Planned communities lose right to enforce rules as deed restrictions expire

Article Courtesy of the Sun-Sentinel
By Kevin Smith 
Posted May 12, 2003 

In hundreds of communities in South Florida and thousands statewide, deed restrictions serve many purposes, among them to keep the grass from getting too high and the property values from getting too low.

But most homeowners in those communities don't know about a looming problem that's bigger than keeping kids out of senior enclaves and trucks off side lawns.

Deed restrictions on private houses are living on borrowed time, having been limited to a 30-year life span by a 40-year-old state law. When the 30 years end, legal problems can begin.

The legal problems have already been felt in one Broward County community.

The Woodlands, a well-kept, 890-home development in Tamarac, discovered about 18 months ago that its deed restrictions had lapsed. The expiration of the restrictions left the homeowners association powerless to collect dues and enforce community standards.

"We wondered what in the world to do," said Woodlands Homeowners Association president Larry Torn, whose association maintains several clubhouses and pays for additional security.

The association tried to revive the community standards by installing a controversial new taxing district through the state Legislature. The effort died in the Senate this month.

"The Woodlands is a classic case of what can happen if these covenants expire without anyone noticing," said Fort Lauderdale attorney Gary Poliakoff, an expert in homeowner association law.

When people buy houses in many planned neighborhoods they agree to rules and restrictions through the deeds that dictate home size, association membership, the age of residents, the presence of pets and even the color of the homes.

Poliakoff estimated at least half, and probably more, of Broward's planned development in the past decade could be affected by this issue.

In Palm Beach County, Joel Messinger called it a "well-kept secret." As president of a property management group in Boca Raton overseeing more than 100 communities in the region, he predicted the issue could "harshly affect" thousands of county homeowners.

The issue was created by the Marketable Record Title Act, a 1963 law intended to make things easier for title examiners, whose research on properties sometimes extended into the 1800s. By invalidating land restrictions older than 30 years, the law cut down on the research.

But the solution of the past is the problem of the present and future, especially when the rules being eliminated are so widely used throughout the state.

If the problem is addressed before the 30-year mark passes, the restrictions can be extended easily.

A 1997 law allowed a majority vote of homeowners to continue the restrictions. A new law awaiting the governor's signature would allow restrictions to be refreshed with just a two-thirds vote of a homeowners association board of directors. "It's where the 30 years have already run that it becomes complicated," said Dan Lobeck Sr., a Sarasota attorney specializing in association law.

It gets complicated for a simple reason: after the restrictions expire, homeowners can't be compelled to accept new restrictions, which would bring financial obligations and maintenance standards. Torn said no Woodlands homeowners have declined to make their monthly payments, but future residents may feel otherwise.

"I am concerned in the long range," he said. "As new residents move in, the most obvious question is, will they or will they not abide by the community restrictions."

Torn said he's received phone calls from other local associations hoping to avoid the Woodlands fate.

Rick Coffin, a board member of the Woodfield Country Club Homeowners Association in Boca Raton, said he had not heard of the problem and would start looking at his community's deeds immediately.

In Broward, the issue could be felt the most dramatically in the west, where many developments took root in the late 1960s.

Many associations were unaware "until it broke over in the Woodlands," said Dot Murphy, president of the 35-association Tamarac Presidents Council. "No one had been aware of it. No attorney had warned us, no officials called their constituents."