By: Clark, Campbell, Lancaster & Munson, P.A.

Q: Is it important for homeowners associations to consistently enforce restrictive covenants and association bylaws and rules, especially when such covenants or rules are no longer desirable?

A: Homeowners associations and other “deed restricted” developments are communities with restrictive covenants and rules regarding use of property within the community. Generally, within these communities, an association is created with authority to enforce these restrictive covenants. If you live in a deed restricted community, and you would like to build a fence around your house, but the restrictive covenants prohibit construction of a fence, then even though it is your property, you cannot, excluding certain exceptions, construct a fence.

However, what happens if the association fails or selectively enforces its rules? The association consists of the property owners within the community, and its board consists of elected owners. Generally, these individuals are not attorneys with expansive knowledge of Florida law, or even their own declaration of covenants. Further, as time goes on, communities change, and restrictive covenants or rules that were desirable when the community was formed are no longer wanted or needed. As such, a community’s restrictive covenants, whether intentionally or otherwise, are oftentimes not enforced, or if they are, only sporadically and selectively.

While it may be tempting to ignore certain restrictive covenants, or provide exceptions to the same, associations should resist such actions. If an association fails to enforce a restrictive covenant, or if it enforces it only against certain owners, such restrictive covenant may become unenforceable. Therefore, if an association permits one property owner to build a cosmetically appealing fence in violation of the restrictive covenants, it may be prohibited from preventing another homeowner from constructing a fence that is much less appealing.

If there are certain restrictive covenants or rules that the association and its property owners no longer want to enforce, or at the very least want to lessen such rule’s restrictions, the better avenue, as opposed to simply ignoring these rules, is to amend the community’s covenants to reflect the desires of its owners. This will allow the association to continue to enforce its rules, while amending the rules to better conform to expectations and desires of property owners. Therefore, if a community desires to allow fences, but wants to limit types and dimensions of such fences, the association should amend its restrictive covenants to allow fences, and specifically provide for the types and dimensions of fences that are permitted.

The December 31st edition of “The Law” will discuss federal tax liens and their effect on the sale of real estate.

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: Are tenants protected at foreclosure?

A: Yes, but right now only limitedly by a recent state law. Previously, the federal Protecting Tenants at Foreclosure Act prevented most banks or buyers obtaining a property through foreclosure from evicting rent-paying tenants without providing 90 days’ notice. And unless the buyer intended to occupy the home, he would have to respect the lease. That law expired at the end of 2014, and for the first five months of this year, Florida (like about half the states) had virtually no protection for tenants at foreclosure.

As of June 2, 2015, Florida enacted a law that requires merely 30 days’ notice to so-called “bona fide tenants” before removal after a foreclosure, regardless of the lease and regardless of whether the foreclosure buyer intends to occupy the property. A bona fide tenant, under both the expired federal law and the current Florida law, is better known as an “arms’ length tenant”, because he cannot be the prior homeowner’s child, spouse or parent and he needs to be paying at or near market value rent. Even though the new owner need not respect the lease, he must respect other tenant rights, such as the prohibition against the landlord locking out the tenant, turning off water or removing doors. Once the 30 days expires, a mere affidavit in the foreclosure action can be enough to get the tenant removed.

In short, Florida has created a 30-day notice requirement for tenants who are truly at arms’ length with their landlords and were occupying the premises before the foreclosure buyer obtained title. This is far short of the intended protections of the expired federal Act and puts us short of the protections of approximately a dozen other states. However, notably, the protections under Florida law appear to apply to other lien foreclosures in addition to just the traditional “federally related mortgage loan” covered by the federal Act.

 Although the more protective federal Act has expired, house and senate bills have been proposed this year to reenact the law.

The October 22nd edition of “The Law” will cover selecting the right attorney and title company services when dealing with real estate that is subject to a last will and testament.

Questions can be submitted online to thelaw@clarkcampbell-law.com

By: Clark, Campbell, Lancaster & Munson, P.A.

Q: When closing on my home, I do not want to feel forced to sign documents without time to review and ask questions. Are there consumer protections for these transactions?

A: One measure is the new “Integrated Disclosure Rule”, which provides time for the borrower to review new Loan Estimate and Closing Disclosure forms. The Rule goes into effect for loan applications received by a lender on or after August 1.

The Loan Estimate will replace the current Good Faith Estimate (GFE) and initial Truth-in-Lending Disclosure (TIL), which are received by the borrower early in a real estate deal.  The Loan Estimate will be sent to the borrower within 3 business days of the loan application and, unless waived by the borrower, at least 7 business days before the borrower becomes contractually obligated to the lender (typically at closing).

The Closing Disclosure will replace the final TIL and Settlement Statement (HUD-1 or HUD-1A), which are often received by the borrower the day of closing and detail loan and closing costs, loan terms, title insurance coverage, and the balance due.  The Closing Disclosure must be received by the borrower at least 3 business days before closing.

These changes protect borrowers from pressure of reviewing a Settlement Statement at the last minute, without much opportunity to question differences between original estimates and final closing documents.

The Rule applies to most “closed-end” consumer real estate, construction-only, vacant land, and 25 acre (or more) mortgage loans.  It also applies to credit extended to certain trusts for tax or estate planning purposes.  Cash deals without a lender, “open-end” loans like home equity lines of credits (HELOCs), reverse mortgages, mobile home and unattached dwelling mortgages, and lenders making fewer than 5 mortgages a year are excluded.  Low-income housing assistance programs may be partially exempt.

An attorney is a wise decision in any real estate transaction to help you navigate through the purchase of your new home and to ensure your interests are protected.

The July 2nd edition of “The Law” will discuss the importance of distinctions between independent contractors and employees.