Buyer’s responsibility for loan-related costs

QUESTION:  I represent a seller who owns some property at the end of a private road. The road runs down the edge of a neighbor’s property. That neighbor has granted an access easement to my client and to two other neighbors. For many years, the four property owners have had an informal agreement to share any road maintenance expenses equally. The property went under contract several weeks ago. The buyer’s lender has conditioned approval of a loan on the creation,  execution and recording of a road maintenance agreement. The buyer has asked my client to provide such an agreement. If a lawyer is hired to prepare and record that agreement, who is responsible for the legal fees and related costs?

ANSWER:  Paragraph 8(g) of the standard Offer to Purchase and Contract (Standard Form 2-T) obligates a seller to provide “legal access to a public right of way”. However, that paragraph is silent on the issue of roadway maintenance.

Where several properties are served by a private roadway, the owners of those properties do not have a legal obligation to enter into and record a Roadway Maintenance Agreement (“RMA”). Nevertheless, when a lender is asked to finance the purchase of a property served by a private roadway, that lender may insist on a recorded RMA as a condition to approving a loan. If no PMA exists, the cost of preparing one is analogous to other lender-required costs that are referenced in paragraph 6(c) of Form 2-T. That paragraph clearly states that it is the buyer who is responsible for “all costs with respect to any loan obtained by Buyer, appraisal, title search, title insurance, recording the deed and for preparing and recording of all instruments required to secure the balance of the Purchase Price unpaid at Settlement.”

Here, since it is the buyer’s lender that is requiring the preparation and recording of the RMA, it is the buyer that is responsible for the costs related to that process.