We are nonprofit corporation. New Hampshire Private Road Alliance advocates for residential private road taxpayers in the state of New Hampshire. Cities and towns across New Hampshire are cutting services leaving residential private roads to be treated differently than residential public roads.
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The State of New Hampshire does not have a Legislative Classification for residential private roads. Residential private road properties are taxed in the same manner as properties located on residential public roads. Private roads are not required to be built to the same specifications as public roads. This results in roads that are less reliable and inherently less safe compared to public roads. This puts private road property owners in a risky position from both a financial and safety standpoint.
Residential private roads do not receive the same level of services as their public road but pay taxes resulting in "double Tax". Property owners on residential private roads pay for all costs associated with their roads including but not limited to plowing, installation and replacement of drainage culverts, plant control, and repaving the road. These are services that cities and towns are required to provide to public road residents and taxpayers in those communities pay for, including private road residents.
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Common Expenses Associated with Private Roads
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Snow maintenances
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Road repair and/or grading equipment
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Guard Rail maintenances
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Sidewalk maintenances
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Community Mailboxes maintenances
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Drainage, ditches and sewers for storm water management
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Underground utility infrastructure like water, sewer, electric, gas
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Fire Emergency water sources, e.g. fire hydrants, water holding tanks and associated maintenance (some developments pay monthly fees for fire hydrants)
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Sewer pumping stations and associated maintenance, EPA MS4 requirements
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Cost of forming a legal road Association
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Liability Insurance for Road and Homeowner Associations
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Capital Reserve Fund for maintenance of capital assets
Some of these private road developments, especially newer ones, have private water and sewer systems that connect to city utilities. The utility rate payers on residential private roads pay the same rates as all of the other subscribers, but they have to pay for maintenance and repair of their utility infrastructure.
The Role of Municipalities
The planning boards of cities and towns, working closely in concert with developers, approve residential private road developments that do not meet the same design and construction standards as residential public roads. After the private road development has been completed by the developer, there is a sequence of events that typically follows.
The Homeowner Association is turned over to the Homeowners near the end of the project. Within a year or two of taking over the Association, the HOA will hire a consulting company to do a “Reserve Study”. That is when the reality hits. They become aware that if they want to do the right thing, they need to start putting away lots of money for maintenance and repairs of their development. Some developers contribute seed money to a Capital Reserve Fund, intended to be used for maintenance of roads, sewer and common lands, but some do not. There is no statute requiring developers to set up Reserve Funds nor is there a requirement for developers to contribute to them.
Next, the Association will call a meeting with City Officials about what it would take to get the City to take over the roads. The City Officials will then tell the Homeowner’s Association one or more of the following:
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The City agreed with the developer that your development would never become a public road, so you are out of luck.
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Your development has sub-standard roads. City plows, garbage trucks etc. may not be able to negotiate your roads, and they will damage your sub-standard roads, and we are not going to put ourselves at risk of liability.
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State Statutes prevent us from using public funds on residential private roads.
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You can bring the roads up to city standards (at your own cost of course), BUT even with that, City Council can reject the application. This might not be true for all City and Towns, but in the City of Dover this is absolutely the case.
Because the municipalities do not have responsibility for these roads, some of them, especially what we call “legacy” residential private roads, have fallen into disrepair. Many of these are dirt roads. The residents cannot afford to pave the roads, so the situation worsens over time. The substandard roads (even the paved ones) are narrower than roads built to city standards, which sets up the risk of emergency vehicles being unable to pass, and a higher risk of accidents. Many of these developments do not have sidewalks, so the potential for a car to strike a pedestrian is higher than it would be if sidewalks were required when the development was built. The lighting is also substandard, making nighttime navigation dangerous. The fact that many of these developments are 55+ communities further exacerbates the problem of safety concerns for private road communities.
Through deliberate policy and practice, municipalities deny private road property owners’ access to the same fundamental services provided to property owners on residential public roads. In addition, municipalities deny private road property owners’ the same level of safety and reliability of comparable public roads. Notwithstanding these inequities, municipalities collect taxes from private road owners at the same rates and in the same manner as they do from public road property owners.
