements.

If the department determines that the proposed revived declaration and other governing documents comply with the requirements and have been approved by the affected parcel owners, then the department will provide the organizing committee with written approval.

However, if the department determines that the requirements have not been satisfied, then the department will provide written notice that it does not approve the governing documents. The written notice will also include the department’s reasons for the disapproval.
WHAT DOES THE ORGANIZING COMMITTEE NEED TO DO AFTER GETTING APPROVAL FROM THE DEPARTMENT OF ECONOMIC OPPORTUNITY?

If the articles of incorporation have not previously been filed with the Division of Corporations, the organizing committee has 30 days to file the articles of incorporation with the Division of Corporations.

Instructions for filing Articles of Incorporation can be found at:
http://dos.myflorida.com/sunbiz/start-business/efile/fl-profit-corporation/instructions/

WHEN & HOW ARE THE REVIVED DECLARATION AND OTHER GOVERNING DOCUMENTS RECORDED?

Within 30 days of receiving approval from the Division of Corporations, the President and Secretary of the association must execute the revived declaration and other governing documents in the name of the association and have the documents recorded with the clerk of the circuit court in the county where the affected parcels are located.

WHAT NEED TO BE INCLUDED IN THE RECORDED DOCUMENTS?

The following must be included in the recorded documents:
(1) The full text of the approved declaration of covenants;
(2) The articles of incorporation and bylaws of the Homeowners’ Association; AND
(3) The legal description of each affected parcel of property.

WHEN DO THE REVIVED DECLARATION AND OTHER GOVERNING DOCUMENTS BECOME EFFECTIVE?

The revived declaration and other governing documents are effective upon recordation in the public records. They are effective as to each affective parcel owner, regardless of whether the particular parcel owner approved the revived declaration. The revived declaration shall replace and supersede the previous declaration as to all affected parcels then governed by the previous declaration and will have the same record priority. The revived declaration may not have retroactive effect with respect to any affected parcels that had ceased to be governed by the previous declaration as of the recording date, and shall take priority with respect to the parcel as of the recording date.

Marketable Record Title Act (“MRTA”)

WHAT IS MRTA?

MRTA is a recording act that removes defects and interests in title that is designed to extinguish stale claims and ancient defects against title, enhance marketability of title, and simplify title examination.

DO I MEET THE STANDARDS FOR MRTA?

To meet the standards for MRTA you must identify the root of title. Root of title means any title transaction purporting to create or transfer the estate claimed by any person and which is the last title transaction to have been recorded at least 30 years prior to the time when marketability is being determined. The root of title must also describe the interest to be conveyed.

A title transaction is any recorded instrument or court proceeding which affects title to any estate or interest in land and which describes the land sufficiently to identify its location and boundaries.

WHAT IS THE EFFECTIVE DATE OF A ROOT OF TITLE?

The effective date of the root of title is the date on which it was recorded.

ARE MY RIGHTS AFFECTED BY MRTA?

Generally, under MRTA, a marketable record title is free and clear of all estates, interests, claims or charges the existence of which depends upon any act, title transaction, event or omission that occurred before the effective date of the root of title. All such estates, interests, claims, or charges are declared to be null and void.

However, MRTA specifically provides exceptions for the following rights:
(1) Interests that were disclosed by or inherent in the root of title.
(2) Interests that are preserved by filing notice.
(3) Rights of any person in possession.
(4) Interests that were recorded before the root of title.
(5) Recorded or unrecorded easements or rights that appear in documentary evidence upon which title is based.
(6) Rights of any person in whose name the land is assessed on the county tax rolls.
(7) State title to lands beneath navigable waters acquired by virtue of sovereignty.
(8) An environmental restriction or covenant recorded pursuant to chapter 376 or chapter 403.
(9) Any right, title, or interest held by the Board of Trustees of the Internal Improvement Trust Fund, any water management district created under chapter 373, or the United States.

*Courts have also added several exceptions to MRTA.

PROTECTING COVENANTS AND RESTRICTIONS FROM THE MARKETABLE RECORD TITLE ACT
HOW DO I PRESERVE AN INTEREST IN LAND? HOW CAN A HOMEOWNERS’ ASSOCIATION PRESERVE AND PROTECT A COVENANT OR RESTRICTION FROM EXTINGUISHMENT BY MRTA?

A person claiming an interest in land or a homeowners’ association can preserve a covenant or restriction from extinguishment by filing for record a written notice. This notice must be filed within the 30-year period immediately following the effective date of the root of title. The notice preserves such claim of right or such covenant or restriction or portion of such covenant or restriction for up to 30 years after filing the notice unless the notice is filed again.

DO I NEED TO FILE A NOTICE TO PROTECT MY OWN MARKETABLE RECORD TITLE?

No. It is not necessary for the owner of marketable record title to file a notice to protect his or her marketable record title.

HOW DOES MY DISABILITY AFFECT THIS PROCESS?

A person’s disability or lack of knowledge of any kind may not delay the commencement of or suspend the running of the 30-year period. Such notice may be filed for record by the claimant or by any other person acting on behalf of a claimant who is under a disability, unable to assert a claim on his or her behalf, or one of a class, but whose identity cannot be established or is uncertain at the time of filing such notice of claim for record.

ARE THERE ADDITIONAL REQUIREMENTS FOR A HOMEOWNERS’ ASSOCIATION?

Yes. A homeowners’ association may only file a notice if the preservation of such covenant or restriction or portion of such covenant or restriction is approved by at least two-thirds of the members of the board of directors of an incorporated homeowners’ association at a meeting for which a notice, stating the meeting’s time and place and containing the statement of marketable title action described in 712.06(1)(b), was mailed or hand delivered to members of the homeowners’ association at least 7 days before such meeting. The homeowners’ association is not required to provide additional notice.

WHAT MUST BE INCLUDED IN THE NOTICE?

The notice must contain:
(1) The name or description of the claimant or homeowners’ association desiring to preserve any covenant or restriction;
(2) The name and particular post office address of the person filing the claim or the homeowners’ association; AND
(3) The name and post office address of either:
a. An owner; OR
b. The person in whose name said property is assessed on the last completed tax assessment roll of the county at the time of filing, who is treated as an owner for the purpose of notice.

If a homeowners’ association is filing the notice, then the requirements in section (3) above may be satisfied by attaching to and recording with the notice an affidavit affirming that the board of directors of the homeowners’ association mailed or hand delivered a Statement of Marketable Title Action to the members of that association.

The Statement of Marketable Title Action described above can be found here:
http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0712/Sections/0712.06.html

Homestead Exemption

If you have received notification that your homestead exemption has been revoked and you owe taxes for prior years, we may be able to help you.  In Florida, you may only claim the homestead protection on one property.  Special exceptions may exist if you are married, but the general rule is that you can only claim one homestead.

Therefore, if you are a seasonal resident and have a second home, your homestead could be jeopardized if you are receiving another homestead exemption in another state.  Florida may revoke your homestead retroactively even if you are receiving that homestead exemption unknowingly in another state.

We recently discovered that our Florida residents who also maintain a home in Ohio were unaware that Ohio was providing them with a homestead exemption.  This caused the Florida resident to lose their homestead and created a large tax liability for the Florida homeowner.  We understand that Pinellas County itself has approximately 100 cases namely dealing with Ohio residents.  We have assisted our clients in reversing the denial of the homestead exemption in Florida thereby saving them thousands of dollars in taxes.

Contact us for a FREE consultation regarding the granting or denial of homestead protection in Florida.  We are here to assist you.