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Bill would provide shared responsibility among homeowners on private roadways

by Bill McFalls on

The Pennsylvania Association of Realtors® has worked through the summer asking legislators to support House Bill 523 (Day, R-Berks), which would amend the Private Road Act, and we anticipate movement on the bill in the coming weeks.

Some Realtors® have seen a disruption in home sales, specifically with properties that contain or are bordered by a private road. Regulations for federally backed mortgages like Fannie Mae, VA, USDA and FHA loans require these properties to have an agreement for the maintenance of the private roadway, outlining responsibility of repairs, including what each owner’s share is, remedies for default and terms of the agreement.

PAR has heard from members throughout the state who reported difficulties in closing a transaction because lenders have adopted this requirement.

Centre County Realtor® Derek Canova said he had a client who wanted to purchase a property in the county. An appraiser’s report showed that the home was accessed on a private roadway and the underwriter said the loan would not be approved until an agreement was reached with at least 18 of the 20 owners who used the road. Just a week before closing, it was discovered that the local municipality had abandoned the road. Initially, the buyer wanted to back out of the purchase. Instead, a notary was brought onsite to allow the owners to sign off on an agreement.

Because Pennsylvania doesn’t have statutory requirements for private roadways, it’s making it nearly impossible for many homebuyers to purchase the home of their choice because lenders can’t issue federally backed mortgages to purchase these properties.

HB 523 would amend the Private Road Act to provide for basic maintenance for a private roadway in the absence of an agreement between the homeowners. This would allow the homeowners to contribute to the maintenance of a private road when it’s used to access their properties. The statewide basic agreement simply provides shared responsibility among all homeowners along the roadway, unless any pre-written agreement states otherwise.

We believe amending the Private Road Act to provide statutory requirements for the maintenance of private roadways when a private agreement isn’t in place would remove unnecessary obstacles from the homebuying process.

Please watch for more information as PAR continues to work on this issue.

If you have examples of how private roadway maintenance agreements have affected your clients, please send them to PAR using the form below.


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Topics

House Bill 523 Private roadways Private roadway maintenance agreements
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