All properties require access to public roadway systems. This typically involves a driveway connected to a public street. Easy enough, right? However, like the Yellow Brick Road that led to the Emerald City, a home with a private road must lead to a public roadway system.
UPDATE: As of November 25, 2022, the VA announced that private roads and shared driveways no longer require maintenance agreements to obtain VA loan financing. Read more.
If you are purchasing a property with a private road, there are two things that are critical to know about:
- Permanent Access Rights – Assurance for the lender and you, the homeowner, that you will always have access to use the private road in order to access the surrounding public roads. Otherwise, the home will be cut-off from public roads.
- Road Maintenance – Assurance that the road will continue to exist and won’t degrade over time without a method for it to be fixed.
There are multiple ways that permanent access rights and road maintenance are addressed when buying a single family home or a condominium. Let’s give you the details for each type of property.
Single Family Homes
Access – Single Family Homes typically have access granted one of two ways:
- Shared or sole ownership of an appurtenant lot/parcel – This means that the parcel that the home is on also comes with an interest in another lot that functions as the access road. If so, this should be indicated on the title report.
- Permanent Easement – This is a permanent right to use another lot that is typically adjacent to the subject lot. It differs from the situation above in that there is no ownership interest in the adjacent “roadway” lot, only a right to use the lot for access purposes. These rights should be clearly shown on the title report.
Maintenance – Single family homes typically have private road maintenance performed in one of two ways:
- Publicly Maintained – There may be an agreement with the local municipality to maintain the road. A copy of that agreement will need to be obtained. If it is recorded, the title company should be able to locate it. If it isn’t recorded, your real estate agent may be able to help locate the agreement. It is likely on file with the municipality. In Honolulu, the City and County will maintain private roads that provide access to six or more homes.
- Privately Maintained – There should be a recorded private road maintenance agreement between all the owners of the lot/road. If the property only has an easement and not ownership, the maintenance agreement may need to be obtained from the lot owner.
- If the subject property is part of a Planned Unit Development (PUD), the roadway lot is likely maintained by the PUD itself. A copy of the Covenants, Conditions, & Restrictions(CC&R’s) is usually sufficient to demonstrate this.
Access – Condos typically have access via the private road owned by the condo association itself.
- If the private road is part of the condominium’s common area, that should be indicated in the title report.
- Permanent Easement – This is a permanent right to use another lot that is typically adjacent to the condominium’s lot(s). It differs from the situation above in that there is no ownership interest in the adjacent “roadway” lot, only a right to use the lot for access purposes. These rights should be clearly shown on the title report.
Maintenance – The roadway lot is likely maintained by the condo Homeowner’s Association (HOA) itself or the HOA has an agreement with the local municipality to maintain the road. In either case, a copy of the CC&R’s is usually sufficient to demonstrate this.
Our team at Hawaii VA Loans is driven to simplify the VA loan homebuying process for you. We hope that this blog helped answer some of your questions about buying a home on a private road. If you have any more questions about this post or the VA loan process, please don’t hesitate to contact us at 808-792-4251.