Developer’s maximize land use by clustering homes in these developments which help maximize the developer’s profit and compromise the quality and safety of the roads in those private communities. The municipalities get increased tax revenue without the responsibility and liability associated with taking care of the roads and in some cases utility infrastructure. Everyone wins except the residential private road taxpayers. It’s a practice that NHPVRTA believes should not be allowed to continue.
Common Objections to Our Perspective
There are two (2) common objections to the position of the NHPVRTA. The first one comes from the Assessor’s Offices of municipalities. They claim that the assessment of properties located on residential private roads are discounted proportionately to the lack of services when compared to residential public roads. They claim that buyers of these properties are smart enough to calculate all of the shortcomings of living on one of these roads, and so the private road property owners are therefore compensated for the lack of services.
We disagree. There is no evidence to support the concept that properties located on private roads are down valued for lack of services. In fact, we have a letter from the former Assessor of the City of Dover that supports our belief that this view is incorrect. The Assessor put in writing that “there is no direct correlation between property taxes and the services a property does or does not receive”. In addition, we believe that most of the buyers of these properties, especially in newer developments, do not have a full understanding of what they are buying into, and especially what it means long term. In addition, private road communities that are considered upscale and exclusive will command higher market values than comparable properties located on a public road.
The second objection is “you should have known better” or “you knew what you were getting into”, or “you signed an agreement with the understanding that the municipality would not service your roads, and now you want to rescind the agreement”. The implication is that people fully understand what they are getting into. We believe the vast majority of buyers are going into these transactions in the best case with eyes half-open, not fully realizing what they are signing up to. To the best of our knowledge, there are no uniform requirements issued by the State that provides buyers full disclosure and transparency on the purchase of a home on one of these roads.
In addition, to the best of our knowledge, there are no requirements for Purchase and Sale Agreements or Closing Documents to fully disclose short-term and long-term obligations of the buyer with respect to maintaining the development. There might be a budget document that is signed, but the initial budget is typically much lower than what it will be in a few years after the developer has left the development. In one case the budget has more than doubled in less than 3 years.
Notwithstanding, even if buyers know what they are getting into or if NH required special disclosures – neither of those scenarios changes the fact that residential private road taxpayers are victims of disproportionate taxation, that their roads are not built to municipal standards, and that that they are assuming a disproportionate amount of liability and risk. They are being used by the municipalities to subsidize pubic road maintenance. Not only is this unfair, we believe it is immoral. There are at least two (2) States in the Northeastern United States that have Statutes in place that address our complaint to some extent. We believe the fact that two of the more densely populated States in the Northeast have these statutes validates our basic claims.
Potential Solutions to the Problem
There are so many ways to solve the problem we cannot list them all here; however, we will present broad categories of solutions. NHPVRTA believes the best solution would be for the State to pass legislation that would allow the cities and towns to use public funds to take care of residential private roads. Unfortunately, we have learned that there is case law in NH that is broadly interpreted as prohibiting the State from using public funds for maintenance of private ways. Therefore, this solution would require a successful court challenge before it could be taken seriously.
The second broad category is to allow for tax credits to be issued to residential private road taxpayers under RSA 72. Private road taxpayers would file for a Tax Credit on an annual basis requesting a tax credit for their expenses incurred for road, public sewer and public water system maintenance and replacement (located on their property but connected to municipal utilities). Such a solution would likely have a component to it that would allow municipalities to deny requests for good cause, and an appeal system for the taxpayer to appeal such a denial. This solution would more than likely include a unified schedule of services published by the State on costs for various expenses associated with roads, water, and sewer systems. The states of NJ and MD solved this problem by issuing reimbursements to Associations, so that is yet another potential way to solve this problem.
The third broad category of solutions is to introduce a new Private Road Statute. We believe there should be a moratorium on the construction of sub-standard roads for new residential developments that exceed a specified number of homes. It is a policy and practice that sets up the residential private road taxpayers to subsidize public road maintenance (with no reciprocity), and to reside on roads where safety as well as durability has been compromised. This Statute may also include a mandate for cities and towns to perform as survey of all their private roads as to emergency vehicle readiness. Those roads that are not ready for emergency vehicles would be upgraded to make them ready. The funds would need to come from the State if such legislation was passed.
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New Hampshire Private Road Taxpayers Alliance is working hard to advance the safety of NH roads while seeking fairness and equity for NH Private Road Taxpayers. Strength in numbers.
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