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04-29-2013, 09:51 AM | #1 |
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Private road maintenance agreements
Our home is one of about a dozen that shares a private road in Moultonborough. We are plowed by the town but are responsible for the cost of all maintenance - trees, grading the road, etc.
We have never had a formal agreement in place. Instead we have met as a group, figured out what we had in the bank, estimated the maintenance and then set an amount we all pay equally. It has come to my attention that recently our neighbor was given a hard time by a lender when they went to refinance because there was no official agreement in place which seems to be something that will continue going forward due to either tigher scrutiny or regulations. I'm taking on the task of getting this agreement in place. Does anyone have a similar small group of houses that has done something similar? I'd love to either be pointed in the right direction to get this written up or quite honestly I'd be happy to take the wording you currently have in place if anyone is OK with that. |
04-29-2013, 11:26 AM | #2 |
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Gee, does that bank really imagine that a dozen property owners would somehow let their road become impassable, especially if it's waterfront property involved? Have they gone "regulation nuts?" Maybe your neighbor should tell the bank that they should be realistic if they want the continued business. There are other banks. Maybe the bank official is from away, and has no understanding of how rural life works. Jerk his chain a bit.
Our road is shared by several dozen property owners, and there is no document in place for road maintenance. One of the owners collects the money and arranges for maintenance each year. No problems at all, really. |
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04-29-2013, 11:52 AM | #3 |
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check other banks
Our road in Moultonborough works the same as DickR described. One guy collects the money from each of us and several in the neighborhood take care of maintenance. There would be resistance if someone wanted a formal agreement just to satisfy a bank. Sounds like it is time to look for another bank.
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04-29-2013, 12:02 PM | #4 | |
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04-29-2013, 12:04 PM | #5 |
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There are many private groups/associations around that have formal documents in place. They are not necessary but some people feel they help avoid liability concerns. Be warned though that these formalized arrangements can get complicated and take you down paths you don't want to travel.
As previously mentioned, it is often easier to use a local bank that uses common sense and understands local practices. Banks get nervous because they are afraid that non-payment of an association fee can be liened and interfere with their mortage position. Some lenders are too inflexible and don't want to understand how private roads are maintained. |
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04-29-2013, 12:12 PM | #6 | |
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Sub-Standard Housing Again?
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An alternative would be for the neighborhood to buy a thin strip of your neighbor's property that abuts the subject road. That action would remove him from his responsibility of maintaining the road, plus he can't be legally blocked from using his driveway. Although he would no longer be legally obligated to share in the maintenance of the roadway, he could continue negotiations with the bank. |
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04-29-2013, 12:36 PM | #7 |
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Don't private roads have to meet certain dimensional requirements before the town would plow them. Also I would think it would depend on how many houses share the private road.
I guess there could be an ordinance that would change that somewhat. Maybe the Town of Moultonborough could help you with explaining to the bank that you meet certain requirements that allows the town to plow your road. Just a thought.
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04-29-2013, 01:21 PM | #8 |
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Private roads must be trimmed and in good enough shape for emergency vehicles to get by. There are no dimensional restrictions or requirements on existing roads for obvious reasons.
Please reread my first post. The mortgage company/bank is only interested in their security position. They don't care about any town requirements. The idea of a town ordinance to change requirements would cause a huge mess and is not necessary. There is already a policy in place. Last edited by Sue Doe-Nym; 04-29-2013 at 01:28 PM. Reason: spelling plus additional comments |
04-29-2013, 03:33 PM | #9 |
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we have about 25 homes so have a formal set of by laws with a small board of three but very difficult to get people to take part. regarding road issues the new highway head Scott has been concerned with plows losing mirrors etc due to branches too close to the road so have been asking ( not sure requiring but he contacted us to tell us his issues) to improve so we had a guy come in to trim all trees/ branches/ schrubs which makes road safer( we can actually see around corners now) also and looks better. Downside with association is it is a organization that must file. Center Harbor has talked about not plowing private roads but so far no news like this in Moultonboro. And yes when anyone either re finances or buys their bank reviews and requires a lot of info.
