Private Road Maintenance Agreement

A private road maintenance agreement is essential to banks and mortgage companies who require a copy of a recorded contract to lend a property on private road, but this varies depending on the lender and the specific property. The legal document specifies who will maintain the particular road or manage its finances. The road maintenance agreements vary by jurisdiction. It is advisable to consult with legal attorneys before signing the document. Private roads are the ones the state or the government does not maintain. They are looked after by homeowners, property owners, organizations, or another separate entity.

What Is a Private Road Maintenance Agreement?

A private road maintenance agreement plays a significant role in ensuring the maintenance of private roads by assigning tasks to their respective owners. The legal contract and its associated proceedings enable the repair and improvement of all private roads on time. Most mortgage companies require a homeowner seeking to buy a property using a private road to have a legal document in place. The document details how the private road belonging to a community is maintained and the individuals responsible for maintaining it.

The agreement consists of two parts. The first part is an agreement detail about what work needs to be done, how long it will take, and who will take the responsibility. The second part comprises the payment stipulations from a homeowner or an association for repair work and maintenance. However, there are local or state regulations in place regarding the development and maintenance of private roads. Each private road maintenance agreement is unique and varies depending on specific requirements.

What Are the Factors to Consider for the Private Road Maintenance Agreement?

Individuals and organizations must consider several factors when forming a private road maintenance agreement. Here is a list of the considerations to note during the process:

• Requirements of the Mortgage Company The first thing to consider is the expectations and requirements of the mortgage company. The concerned individuals must analyze the terms of the agreement and check what the company is asking for concerning road maintenance. They will have to qualify according to the terms to finalize the road maintenance deal with the company.
• Budget Requirement Another consideration during a private road maintenance agreement is the budget. Every homeowner needs to know how much money can be spent to maintain the road every year. The person must have a sufficient budget to bear the costs of repair and reconstruction of the private road as and when required.
• Agreement Type The homeowner must check whether the agreement is an open-ended one or a legal contract with a fixed date or end tenure. Open-ended agreements are flexible but require more maintenance throughout the contract duration. So, it is up to the homeowner and the respective company to decide which agreement type suits their requirements.

What Should I Include in a Private Road Maintenance Agreement?

Homeowners living on a private road must know the items they must include in the maintenance agreement. Although the agreements may look slightly different, a few items remain non-negotiable. Here is a list of five things homeowners must address when a private road maintenance agreement is drawn up.

• The People Who Are Bound by the Agreement The homeowner using the private road must sign the private road maintenance agreement. The signature must be in the owner’s full legal name used in the deed of the property. The process ensures that the person takes responsibility for all maintenance purposes.
• The Work Maintenance The homeowners who own the private road must know the types of maintenance they want for a particular road. For instance, dirt roads may require different types of maintenance, and roads with more traffic may require higher maintenance than those with fewer cars.
• The Individuals Who Will Make the Decisions Both smaller or larger groups of homeowners should appoint a single individual as the head or appoint an executive committee to make the decisions regarding the private road maintenance agreement.
• The Amount of Money that Each Homeowner Will Contribute The expenditure amounts for maintaining a private road may vary year after year. A particular year may require more expenses than the previous year and vice versa. Homeowners can choose a set amount for every year to build a reserve and contribute accordingly for the required maintenance.
• The Consequences of Non-payment The private road maintenance agreement must include rules regarding the consequences of not paying the fair share of the maintenance in a year. The document must also include a clause where the homeowner can sue another counterpart who defaults in payment. The road maintenance agreement is an important document that must be recorded in the deeds registry for additional protection. However, it is not always necessary for the deed to be recorded for it to be legally binding. Consult with a legal professional for specific guidance for your particular case.