Private road maintenance agreements are a contract between real estate property owners.
WHAT IS A PRIVATE ROAD?
Private roads are roads owned and maintained by a private individual, organization, or company rather than by a government entity. For instance, private roads might be maintained by a homeowner’s association (HOA), golf community, condo community, private road maintenance association.
PRIVATE ROAD MAINTENANCE AGREEMENT EXPLAINED
If roads are not publicly maintained, it is the responsibility of the landowner(s) to maintain the roads, and roads that have not been brought up to county standards and accepted for maintenance are not the responsibility of the county. Unlike highways, which are maintained by the general public, private roads are maintained at the expense of individuals who have requested them.
The agreement will be recorded with the Arizona county in which the road is located. Legally binding responsibilities for the parties; who are responsible for the agreement.
road maintenance defined in the agreement
Who is responsible for snow plowing? How often should the road be sealed?
ARE PRIVATE ROAD MAINTENANCE AGREEMENTS REQUIRED BY LAW?
In Arizona, private road maintenance agreements are not required.
However, they are often a requirement of the lender!
ROAD MAINTENANCE AGREEMENTs MUST CONTAIN
The names of the properties involved in the agreement, the specific things that are to be done, things that cannot be done. Costs that are covered, costs that are not covered. Monthly maintenance dues, etc.
Repair and maintenance, including snow removal. The agreement is concluded between the owner of the lot, the buyer of the contract and all other parties, when this is relevant to the subject matter of the contract.
The question that most buyers of property on a private road ask themselves is whether they need a road maintenance contract to get a mortgage. The answer to this question depends on several factors.
DEFINES WHICH PARTIES ARE RESPONSIBLE FOR WHAT
Cost-sharing typically is split evenly among the landowners, although that isn’t always the case. In some neighborhoods, for example, the owner who lives farthest down the road or who has the largest lot, pays the most.
Why are private road maintenance contracts desirable? There are good reasons for an RMA, and it manifests itself in many forms.
Reasonable access to the property must be available at all times. If the road is not maintained, it may become impassable. Lack of access can affect the value of the home.
In practice, a private road maintenance contract is drawn up and signed before the start of road development. In some cases, individual owners can draft and sign the contract if or after buying a property on the street. It is, of course, a simplified breakdown of what needs to be done, but all the elements are there.
However, if access to your property is via a private road and there is no road maintenance contract. If you want to live on a private road, you usually have to negotiate and sign a private road maintenance contract.
If could become a life-threatening issue if first responders are not able to reach a property or if homeowners are not able to leave. What about a forest fire and residents cannot evacuate.
So, the responsibilities that have agreed to become the responsibilities of all future owners. For this reason, these items are displayed in a preliminary title report, and sellers must indicate whether or not an agreement exists through laws such as A.R.S. § 33-422.
When you buy a property with an existing private road maintenance contract it is to be disclosed by law.
Private road maintenance contracts grant vehicles and pedestrians access to the road. This means that owners, their residents, guests, agents and emergency vehicles can use the private road. To understand private road maintenance contracts and similar legal documents, you need to understand what private roads are.
Most roads are owned by the government, but a private road is owned by an individual or private organizations, such as ___________________. To whom and to what do road maintenance contracts apply? In short, a road maintenance contract applies to a private road.
So, what exactly is a private road? Private roads are often used when people live far from a town or city and have to travel across private land. A private road is often laid out because a person needs access to the land; Such a road can pass through another person`s property.
The road(s) are/will be publicly maintained, privately maintained, not maintained, not applicable. If necessary, there is/is not . . . a registered road maintenance contract. In the agreement, plot owners or associations responsible for road maintenance.
PRIVATE ROAD ASSOCIATIONS
Road associations can organize themselves in various ways. Although some are based on verbal agreements, it is recommended to have a written agreement that is notarized and filed with the County Recorder so that it is legally binding on the people who signed it and on future owners. It is important to have an agreement that allows for the establishment of privileges for the collection of taxes.
In some cases, a private street association take the form of an association of owners or a not-for-profit corporation.
However, this does not mean that all lenders will follow. And it certainly doesn’t hurt to have an agreement that handles maintenance issues.
Unless all owners are required to sign under local laws, it is possible that a road maintenance contract will be signed by less than all adjacent owners and may be binding only on those who have signed. We suggest you call the local supervisory board or land use department to inquire about the details, as regulations vary from region to region.
Take a look at some of the most common mortgage lenders and their requirements for a private road maintenance contract: An easement is a legal right to use and build a shared private road on it. For example, a municipality cannot regulate an easement on a private road unless the owners` association allows it. No waiver or waiver of seller`s liability resulting from an omission or misrepresentation in an affidavit of disclosure is valid or binding on buyer.
WHAT IS A PRIVATE ROAD MAINTENANCE AGREEMENT?
A private road maintenance contract is a contract that determines who is responsible for the maintenance of a private road and how the road is maintained. In order to lend on a property located on a private road, mortgage companies and banks require a copy of the recorded road maintenance agreement. The road maintenance agreement details how and by whom the private roads of a community will be maintained.
WHEN ARE PRIVATE ROAD MAINTENANCE AGREEMENTS NOT NEEDED?
The agreement is not needed if the road is owned by a public entity. For example, a road might be owned by a city, county, state or the Federal government. In those instances, an agreement is not required by the city is responsible for maintaining the road.
Road maintenance agreements are often a requirement of the lender
PRIVATE ROAD MAINTENANCE AGREEMENT: FHA LOANS
The FHA loan program does not require a private road maintenance agreement in instances where there is a permanent recorded easement, or if an HOA owns and maintains the road.
“The Mortgagee must confirm that the property is provided with a safe pedestrian access and adequate vehicular access from a public or private street. Streets must either be dedicated to public use and maintenance or retained as private streets protected by permanent recorded easements. Private streets, including shared driveways, must be protected by permanent recorded easements, ownership interest, or be owned and maintained by an HOA. Shared driveways do not require a joint maintenance agreement.”
HUD Handbook 4000.1
PRIVATE ROAD MAINTENANCE AGREEMENT: VA LOANS
The Veteran’s Administration is more strict on private streets than FHA. The VA Handbook Chapter 12 states,
“Private streets must be protected by a permanent easement AND maintained by a homeowners association or joint maintenance agreement.”
VA Handbook Chapter 12
Additionally, VA requires that the street have an all-weather surface. VA underwriters must verify these items in the VA Notice of Value (NOV), which is the review of a VA appraisal. VA underwriters must verify a provision exists for continued maintenance of the private road
PRIVATE ROAD MAINTENANCE AGREEMENT: FANNIE MAE LOANS
Conventional Fannie Mae loans require that properties on a private street have an “adequate, legally enforceable agreement or covenant for maintenance of the street.” Fannie further states the following should be included in the recorded document:
- Responsibility for payment of repairs, including each property’s share
- Default remedies when property owners do not meet the obligations
- The effective term of the agreement (mostly perpetual and binds future owners).
Exception: Fannie states:
“If the property is located within a state that has statutory provisions that define the responsibilities of property owners for the maintenance and repair of a private street, no separate agreement or covenant is required.”
Fannie’s Exception to the Rule
If you need help with your private road maintenance agreement then, contact the Dunaway Law Group at 480-702-1608 or message us HERE.
* The information provided is informational only, does not constitute legal advice, and will not create an attorney-client or attorney-prospective client relationship. Additionally, the Dunaway Law Group, PLC limits its practice to the State of Arizona.