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04-29-2013, 03:42 PM | #10 | |
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I looked it up for Moultonborough and this what it says about plowing private roads: "New private subdivision roads with more than three (3) lots will be provided snow removal and sanding services as provided in the Town Budget. The road must meet minimum specifications as outlined in the Moultonborough Subdivision Regulations. The Board of Selectmen will accept an application for this service provided at least one (1) habitable structure has been completed and is serviced by the road in question. This is the what the "statement of Policy says: RECOMMENDED MINIMUMS FOR PRIVATE ROADS After inspecting private roads and upon input from the Fire Department, Road Agent and Police Department regarding of the need to accommodate emergency and other vehicles, it is recommended owners of private roads consider the following minimums for private roads to insure use by emergency and highway vehicles and equipment in a safe and expedient manner: 1. Width of traveled way: sixteen (16) feet, minimum; 2. Road shoulders: five (5) feet, minimum; 3. Minimum overhead clearance (branches, limbs, wires): thirteen feet, six inches (13’ 6”); 4. Provide turnaround area at dead end roads to accommodate vehicle that is thirtyfive (35) feet in length, or greater; 5. Grade roads to eliminate crown over six (6) inches; 6. Provide street name signs to direct emergency vehicles; 7. Provide adequate culverts where required (culverts at least twelve inch in diameter, minimum); culverts kept clear of obstructions; 8. Check all grades and changes in grades to insure that a thirty-five (35) foot long or greater vehicle can safely negotiate the roadway; and, 9. Check all sharp turns, curves and blind areas to insure a thirty-five (35) foot long or greater vehicle can safely negotiate the roadway. It is our strong recommendation that these minimums be established and maintained because personnel and equipment safety, as well as emergency response times, are significantly impacted by road conditions. Additional guidance is available by consulting NFPA1, Uniform Fire Code, Chapter 18, which standard we incorporate in this policy by reference. http://www.moultonborough.org/Pages/...ivateroads.pdf http://www.moultonborough.org/Pages/...ommendmins.pdf
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04-29-2013, 05:36 PM | #11 | |
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"The owners of the five lots shall contribute one-fifth (1/5) of all costs of maintenance and repair of the Road as shown on the Plan. It is further agreed that before any major alterations or improvements are undertaken with respect to the Road, the majority of the owners of the five lots must give prior written consent. Major alterations or improvements are defined to mean any expense over and above the cost of maintaining the Road in a condition which permits reasonable ingress and egress to and from said lots for residential purposes. This agreement shall run with each of the above described lots and shall be binding on the successors and assigns of the parties hereto." |
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04-29-2013, 06:29 PM | #12 | |
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04-29-2013, 07:02 PM | #13 |
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I permanently live on such a road, deed mentions neighbors have to contribute to common maintenance, but nothing is formal. One neighbor collects and arranges. There where a couple of years, when my minimal income went to pay the mortgage and feed the family and no one kicked up a fuss, I make up for that now.
Anyway, I went for a new mortgage a few months ago, and it was never brought up. I think a lot depends on the bank, their legal department, the appraiser (a LOT depends on what they push on) and how innocent you look |
04-30-2013, 04:18 AM | #14 |
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Makes sense.
I drive around parts of the lake all winter and see many homes that are left unplowed because they do not get used at all during the off season. I've often wondered if that would become a problem if something happens and emergency vehicles cannot get any closer then the road. Some of these homes are set pretty far back off the roads.
Could the insurance company refuse payment for the homeowner not keeping the area open in case of a fire? From an emergency access prospective it makes total sense for the bank to want to have proof that the road will be passable to all forms of emergency vehicles.
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04-30-2013, 07:28 AM | #15 |
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Fannie Mae is the Problem
Back in this thread the original poster mentions that the home buyer is trying to get a Fannie Mae approved loan. That is the beginning and the end of the problem.
1st why is the buyer working on Fannie Mae approved loan to begin with... With Fannie Mae involved, many aspects will be examined and really what they are doing is trying to make sure that the property also meets HUD approval, and various other governmental guidelines....Which insures saleability.... Going the route of a private bank loan, especially a local private bank loan is the way to go in these instances. As local banks understand the area. The down side to this is that they usually require a larger down payment... Anytime you work with a non-local bank, you run the risk of them wanting to make sure the load meets the criteria for Fannie Mae or Freddy Mac, so that the loan can be bought and sold with out issues.
