Investor · Bedford, IN · Member since 2015 · 69 posts · 29 votes
Home Sale Requiring me to enter into contract with neighbors?
...or I could have titled this post:
VA Requires a Home Owners Association to be created?
My neighbor is selling his home and the VA home loan that the new buyers are getting is requiring me and my other neighbor to enter into contract to maintain our road.
Here's the deal: I live in a nice neighborhood and on a private drive off the main road. On this 'private' drive are 3 homes. Mine and 2 others. It is a normal asphault road/ drive (single lane).
My neighbor is selling their home and they are asking me and the other neighbor to sign a contract stating that all three neighbors will maintain this road in 'good' condition for perpetuity and this contract shall 'run with the land'
Sounds like I would be creating/ joining a type of HomeOwners Association, and placing some sort of 'deed' restriction on my property.
Why would I do this? .... other than to keep my neighbor that is moving happy.
@Anthony Newbold, If it isn't required by your municipality, Why do it? The truth is, it's really not that big a deal so long as you aren't required to pay into a HOA to build up reserves for future maintenance. However, fundamentally, I would have a problem with a buyers' lender, requiring property owners, other than the sellers', to agree to a deed restriction. This is my opinion, but, I would tell your neighbor that they should ask their buyer to go with a different loan program, or terminate, as you don't feel comfortable with what they're asking you to do. Just my two cents.
Unfortunately you are in a tough place. At some point that road will need maintenance. Without an agreement who is going to repair it? When the road deteriorates it will likely affect the value of your property.
Regardless of the current sale this could be an issue for you eventually. If you plan to move long before the road is likely to show signs of deterioration than this agreement many be to your disadvantage. However it may help sell the property when the time comes.
This is a very common issue when purchasing property. Any kind of govt loan will require a maintenance agreement for the care and up keep of the road. They are actually very simple (about a 3 page document), just have an attorney draft the maintenance agreement as you and the neighbor sharing 50/50 responsibility and cost of the upkeep and that will satisfy the VA requirement.
Thank you so much. This is why I enjoy Bigger Pockets...
My initial thoughts were 'Hell No' because I do not want any limitations on my property when I decide to sell.
As for upkeep, we've really had no problems as neighbors pitching in when necessary. BUT who knows what the new neighbors may demand. In fact none of us have control over whom are neighbors are, good or bad.
Lastly, I personally would like an automated gate installed at the entrance of our road, thereby making the 3 of us a 'gated' community.
Keep the posts coming. They are very much appreciated.
If you check your deed there is probably an easement of some type to allow access for all the homes off your road Is is shared ownership of the road or does one property have a dominant or servient easement? What if you wanted to sell your property in the future and ran into the same scenario? I am not supporting either view just a few things to consider
I thank all of you... most of all keep them coming because my neighbor will be expecting something soon...
I am of the thoughts that the above fella said:
"They're asking for a contract that benefits another party and attaches liability to you.
I would not encumber my property at the demand of another party unless I was properly compensated for it."
Yes, this is true, but they are my neighbor... (on the other hand not for long), but they are my neighbor... (your new neighbor may be an A**hole), but they are my neighbor (but they may make 50K off of this simple decision for me to sign, or not, what is that actually worth?)
As you can see I am undecided... which is why I thoroughly enjoy and need the input of all folks here.
I don't see the problem, And this should have been in place from the very get go. Who pays to repave the road when it needs it, or repair when it gets wiped out by a flash flood, etc. And the view that it would "benefit another party.......", BS. This agreement would benefit, and protect, All 3 of the owners, including you. You already Have a shared road, you Need a shared road agreement.
I took the contract to my banker and title company guy....
... apparently mortgage regulations have tightened since I purchased my home and it seems that it would be basically required to protect the asset.
In that light I figured might as well have it in place now before I sell my own home. So I signed it, however, with compensation.
The son of the home seller will likely be drafted into the NFL as a kicker. I now will have 'season' tickets if that occurs. NOTE: I may have to travel to enjoy this reward. :)
I took the contract to my banker and title company guy....
... apparently mortgage regulations have tightened since I purchased my home and it seems that it would be basically required to protect the asset.
In that light I figured might as well have it in place now before I sell my own home. So I signed it, however, with compensation.
The son of the home seller will likely be drafted into the NFL as a kicker. I now will have 'season' tickets if that occurs. NOTE: I may have to travel to enjoy this reward. :)
Since this benefited all I hope the compensation was nominal. I think the better move would have been to negotiate the private gate that you want. Now you have lost your bargaining position and possibly a new owner looking for pay back when you bring up your desires.
You are correct. I would have loved to have the private gate. I figure it would have cost max. 10K to enter into our community (3 homes on our private drive)... and cost us about 3K each... but would have increased the value of our homes by at least 15K each.
Hmmm.... I think you are right.. I should have waited it out and negotiated this one a little better.
On the other hand.... if he's a really good kicker for the NFL.... (I love FOOTBALL!).. AND I GET SEASON TICKETS FOR THE LIFE OF HIS CAREER? ... yes, kickers have longer life in the NFL compared to our other neighbor (left tackle)... so I'm thinkin'... well, let's just say I'm hoping for the best.. ;)