Mon 8/6/2012 1:45 PM
This thread is interesting as being similar to one on the Real Estate Section of the Bar in recent days.
Town planning boards should understand that all new roads in New Hampshire start out as private roads. See RSA 229:1 for the four methods of creating public highways in NH. (i) by statute (a/k/a layout by proper governing body); (ii) road over land owned by town (a discussion for another day); (iii) dedication and acceptance; and (iv) prescriptive use 20 years prior to 1/1/1968. A vast majority of new subdivision roads that become public are through the Dedication and Acceptance process. D&A is a two step process where the developer depicts a road on a subdivision plan that is recorded (the common law regarding D&A reaches back 250 years so this short email is a very simple statement of the concept). The Dedication amounts to the developer stating that they would like the road to become a public highway and is waiving all damages that may be otherwise due from an eminent domain proceeding (again – simplistic explanation). After the road is constructed the developer or the abutting lot owners request that the municipality Accept the road as public.
Interestingly, there is currently no statutory requirement for a municipality to Accept a road after construction, notwithstanding the untested argument that if the developer follows all of the municipal requirements, that the municipality will be estopped from not Accepting the road. For new subdivisions, I counsel all of my developer clients to create a homeowners association, with a detailed recorded Declaration specifying transition dates and maintenance cost obligations, to manage the road during the time before Acceptance, if it happens at all. What has happened during this real estate down turn is that subdivision roads that were constructed to service, say 30 lots, only have 6 or 7 homes built. The towns are looking very carefully at whether it is appropriate to Accept a road with so few homes as the cost to the town to maintain exceeds the tax revenues gained. If the real estate market returns and the road is Accepted, the HOA may simply dissolve, unless there are other common facilities in need of management.
Municipalities should be aware of this interim time period, which could last many years in a prolonged down turn. Municipalities should review their subdivision regulations as they relate to requirements for:
1. Declaration of Covenants and Restrictions that include Homeowners Association creation, including provisions for collection of maintenance fees by the HOA;
2. Subdivision approval conditions that include concomitant recording of the mylar with the signed Declaration;
3. Defined transition dates for the common areas (roads and drainage structures) from the developer to the HOA; and
4. A procedure for follow-up to make sure the documents are finalized and recorded.
These procedures address the period of time between the approval and formal Acceptance of the road, which in many cases is left as a void. The recording of the Declaration also puts the lot buyers on express notice that the road is private until formally Accepted by the town (assuming they read the document).
Note that the Land Sales Full Disclosure Act, aka Attorney General Registration, of larger subdivisions requires these agreements, although, in my experience there are problems with developer follow-through and little State enforcement.
This discussion begs the question as to the constitutionality of zoning and subdivision regulations that require "x feet of frontage on a public road". If a new subdivision road is by definition private until Accepted, does this mean that only land that abuts an existing public highway may be subdivided? This too is a discussion for another day.
Attorney at Law/Licensed Land Surveyor