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04-30-2013, 07:34 AM | #16 | |
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Hence why there are so many places where the road maintenance is done unofficially. That is Unless the person responsible for developing the area and subdividing it had the forethought for the association. As other have said I think the person trying to get a loan needs to look at working with another bank...... Island properties face the same types of Challenges when people go for loans.
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04-30-2013, 08:12 AM | #17 | |
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How would an agreement work? Would you have everyone sign it and it would be a binding contract? Who would be the body that oversees this contract being enforced? (Do you live on my road....lol...?) Good luck with that task. Please keep us apprised of your progress. I'm guessing that those of us in similar situations would appreciate that. (And, fwiw, we recently obtained a mortgage with a local bank, and I can't recall that issue being mentioned.)
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04-30-2013, 08:41 AM | #18 |
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04-30-2013, 02:22 PM | #19 |
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a simple agreement might be a good thing for all
Went through a very painful experience with CitiBank re "private road maintenance agreement." There are 7 houses on our dirt road, and our next door neighbor just asks each property ower to cough up around $100 every few years to cover grading. A couple of years ago, CitiBank was prepared to reject our rather substantial refi because there was no PRMA in place. I couldn't believe it...they were prepared to reject a good-sized piece of business for the sake of an expenditure that amounted to such a paltry sum!
I spoke to three different lawyers around the Lake, and they had only a vague familiarity with the idea of a PRMA, except in the case of an actual association. One of them said that, apart from that, he had only drafted a single one in his 30 years in the business. But in any case, here's what I had to do to get the OK from this bank. First, I had Scott in the highway department send me an official-looking letter stating that the town does indeed plow the road in the winter. Was that enough for CitiBank? Nope. Next, I got my very nice next-door neighbor to write a letter stating that he served as "road agent," for our little lane, and describing the approximate cost of re-grading and the process he went through to get everyone to contribute their share (he just asked, and everyone always paid up). Did that satisfy CitiBank? No, it did not. Finally, I asked the town planner (forgotten his name...think he's gone now) to send me another official-looking letter stating that neither the Town of Moultonboro nor the State of NH required such a thing as a "private road maintenance agreement." That finally got us the green light from CitiBank. Gaaaah! For this and many other reasons, dealing with CitiBank was a nightmare...I would never use them again. If, as an earlier post suggested, this kind of hassle can be avoided by putting together a simple document of a few paragraphs, it might benefit everyone on the street who might want to sell or refinance their property in the future. |
04-30-2013, 02:52 PM | #20 | |
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For some of the other responders, I recognize and appreciate the "use a local bank" answer but that really doesn't work here since it's not really my choice. I can't mandate who a neighbor uses to refinance and if someone is looking to sell and they get a deal screwed up by a lack of an agreement it's just a giant annoyance. |
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04-30-2013, 06:05 PM | #21 | |
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05-01-2013, 09:25 AM | #22 | |
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05-01-2013, 10:00 AM | #23 |
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I don't think he ever said that he was "responsible" for doing this. Maybe neckdweller is a nice person and wants to do something to help his neighbors, both the one who is trying to refinance now and all the others who might face this issue in the future. I say, kudos to him.
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05-01-2013, 10:43 AM | #24 | |
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It's not necessarily my responsibility but I am the de facto president of our little road (it was an everyone else except me took one step backward when they asked for someone to step forward type of deals). My motive, in keeping with my prestigious title , is to have this not be an issue for anyone going forward. |
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05-01-2013, 11:07 AM | #25 | |
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05-06-2013, 02:58 PM | #26 |
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honestly as a lender i don;t want to ask for this info but we have to to sell the loan. sure your mom and pop banks never cared but they also are higher in rate for a portfolio loan than a loan that can go secondary market. When these situations come up it's a good time for the association to just put something in place as a property with all financing options open is easier to sell. Some investors with a legal easement and comments from the appraiser will let it go but for just a little cost it can be done pretty easily and it's not anything long and drawn out.
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