Today’s question has to do with real estate. In this instance following their purchase the buyers discovered they owed additional money for road maintenance. This was a surprise to them and I’m assuming it was not in their budget. Now they are wondering about whether the real estate agent breached a duty of proper disclosure. We will briefly explore the underlying issues and I’ll set up the evidentiary tool box needed for any lawyer to help them know the answer to any questions.
But before we get to the question let's decide what is a road maintenance agreement? A road maintenance agreement is what it sounds like. Owners who own property adjacent to and who have access to a private road need to agree about how to divide the cost of maintaining the roadway. The owners need to be able to bind future owners to this agreement. This agreement does that and more. So when you purchase a home on a private, as opposed to a public roadway, you will need to ask about any agreement and the costs associated with maintenance. It's no different than buying a condo, there are certain documents you want to review before making an offer. What you're trying to determine are your share of the ongoing costs. I'll cover condominiums on another day, but for today here is the question.
Question: Is there a timeframe in which an amendment must be done to a road maintenance agreement is the names of the roads changed?
Question Detail: My husband and I purchased our home in 2010. We asked the Realtor if any association fees were attached and were told "no". [This is where the problem began.] We were sued in 2012 by a Road Maintenance Association that was supposedly formed 20+ years ago for money to repave our road plus snow removal. Our road is currently a state road, but listed as a HARP road with low priority. The judge ruled in our favor because the name of our street did not match the association's original agreement. We recently found out that our road's name was changed in 2007 from what the association agreement said originally to what our deed says now. We are being taken back to court over this and they are arguing that the name of the road does not matter. Shouldn't there have been some kind of amendment done to their agreement back when the name of the road changed? Is there a statute of limitations on that kind of agreement? Please help. Thank you.
Answer: This is a difficult question to answer without knowing the state, county and/or city-town where you live and without being able to read the road maintenance agreement. The laws can be very different; although I can give you some general advice to assist you in deciding how to begin your search for a legal solution. Generally speaking road maintenance agreements are between private owners of land and apply to maintaining private roads, as opposed to public roads.
Additional Facts Required:
Where is the road?
The opportunity to read the road maintenance agreement.
HARP is an anacronym I'm not familiar with in the way you're using it. With Fannie Mae and Freddie Mac it refers to Home Affordable Refinance Program. As for HARP roads I can't say what it is referring to because you didn't say in which state you reside.
Someone, probably a lawyer, will need to research the program, the statutory law and the applicable case law to determine this very technical issue about name changes and how that affects the obligations of adjacent landlowners under the existing agreement. I'm not certain of the answer without knowing the jurisdiction and having a chance to research this technical issue. But, to an inquisitive lawyer, there appears to be more to research.
There are two issues underlying your basic question and one points towards a potential claim against the real estate agent or sellers for failing to disclose the obligations running with this property. I'm wondering whether there is a legal duty to disclose the existence of the RMA Association and the second issue is whether a disclosure was actually made. I would never point the finger at the professional without first determining whether the buyer heeded the warnings given. You can't blame others when you yourself failed to protect yourself by reading what you are given.
Is There A Legal Duty to Disclose?
While there is no blanket or general answer to be given most states would require disclosure at the time of the sale. Iowa uses a seller disclosure form provided to all buyers before the closing. That is where your review will begin; read the seller’s disclosure form. (Sample, Seller Property Condition Disclosure)
Was There A Sufficient Disclosure?
Before considering a claim for failing to properly disclose you will need to re-examine all the documents you signed at the time of the sale-purchase transaction including the Offer And Acceptance when equitable title passed between seller and buyer. Keep an open mind and consider if you may have missed the disclosure. If this agreement was disclosed by the seller then it was disclosed by the real estate agent.
Did the Real Estate Agent Uphold Their Representation Duties?
What did you and your agent discuss about the property? Was the RMA brought up, discussed and fully disclosed? If you contemplate a claim against your real estate agent look at the agreement you entered into with the agency. Re-examine the documents you signed with the brokerage firm that represented your side of the deal. What disclosures and disclaimers did the seller and real estate agents make? A lawyer would need to review the exclusive representation agreement or nonexclusive agreement the two of you entered into and all other documents provided. No legal opinions can be given without knowing the agreement you entered into.
What’s Involved In This Legal Analysis?
I have not researched this issue so the information in this post may not apply to your case and my opinions could be that you have or do not have a valid claim. No attorney can express a valid opinion until he/she has reviewed all the documentation surrounding the agreement, the sale and then researched the statutes and case law. Yeah, you’re going to spend a little money finding out if you have a valid defense or claim; so expect to pay something to the lawyer who takes your case. Ask up front about fees and try to set a limit on how much you will spend to find out if you even have a claim. This is not the type of case where you can expect a contingent fee agreement to apply; the fee will be on an hourly basis.
Evidentiary Tool Box
- Road Maintenance Agreement
- Board Minutes of the RMA Association
- Annual Statements of the RMA Association
- Balance Sheet and Profit & Loss Statement of the RMA Association
- Amendments to the Road Maintenance Agreement
- Sale/Purchase Agreement
- Residential Property Disclosure Form
- Closing Documents
- Title Opinion by your attorney
- Homeowner Association Agreements
- Restrictive Covenants
- Agent’s Representation Agreement
- Correspondence having to do with the sale
- Emails having to do with the sale
- Any other documents from the sale
Good luck and here are a few additional resources.