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There are many reasons why governing documents of a community association should be reviewed and amended on a periodic basis.  Associations should amend their governing documents to:  eliminate obsolete provisions; eliminate provisions no longer observed or enforced; eliminate provisions that conflict with current laws; eliminate developer language and privileges no longer being used; improve poorly drafted documents by clarifying ambiguous provisions; tailor documents to fit the living experience of owners/members; grant the association the necessary powers to operate effectively; provide for changes in technology; make documents more “user friendly” – through better organization, a table of contents and descriptive headings, etc.; eliminate or correct mistakes and errors; and to take advantage of recent changes of the law.   Some amendments may be required as in the case of illegal or unenforceable provisions while other amendments may be advisable as in the case of ambiguous or confusing provisions.  In some instances, governing documents should be amended simply because they are costing the association money.  The following are examples of reasons why governing documents should be amended because they are costing your association money:

1. Assessment Collection: Association documents should be reviewed to determine whether or not the association has the ability to accelerate assessments for the balance of the year if an owner is delinquent on any payment. The documents should also be reviewed to determine the penalty for unpaid assessments. Interest on delinquent assessments should be changed to provide that delinquent payments bear interest from the date due until paid “at the highest rate allowed by law.” Also, late fees, currently set by law at a rate not to exceed the greater of $25.00 or 5% of each late installment, may be assessed but only if the governing documents provide for such fees.  Finally, the safe harbor under the homeowners’ association statute became effective July 1, 2008. If the HOA declaration contains a subordination of lien to mortgage clause which eliminates any liability of first mortgagees for pre-title assessments, and the mortgage predates enactment of the safe harbor clause of Fla. Stat. §720.3085(2)(c), then the HOA declaration controls as the mortgagees’ pre-title liability.  The association’s governing documents could be amended (with certain restrictions) to require the mortgagee to pay the amounts provided for in the statute (currently, 12 months or 1%).
2. Fining: Previously, the statutes only allowed the ability to fine if the association’s governing documents permitted the imposition of a fine. This is no longer the case. All associations may now fine even if it does not allow so in the governing documents. The procedure for fining is mandated by Florida Statutes.  The amount of fine is limited by Florida law to an amount not to exceed $100 per day and up to $1,000 for a continuing violation. In the case of homeowner’s association, the law changed on July 1, 2015 to allow a homeowner’s association to impose a fine that is greater than $100 per violation if the governing documents provide for the higher fine.  The governing documents should be amended to make the fines consistent with the statutory requirement since certain governing documents may provide a lower fine amount.  Additionally, because in condominiums, a fine cannot become a lien on the unit and because in homeowner associations, a fine less than $1,000 cannot become a lien on a parcel, the governing documents should be amended to allow associations to seek a money judgment in small claims court for the amount of the fine, including prevailing party attorneys’ fees, in the event an owner fails to pay the fine.
3. Electronic Transmission of Notices: Many association documents were written when e-mails were not the standard mode of communication such that notices were required to be hand delivered or mailed.  Florida law now allows association notices, including annual meeting notices, to be electronically transmitted.   However, if the bylaws of an association requires the annual meeting notices to be mailed or hand delivered only, the association must mail or hand deliver the annual meeting notices even if Florida law allows a more cost effective and expedient means of communication. Therefore, the association documents should be amended to allow notices to be electronically transmitted unless required otherwise by law or by the unit/parcel owner.
4. Marketable Record Title Act: In 1963, the Florida Legislature enacted the Marketable Record Title Act (“MRTA”) which was intended to simplify title searches by extinguishing old title defects and other recorded issues affecting title to real property after 30 years, except for certain matters.  An unanticipated consequence of MRTA was that it extinguished covenants and restrictions of some planned communities like homeowner associations.  Suddenly, homeowner associations found that they had lost their legal authority to collect assessments and enforce the covenants if their covenants and restrictions were more than 30 years old.  Since 1963, the Florida Legislature has amended the law to provide a process to preserve the covenants before they are extinguished by MRTA and a process to reinstate them if they have already been extinguished or have expired.
5. Mortgagee Approval: Many association documents not only require a certain percentage of the members to approve an amendment but also require the amendment to be approved by every mortgagee holding an institutional mortgage.  Associations with such onerous requirements often incur great expense in their effort to obtain the necessary mortgagee approvals or else abandon their plan to amend the documents altogether.  Fortunately, the legislature has adopted certain laws which allow many amendments to be adopted without mortgagee approval, and in cases where mortgagee consent is required, the association is now in a better position to obtain that consent.

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