Private road maintenance agreements

[secondcurve]

Originally Posted by Loony Singer

Went through a very painful experience with CitiBank re "private road maintenance agreement." There are 7 houses on our dirt road, and our next door neighbor just asks each property ower to cough up around $100 every few years to cover grading. A couple of years ago, CitiBank was prepared to reject our rather substantial refi because there was no PRMA in place. I couldn't believe it...they were prepared to reject a good-sized piece of business for the sake of an expenditure that amounted to such a paltry sum!

I spoke to three different lawyers around the Lake, and they had only a vague familiarity with the idea of a PRMA, except in the case of an actual association. One of them said that, apart from that, he had only drafted a single one in his 30 years in the business.

But in any case, here's what I had to do to get the OK from this bank.

First, I had Scott in the highway department send me an official-looking letter stating that the town does indeed plow the road in the winter. Was that enough for CitiBank? Nope.

Next, I got my very nice next-door neighbor to write a letter stating that he served as "road agent," for our little lane, and describing the approximate cost of re-grading and the process he went through to get everyone to contribute their share (he just asked, and everyone always paid up). Did that satisfy CitiBank? No, it did not.

Finally, I asked the town planner (forgotten his name...think he's gone now) to send me another official-looking letter stating that neither the Town of Moultonboro nor the State of NH required such a thing as a "private road maintenance agreement." That finally got us the green light from CitiBank. Gaaaah!

For this and many other reasons, dealing with CitiBank was a nightmare...I would never use them again.

If, as an earlier post suggested, this kind of hassle can be avoided by putting together a simple document of a few paragraphs, it might benefit everyone on the street who might want to sell or refinance their property in the future.

It's not Citi Bank per se. Rather it is Citi Bank's desire to be able to sell the loan into the secondary market. To do this, it needs to make sure it meets numerous government regulations. Any bank would face the same problem aside from a local bank who as an earlier poster mentioned might be willing to hold the loan on its balance sheet. The problem with this is you will be required to only put more money down but also you will be looking at a higher interest rate.