Who owns our road? Need input from small associations

Started by LauraR2 • 49 replies • 3594 views

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LauraR2 (West Virginia)
Posts: 41

Posted:

I am looking for input from other small associations. Our only common areas are our gravel roads, which the association maintains. We are required by WV state code to carry insurance on the "common elements." One board member claims we cannot have insurance because we don't own anything. My understanding is that all Association members "hold the road in common" but I'm not sure where I heard that. I'm waiting to hear back from several insurance agents but this isn't a common type of policy in our area and I want to make sure they give us the right type of coverage.

My question is two-fold: who owns our road, and what type of insurance do other small associations carry?

MaryN (Virginia)
Posts: 125

Posted:

In our community the property owners own the land the Assoc. has the "right-of-way" and the BOD told us that they were not able to get insurance on the roads because they don't have ownership. If you go to the courthouse and pull up the deeds of the properties you'll be able to see who owns the roads. We do not have insurance on anything other than the BOD's.
MaryN

LauraR2 (West Virginia)
Posts: 41

Posted:

Thanks Mary. Are you saying there is a deed to the roads at the courthouse?

BrianB (California)
Posts: 2,820

Posted:

there areplot maps at the courthouse, and you can see if the roads are separately plotted with an owner deeded, or if the roads are simply given rights of way but are part of each individual owners land.

BruceC2 (Virginia)
Posts: 54

Posted:

LauraR2
As with our association all property owners property line pins are in the middle of the road and a deeded right of way of every lot is 10 ft. from the middle of the road for road and drainage. We have the maps of this in assocation records, Our only funtion as the association documents state is that our association was set up to maintain the roads. I have found no insurance for this and explained this to the association after placing signs at the entrance for no trespassing owners and guest only as well as a couple of rough road signs on a couple of roads needing more serious repairs. This was done to hopefully head off any claims against the association as to someone waundering in here and filing a claim for damages. Although it does not correct the bigger problem of why we need the signs in the first place. It only shows we tried to warn of possible problems!

BruceC2 (Virginia)
Posts: 54

Posted:

LauraR2
I thought this might also help in your question, We attempted last year to get vdot to take over our roads, vdot wanted 25ft right of way from the middle of the road. Every homeowner would have had to sign an agreement to give the additional 15ft of land for this to happen. Several opposed so that ended the vdot proposal. Also we were threatened with a lawsuit from one homeowner that said we went over the 10ft to correct a drainage issue.

LauraR2 (West Virginia)
Posts: 41

Posted:

Thanks Brian and Bruce. I will have to go to the courthouse to investigate. I have our plat map at home which shows the whole neighborhood. I'll look at that later too.

So, what would happen if someone sued your association because they broke their leg falling into a pothole? Even if they were an invited guest and not violating the posted signs?

DonnaS (Tennessee)
Posts: 5,671

Posted:

LauraR
Does this road go in between your homes, like splitting it in half?
Your Plat map will have whether the road is part of your common property. It should be spelled out on the plat and within your documents as to common property and responsibilities. Money says that it belongs to your association. Read that first before you make a trip to the County offices.

If you fail to maintain it and someone gets hurt because of negligence, it doesn't matter that it is posted as private, there will be some responsibility to the association.

BrianB (California)
Posts: 2,820

Posted:

The leg breaking incident you mention is exactly why your HOA needs some insurance. If you have any common areas, you need liability insurance at the least.

If you do not have such insurance, then they sue the association, you get a settlement or judgement, then you must pay it. If you can't pay it, then you raise assessments among all owners to raise the money needed to pay.

an HOA is a business: it has shareholders, liabilities, assets, budgets, expenses, etc..

GloriaM (North Carolina)
Posts: 829

Posted:

Laura:

Liability Insurance and Director's & Officer's (D&O), speak to an insurance agent who will come out to your community and is the best one to give you coverage amounts. As always get more than 1 quote to ensure getting the best price.

DebbieS3 (Colorado)
Posts: 3

Posted:

Another thing to look at besides vdot taking over your roads, is the local civic entity. I live in a townhouse community where we have private roads. We are working with the city to take ownership of the roads. It is a bit of a process, but then they own and maintain the roads, which also means snow clearning. Try your civic community also besides the dot. We have an advantage that they are paved and are new, only being about 3 years old.

OlyJ (Massachusetts)
Posts: 11

Posted:

If the HOA is sued, can it just declare bankruptcy to discourage the lawsuit?
Wouldn't the homeowner be ultimately responsible?

