The need for written "expense commitments" if you live on a private road

Many people, in Braintree and elsewhere, have homes on streets which have not been made public streets, as such, and which do not receive town or city maintenance or snow plowing in the winter. If your home is the only home on a private street, the simple fact is that you will be solely responsible for the maintenance and snow plowing, and that is a basic fact that is probably expensive, but easily comprehensible.

Problems have recently arisen in the mortgage community with respect to private ways which are abutted by more than one property owner. In most situations like this, one of the owners takes responsibility for hiring a snow plow person and/or maintenance person, and the parties agree on what is a fair share for each abutter. These arrangements are usually informal and have been in effect on a satisfactory basis for long periods of time. In effect, good neighbors have treated other good neighbors fairly, and there are usually no issues with obtaining payment of the agreed amounts owed for the services in question.

Underwriting standards are constricting in many areas. A new requirement for having Private Road Maintenance Agreements ("PRMA") in place is one of these areas. In effect, some  Lenders need to have in a written agreement in place (executed by all abutters) which sets forth certain understandings, commitments and responsibilities, in detail, before a mortgage loan will be approved for a property on a privately maintained street.

While the old adage, "if it is not broken, why fix it?" may be the sensible way to handle long-standing relationships, the new breed of underwriter wants a PRMA in place, and executed by all affected parties before a loan approval will be granted.

I have been working with many people who reside on private roads to get a PRMA in place prior to your being in a position where you are selling your home. The document I have developed is relatively straightforward, and addresses the issues which Lenders are concerned about. Like any other situation, this one is best addressed in advance rather than at a point where the success, or failure, of a transaction may hinge on getting all abutters to "buy-in" to the concept.

If the document is distributed to all parties, with everyone having a chance to review same on a due course basis, I have found that each abutter will realize that having an appropriate PRMA in place is something that will ultimately inure to their advantage. Please feel free to contact me if you would like me to assist you and your neighbors on this matter. I am not stating that all investors will be requiring a PRMA. I am just saying that if your Buyer is borrowing from a Lender that does require a PRMA, it is much better for you to have one in place, rather than to be "under the gun" in obtaining one with the success, or failure, of your home sale in the balance.