Practical Pointers from Practitioners

Amendments to the Pennsylvania Private Road Act

Contributing Author: Olufunke O. Leroy, Holland & Knight LLP, The Cira Centre, Suite 800, 2929 Arch Street, Philadelphia, PA 19104.

Recent amendments to the Pennsylvania Private Road Act may satisfy lender requirements for a private road maintenance agreement by establishing maintenance obligations on property owners sharing a private road in the absence of a written maintenance agreement.

Pennsylvania Private Road Act

The Pennsylvania Private Road Act (PRA), which is codified in Title 36, Section 2731 et. seq. of the Pennsylvania Code, permits the owner of a landlocked property to petition the Court of Common Pleas for appointment of the Board of Viewers to evaluate the necessity of a private road to connect the landlocked property to the nearest public thoroughfare or private way leading to a public thoroughfare. Suppose the Board’s report finds that an access road is necessary and that the public would be “the primary and paramount beneficiary” of the proposed access road. In that case, a new private road may be laid out on the adjacent property, causing minimal damage to the property. The landlocked property owner bears the cost of laying out the new private road.

Before passage of the recent amendment, the PRA provided that private roads so opened shall be repaired and maintained by and at the expense of the persons at whose request the road was opened and by their heirs and assigns. New banking regulations, however, require express maintenance agreements for properties accessed by private roadways to ensure that the roads remain passable over time. Specifically, regulations for federally backed mortgages like Fannie Mae, VA, and USDA loans (on a case-by-case basis) require such properties to have an agreement for the maintenance of the private road that outlines the responsibility of repairs, including what each owner’s share is, remedies for default, and terms of the agreement. Though this requirement may be more easily met in planned communities, it raises a challenge when a private road has been maintained in accordance with the PRA without any additional written agreement. Without such a written agreement in place, these lenders will not provide financing to close the transaction. Indeed, purchasers of properties that contain or are bordered by a private road who are unaware of this lender requirement have encountered difficulties in closing the transaction, sometimes resulting in delayed closings or deals collapsing due to private roadway issues. The amendment to the PRA addresses the maintenance of private roads by providing for maintenance agreements in the absence of a written agreement.

PRA Amendment

The PRA amendment—signed into law on October 7, 2021, and made effective on December 6, 2021— addresses the challenges of properties on private roads without maintenance agreements by imposing a statutory minimum maintenance agreement for all properties on private roads. As has always been the case, all private roads are maintained and repaired by and at the expense of the person or persons respectively at whose request the same were granted and laid out, and by their heirs and assigns. As set forth in the amendment, “[e]ach property owner that shares a common benefit from a private road shall contribute in proportion to the amount of the private road utilized to the cost of maintaining the private road at the current level of improvement,” and shall have the right to bring a civil action to enforce the contribution requirement. § 2735(b). This contribution requirement does not apply (a) where there is a written maintenance agreement applicable to the private road, (b) to access roads established by the Commonwealth or by a municipality for a property that would otherwise be landlocked as a result of the exercise of eminent domain (as set forth in 26 Pa.C.S. § 204(b)(9)) or (c) to private roads within a common interest ownership community under Title 68 of the Pennsylvania Code (relating to real and personal property). 36 Pa.C.S. § 2735(c). The PRA was further amended to define “municipality” as “a county, city, borough, incorporated town or township.” 36 Pa.C.S. § 2739.

With the PRA amendment, Pennsylvania now has a minimum statutory maintenance agreement in place that should be sufficient to satisfy lender requirements where a property using a private road does not have an existing written maintenance agreement. Property owners may still choose to create their own written agreements with neighboring property owners on a private road.

Practical Considerations

Pennsylvania practitioners should note that the lender requirement of a written road maintenance agreement no longer imposes a closing barrier. Rather than tracking down neighboring owners to sign an agreement before closing, the property owner can rely on the basic maintenance obligations contained in the PRA.

Although easing closing requirements is the primary and intended effect of the PRA amendment, Pennsylvania real estate practitioners should also be aware of a secondary effect. A prior draft of the bill exempted from the contribution requirement property owners who do not use the private road as the primary access to their property. With this exception stricken from the final bill, the legislature has signaled its intention that all property owners along a private road should be responsible for its maintenance, regardless of their actual use, or lack thereof, of the road. Notably, there appears to be a discrepancy in Section 2735 between subsection (a), which states that a private road shall be “kept in repair by and at the expense of the property owner at whose request the private road was granted and laid out” and subsection (b), which provides that each property owner sharing a common benefit from the private road shall contribute to the maintenance costs. Ultimately, practitioners with clients who intend to purchase property on private roads should be prepared to advise their clients as to the maintenance responsibility (in the absence of written agreements otherwise), even if the property is accessible by a public thoroughfare and the clients do not intend to use the private road.