DonnaS (Tennessee)
Posts: 5,671

Posted:

OlyJ,

HOA's just can't declare "Bankrupcy" As long as there are members who jointly own the association and it is a Not For Profit Corp, which almost all associations are, then there are other vehicles to get this resolved. Bankrupcy of an association would affect all of the partners in the corp negatively.

LauraR2 (West Virginia)
Posts: 41

Posted:

OK, I've done some homework. I believe the POA owns the roads. Someone please tell me if I'm wrong. On the maps, our lot markers go up to the edge of the road. The road is clearly marked on the map, although no mention is made of its ownership. On the R&RC, recorded in the deed book at the courthouse, it says, "The roadways and right-of-ways constructed throughout the subdivision are hereby dedicated to the Association by the Grantor, and are for the use in common of the grantor, lot owners and their respective heirs, successors and assigns, The dedication shall not inhibit convenient use of the Subdivision's roadways."

One insurance agent said she cannot insure a road. I'm still waiting to hear from a couple of other agents.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Laura,
The association owns the road as common property, that means that they are your to maintain and insure.

LauraR2 (West Virginia)
Posts: 41

Posted:

I just got off the phone with an insurance agent who laughed when I told him that the other agent said they can't insure a road. He has written a policy for another Association in the area so he has some experience. He says the POA owns the roads so they are ours to insure. He said if we get sued, they will sue the POA, the BOD, and each member individually. Yikes.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

LauraR2: "One insurance agent said she cannot insure a road..." I don't believe you are insuring the road per se'. What you are seeking is insurance against an incident/s whereby someone would sue the Association for a liability involving the road (which has been dedicated to the Association for repair/maintenance, not the county).

DonnaS (Tennessee)
Posts: 5,671

Posted:

Very good Paul. That is exactly right

BruceC2 (Virginia)
Posts: 54

Posted:

PaulM & DonnaS
Curious to know who insures your roads as from other common areas you may have, are there seperate polocies? Why would an insurance company insure a call it pre-existing condition or in our case pre-existing negligence. As for county or city have you heard of anyone suing over there vehicles being knocked out of alignment for hitting a pothole. I perfectly understand common areas needs to be insured but the question in the beginning was road insurance so you must have some,,,could you please share with us what yours includes.

BrianB (California)
Posts: 2,820

Posted:

a road owned by an association is a common area. the LAND is common area, and needs to be insured against liability, etc. It matters not the USE of the land (fallow, park, greenbelt, road, gate, drainage, etc.). It is a liability waiting for a lawsuit, simply by being in existence.

Cities, states and counties get suits filed all the time for road hazards: Potholes breaking tie rods, steel plates springing up and damaging oil pans, etc. You better believe cities are insured for their roadways.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Laura,

Your post: RE: Who owns our road? Need input from small associations
Message: OK, I've done some homework. I believe the POA owns the roads. Someone please tell me if I'm wrong. On the maps, our lot markers go up to the edge of the road. The road is clearly marked on the map, although no mention is made of its ownership. On the R&RC, recorded in the deed book at the courthouse, it says, "The roadways and right-of-ways constructed throughout the subdivision are hereby dedicated to the Association by the Grantor, and are for the use in common of the grantor, lot owners and their respective heirs, successors and assigns, The dedication shall not inhibit convenient use of the Subdivision's roadways."

One insurance agent said she cannot insure a road. I'm still waiting to hear from a couple of other agents.
***************************************
Starting with "The roadways and right of ways, etc.

Their should be something in your turn over papers from the Grantor (developer) that should deal with how this all passed to the association. Maybe you will find they were never turned over or were turned over improperly. The way this read the grantor still has free use of the roads and his respective heirs, successors and assigns. Also notice that this includes the "right of ways (Whatever they mat be.)
IMHO

DonnaS (Tennessee)
Posts: 5,671

Posted:

Hi Robert,

You said that "the grantor still has free use of the roads and (HIS) respective heirs, successors and assigns."

I copied the post from Laura and

it says, "The roadways and right-of-ways constructed throughout the subdivision are hereby dedicated to the Association by the Grantor, and are for the use in common of the grantor, lot owners and (---THEIR---) respective heirs, successors and assigns, The dedication shall not inhibit convenient use of the Subdivision's roadways."

