New Hampshire has a new law on the books, and it states that most private roads must have a maintenance agreement. We understand why having an agreement is important. However, an agreement can still create problems. Therefore, we recommend creating an association to ensure there is an extra layer of protection for every person involved.
When you create an association, you have leadership, specific financial accounts, insurance options, and even guidelines for what to do with delinquent owners.
It is often best if there are specific people in charge of making sure a private road maintenance agreement is followed. The leaders can be voted in and then they would be responsible for holding meetings, sending out the minutes to those meetings, and even signing contracts.
If you do not form an association, an individual person would be responsible for holding onto all the money in their personal checking or savings account. We imagine you can think of all of the ways this could go wrong. At least with an association, a private road maintenance account can be opened. Leader names can easily be added and removed, as new people take over the leadership roles.
Most insurance companies will issue a policy to associations for the protection of the property. The leaders are often covered in terms of liability too. Without association insurance, most people would need to rely on their personal homeowner’s insurance.
Guidelines for Delinquent Owners
There is always going to be that one homeowner that creates a major headache. They may not want to put money towards the private road maintenance agreement or won’t pay on time. Or they could disagree with what work is being completed or the quality of the work itself.
Creating guidelines can be helpful in these situations. However, an association can also be helpful if a lawsuit needs to be brought against the delinquent owner. The lawsuit is in the association’s name, which makes it easier to collect the judgment and understand where the money must be used.
If you have a private road maintenance agreement or need one, you may want to consider forming a not-for-profit corporation. That is the most common type of association in the state of New Hampshire for private road maintenance agreements.
Property owners that wish to become members of the association would be required to sign a contract. Yet not everyone is required to join the association. While those people who do not join are not required to follow the rules and regulations of the association, they will still be required to follow what is within the private road maintenance agreement.
You can contact me at any time if you have any questions about private road maintenance agreements or forming an association. I will answer your questions honestly and guide you in the direction that is best for you.