Does your homeowners' association own its community common areas, such as community centers/club houses, private roads, lakes, parks, recreation areas, open spaces, etc.?
Each homeowners' association should determine whether, as part of the developer "turn-over" of control of the homeowners' association to the community or sometime thereafter, the developer properly deeded the community common areas to the homeowners' association. Most homeowners' associations do not have an Owner's Title Insurance Policy insuring ownership of community common areas. Some homeowners' associations improperly assume that a recorded plat dedication by the developer of the community common areas to the homeowners' association (without language confirming that fee simple title was conveyed) gives homeowners' association ownership of and marketable title to their community common areas.
The revised Florida Uniform Title Standards approved by the Florida Bar Board of Governors on January 15, 2009, confirms that dedication of community common areas in a plat to a private entity, such as a homeowners' association, does not convey fee simple title unless the plat dedication clearly states that it is a fee simple conveyance of the community common area. Plat dedication language is rarely drafted to convey fee simple title and generally creates easement rights in favor of a homeowners' association. The Florida Uniform Title Standards reflects interpretations of existing laws and practices and are approved by the Real Property, Probate and Trust Law Section and the Board of Governors, both of The Florida Bar.
These Uniform Title Standards can be described as a voluntary agreement made in advance by members of The Florida Bar on the manner of treating a particular title problem when and if it arises.
A homeowners' association that does not own marketable, fee simple title to its community common areas may discover this particular title problem when for example attempting to:
- obtain financing for improvements to community common areas,
- grant easements or other interests over community common areas,
- sell or exchange community common areas.
If a title defect currently exists, it should be resolved immediately to prevent future difficulties and expenses, including possible lawsuits.
Please contact one of our Community Association Law attorneys to learn more about this recent and significant revision to the Florida Uniform Title Standards and how this revision may impact the marketability of your homeowners' association's ownership interest in community common areas.