There is just the one word--his verses theirs, which changes the entire meaning of the paragraph and to useage. Do you want to go for new glasses with me? I needed new ones twice last week.
Thanks Robert, Donna

LauraR2 (West Virginia)
Posts: 41

Posted:

I have been either a director or an officer since the beginning and I can tell you with certainty that there are no "turn over papers" from the developer. We have only R&RC, By-Laws, and Articles of Incorporation. The developer is filing for bankruptcy and no longer answers or returns phone messages left on its answering machine.

Are we missing something important here? I took that passage from the R&RC ("The roadways and right-of-ways constructed throughout the subdivision are hereby dedicated to the Association by the Grantor...") to be the official "turn over." It's recorded in the Deed Book after all.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Laura,
You probably wouldn't get "Turnover papers" from the Developer. He would have recorded your association with your County after he would have gotten his Bond money back from the County and that would have been only after your Board had signed off on it. The documents that you have are what you should normally have been given. Check in your County Clerks office to see what they have on record for your association. That is a good start anyhow.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Donna,
Well, I see your point and I agree you may be right about the meaning. I just wish I knew enough to argue about it. I am used to being wrong, even when I'm right, and bow to my superior with the better glasses. In fact, I had cateracts taken off both eyes and no longer use glasses to read. However I think they may have removed some of the nerve connectors from the eye to the brain, but that is another story. I agree Laura should see what is really on record at the Clerks office, and maybe see what the deed reads. I guess someone is paying taxes but that don't mean they own the property.

I thank you for the correction and still say, you should come to SC.

We have a sign in our dumpster area put up by our manager that says:
No Trespassing,
Private Property
There is a $10.00 a bag charge for illegal dumping.

Been there for years and I am the only one that thinks this sign is crazy.
The Board has no problem with it, and the manager thinks it discourages illegal dumping because of the fine involved.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Donna and Laura,
After sleeping on this, I wonder what your translation of this would be.
The term "dedicate" seems and unusual term to use when you are transferring property, and even considering my "mistake" in words, doesn't the statement still mean that the Grantor still retains some standing? I really don't know. I sure don't want to be "splitting hairs".

BrianB (California)
Posts: 2,820

Posted:

yes, the grantor can still drive on and use the roads. You cannot legally bar the grantor from doing so, under the wording of the deed restrictions.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Brian,
From the information that we are working from, does it say who owns the roads. Regards not getting any transfer paper when an organisation assumes ownership of the property, I have never been real involved with the mechanics of that but I do know our Masterdeed and I believe our declaration makes reference to the original developer (declarant)and the establishment of the control of the Association. I just have some trouble understanding the information we have, especially the word "dedicated" in terms of ownership.

Hello Donna, you rascal.

LaverneB (Florida)
Posts: 129

Posted:

I agree with Donna. Our area is 216 homes and the roads are private we maintain them. You should have insurance of some kind on the roads we are in city limits but put up our own stop signs, speed signs,etc

RobertR1 (South Carolina)
Posts: 5,164

Posted:

LaverneB,

In SC we are an Island gated community. We own and we pay for paving, etc, etc, and have a Security force empowered to wear guns and write tickets. We are zoned as a Planned Unit Development. The first developer around the early sixties bought all the non developed land. I think there was a few people that had fishing cabins. From that point the developer owned all the land and his successors still own some land and the Amenities and land. It's more or less a mystery who hold deeds to what. But at some point the owners started a POA and as the roads were put in they were paved. some of them, and turned over to the POA to maintain. Now, my question to you is, do you restrict the use of the roads? We can call for the Sheriff's office and they will respond, even though we have a Fire Department and Ambulance service it is all handled by the 911 system. Our POA has deeds to cover ownership of the roads and right of ways. We pay a nominal county tax on the roads and carry Liability on all the roards. It seems that is the only insurance you can get on roads. I did find out in this area of SC some home owners in the city limits (HOA's) started out by maintaining their roads and later got the city to cover the maintaining of the roads because they pay city taxes also. I also found out at least in some places it is a big mess and not much is uniform. So it appears if there is anything a HOA can do to have someone else take over the roads, it's been done before.

BrianB (California)
Posts: 2,820

Posted:

the roads were dedicated to the association, so the association owns the roads.

LauraR2 (West Virginia)
Posts: 41

Posted:

I think Brian is right. The confusing thing is that there is no deed to the roads per se, just what is in the R&RC (which is recorded in the Deed Book). Also we don't pay property taxes on the roads.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Laura and Brian,

I find the below interesting. I Googled Law Distionary and lookied up:

dedication
n. the giving of land by a private person or entity to the government, typically for a street, park or school site, as part of and a condition of a real estate development. The local county or city (or other public body) must accept the dedication before it is complete. In many cases there are "dedicated" streets on old subdivision maps which were never officially accepted and, in effect, belong to no one. The adjoining property owners can sue for a judgment to give them the title to the unclaimed (unowned) street or property by a quiet title action or request abandonment by the government which did not accept the street or other property.
See also: quiet title action

This may not be germane to what we are talking about. I just don't know.
I am not trying to be a "right fighter" here. I can see a developers lawyer using this "dedicate" term if he felt he needed it in the future.
Now I'm starting to see devils behind all the trees.

LauraR2 (West Virginia)
Posts: 41

Posted:

I hope no one minds me resurrecting this old thread. I found some new relevant information I would like to share (and get input on) regarding who owns our road.

Further in our R&RC, it states, "Grantor shall grant and convey to the Association, and that latter shall take and accept from the Grantor, the Common Areas, not later than 60 days after 100% of the total lots subject to this Declaration have been conveyed to an owner by mortgages, judgment liens, or similar liens or encumbrances. The Common Areas shall be the roadways and walkways enclosing the common area on recorded subdivision plat of ***** **** [development]."

I am not even addressing the insurance issue in this post. Can someone help interpret the above quote? To me it sounds like there is a deed or something official that needs to take place. All of our lots have been sold but the Developer is now out of business! Has anyone else gone through this process? The people at the courthouse weren't very helpful, unfortunately.

KirkW1 (Texas)
Posts: 1,665

Posted:

You may have to get a lawyer to resolve it once and for all. But I wouldn't worry too much about it if all you are talking about is the roads.

As for the insurance, you can get liability for the association regardless of what they own. The road itself probably can not be insured and you will simply have to maintain reserves to deal with repairs.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Quote:

Posted By LauraR2 on 06/12/2008 12:59 PM
I hope no one minds me resurrecting this old thread. I found some new relevant information I would like to share (and get input on) regarding who owns our road.

Further in our R&RC, it states, "Grantor shall grant and convey to the Association, and that latter shall take and accept from the Grantor, the Common Areas, not later than 60 days after 100% of the total lots subject to this Declaration have been conveyed to an owner by mortgages, judgment liens, or similar liens or encumbrances. The Common Areas shall be the roadways and walkways enclosing the common area on recorded subdivision plat of ***** **** [development]."

I am not even addressing the insurance issue in this post. Can someone help interpret the above quote? To me it sounds like there is a deed or something official that needs to take place. All of our lots have been sold but the Developer is now out of business! Has anyone else gone through this process? The people at the courthouse weren't very helpful, unfortunately.

Laura,

What normally happens is the developer deeds, to the assn, all the common areas at the time of transition to the members. If the developer did not do this b/4 going out of business then the assn doesn't own the common areas and this alone could open a whole new can of worms! If the board is unable to research this matter alone, I would suggest contacting an attorney. The board needs to find out who owns the common areas and where to go from there. There is one thing mentioned in the quote that is confusing. It says "the common areas shall be the roadways and walkways enclosing the common area. . ." If the common area is only the roadways and walkways then what is the "common area" they enclose???? The board needs to find out about ALL the common areas; not just the roadways and walkways.

Contrary to what Kirk says, I believe it is a matter to be worried about, even if "only" roads are at issue. Roads are very costly to maintain and may be contained in a parcel that is subject to property taxes.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Laura,
I suppose this has all been considered, but, be sure you have copies of all the original transer of the deveoper to the association. I read this as saying when the turn over is complete papers (includng deeds, descriptions, surveyors results and a physical description the the land , among other pertinent papers) has to be recorded in the court house (city or county) Check also your state business filing and see how your association is listed. Make a formal request for these papers or to be allowed to copy anything the court has on your association, if your name is on it, you can have a copy. IF the apporiate courthouse don't respond go to county administrator, or city manager and if that fails go to councils of city and county.
It is not a good idea in my mind to let this hang.

However, I have certainly run across competent people who would take the same attitude as Kirk, so don't neglect his viewpoint. It does make some sense to not go looking for problems and it may turn out you will never have to deal with them.

If you would be aware of these papers and not abide by them is not good, and the same stands if you suspect there is a problem and don't address it, it can bite you at some point.

LaverneB (Florida)
Posts: 129

Posted:

Laura, I am BOD pres. of our assoc. we are having are roads re-paved after 30 years. Our roads are private and the assoc. is paying to have them done.I live in a small community of 216 single family homes. Having kept private has its draw backs such as this, we supply our owm signs, police can not ticket for running stop signs, etc..As far as insurance that the assoc has for all our place, including the road area which is in reality "common ground" hop ethis helps some. I am in the state of Fl

LaverneB (Florida)
Posts: 129

Posted:

SusanW1 (Michigan)
Posts: 5,202

Posted:

The developer of our land dedicated the entire subdivision, ie. roads, water system, community center, outlots, etc in 1927 to the residents, who then formed a HOA not-for-profit corporation. We take care of all the roads and bridges - the county won't have them because they are non-compliant (one lane bridges), roads not wide enough, so we are really "stuck" with them.

Liability insurance for all corporation properties covers all properties owned by the HOA. Just watch that you put nothing in the right of way for cars to hit (large landscaping rocks, etc.) Form a Road Committee and get them passable and constantly maintained - that is your obligation.

SandyC (West Virginia)
Posts: 18

Posted:

We are a small HOA (12 homes) in West Virgina and our insurance covers BOD's, water drainage area, small wooden bus stop (even though the school does not recognize it - builder put it up) and the road (which is about 1 mile long). We were told the road is the responsibility of the HOA (ex: resurface, snow plow)

LauraR2 (West Virginia)
Posts: 41

Posted:

This is a really huge can of worms. Apparently there are property taxes to be paid. They come due July 1. The developer is still on record at the assessor's office so that is where the bill will be sent. The developer is out of business. Then where will we be?!?

SusanW1 (Michigan)
Posts: 5,202

Posted:

Property taxes are the responsibility of the owner. That needs to be cleared up, first.

But what do you (or will) own that you will need to pay taxes on? The roads will not be taxed; if the HOA owns a platted land lot, that may get taxed.

And you can appeal the taxes in front of the Appeals Board, if you are taxed on anything. But I am confused as to what exactly is being taxed?

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Laura,
Susan is right, you may be right, I am confused and this thread appears to not end. I quote, "Appartently there are some taxes that will have to be paid." If it is evident to you (apparent), what are these taxes on? I suspect those taxes were paid last year. Did the developer pay them? If you all took over this property by deed recorded at the court house, you will pay them. There is also the appeals route and as suggested, if the tax people can't tell you who is responsible for the taxes, how can they send a bill. If they sent you a bill ask them to show you ownership of the propoerty and deed with description.

Maybe the way to go is wait until July and someone gets a bill, then get on line and trace the property through the court house records. Take everything in hand and appeal if you want.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Laura,

I know it can be confusing wading through all the responses to one's post. So, just to recap: In my initial response, I suggested:

1) Find out who owns the common areas. If the board is unable to do this then hire an attorney to do it. The developer should have transferred title to the common areas to the assn., but may have gone out of business b/4 doing so.

2) Find out exactly what "common areas" means. You quoted your docs as saying "common areas shall be the roadways and walkways enclosing the common area". There must be more than just the "roadways and walkways" comprising the common areas.

3) The common areas may be subject to property taxes, especially if comprised of more than just "roadways and walkways".

Resolving this issue should be top priority with the BOD.

SallyL (Colorado)
Posts: 24

Posted:

how do you find out if your association roads are insured,and what roads are in insured.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Sally,
I would open this question in a new thread.

In short, you ask your association, you look at property records to see who owns what roads. Ask someone involved in the operation of the association like a member of a grounds and roads committee.

SallyL (Colorado)
Posts: 24

Posted:

nobody knows anything in this association.what i do know is we all pay dues for road maintenance,snow removal,etc.we believe that means all roads shown on plat map.they believe a curtain road is not for all to use just lot owners on that road.but it does get plowed in the winter,and graded in the spring

EllenS1 (Florida)
Posts: 1,148

Posted:

Laura,

Contact the city or county to learn who owns the streets. We are 101 townhomes and employ a managment company wo have isurance that covers our commmon elements, liability and of course D &O insurance for our board.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Quote:

Posted By SallyL on 07/30/2008 9:21 AM
how do you find out if your association roads are insured,and what roads are in insured.

Sally,

IMO, the assn ins would only cover whatever proprety (common areas) that is owned by the assn. If assn use of the roads is granted thru an easement then they most likely are not owned by the assn and are not covered by assn ins.

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