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Maine Alliance for Road Associations

Starting a new SRA

  • 30 Mar 2024 1:32 PM
    Message # 13336803

    A little back round first.  When we moved here 20 years ago there was a semi functioning LLC.  There are 41 properties on the road. Over the years fewer and fewer people paid.  Several years ago the president of the LLC moved off the road and the association ceased to function. The road is now in very bad shape and winter plowing has been a patchwork at best.

    Several of us are looking at forming a SRA. This seems to be the best way to have people pay their assessment.  I have a couple of questions.

    Has anyone started a SRA without legal assistance?  I have talked to a couple of lawyers and it seems to be cost prohibitive.

    Dose your association have insurance? Quotes I have gotten seem quite high.

    What percentage of people don't pay and have a lien placed against their property?

  • 01 Apr 2024 8:13 AM
    Reply # 13337182 on 13336803

    If your neighborhood group is willing to work together I think you can save some expenses.

    A few years ago the neighborhood we lived in went through the process of forming a statutory road association.  We did it with minimal assistance from an attorney.  We started with the Guide to Forming A Road Association handbook and the template that you can get from the state website.  We also were able to get a copy of bylaws from several other road associations.  A group of 6-8 of people used this as a guide to craft our bylaws.  The bylaws we had reviewed by an attorney who also helped us in drafting the other paperwork for the first association meeting.  We spent less than $500 on attorney fees.  

    The initial mailings and printing cost us about $425 to complete that requirement for the first meeting. We made sure one of the votes at the first meeting was to switch to email notifications for future communications to reduce costs.

    Insurance is expensive and is probably going up.  Insurance costs for that new association of 65 members was around $1400 per year.  We included both Directors and officers along with liability for the association.  Since I don’t live there any more I am not sure of the current costs.

  • 01 Apr 2024 10:25 AM
    Reply # 13337246 on 13336803

    Thank you for your reply.

    I have studied the Guide and thought that we could go the route that you described.  As for insurance the price I got was $1200 so that now seems reasonable from your experience.

    My biggest problem now is getting two others willing to sign their names to the Meeting Warrant.  People are in favor of an association but don't want their name on the Warrant.

  • 01 Apr 2024 11:43 AM
    Reply # 13337299 on 13336803
    Anonymous member (Administrator)

    Our experience was similar in that we had a nonprofit which failed for lack of participation.  At the time we had 35 members, and only a dozen were paying.  With two miles of road, we didn't even have enough funds to pay the plow bill.  So in 2012 we folded the non-profit and started a new Statutory association.  We did it all ourselves, no attorney involved (since we had no funds.)  We just followed the instructions and used the forms available through MARA.  Each year after that, our paying membership increased.  Thanks to several large lots having been further divided, we now have 55 members.  Of those, there are just a couple who have not paid last year's dues, plus two longer term non-payers.  We have only used the Notice of Claim process on members who had not paid in over two years.  Only one of those remains unpaid.  Mostly, when people saw that the road was getting regularly plowed, they were more willing to pay.  As more paid, we were able to mow the roadsides, start addressing adding gravel, grading, etc.  In our annual letter, we let people know what we've accomplished, and we remind them of how important access is to their property value.  (I think that has helped especially to get payments from those who own undeveloped land, who are seldom there to see what is being done.)  As for insurance, our two miles cost us $750 per year through Oberg Insurance in Bridgton.  If people are not willing to have their signatures on the initial warrant, remind them of the alternative - sporadic plowing and further deterioration of the road.

  • 02 Apr 2024 1:53 PM
    Reply # 13337863 on 13336803
    Anonymous member (Administrator)

    My comments support the other earlier postings on your questions.  You and your association can definitely move ahead with forming a Statutory Road Association without the need for (and cost of) legal assistance.  I know because I’ve done that.  I spearheaded our effort about 10 years ago to have our 80 member community become a SRA.  The key point to keep in mind however, is that you must be conscientious and methodical.  All bases must be touched, and in the proper order.  No shortcuts are allowed in moving through the process.

    As for your question on insurance, we were able to secure both general insurance coverage and directors and officers protection through Chalmers Insurance (with several local offices); the policy was underwritten by Patriot Insurance.  The cost for our mile and a half road was about $1500 several years ago when I was more intimately involved in the financial details of our association.  I would not be surprised if the cost has increased (maybe even substantially?) since then.

    On liens, yes, being able to file Notices of Claims (and Notices of Extensions) is a major benefit of obtaining SRA status.  Our association has filed several NOCs over the years.  We’re located in Cumberland County and have found working with the Registry of Deeds on Pearl Street in Portland to be remarkably smooth and efficient.   Again, following the process outlined in the statute is critical.  The cost for lien filing is $22 and, after the claim is paid off, $22 to remove the claim.  This assumes that both the NOC and the discharge document are one page only.  If more pages are needed the cost goes up.  Title companies pay attention to your NOCs on file.  We had one recalcitrant owner that had not paid his dues for about 10 years.  The property sold last summer.  The title company contacted us for the payoff amount and we got our payment – over $5000 including dues, expenses (including the filing fees) and interest on day of closing.  Good luck!! 

  • 04 Apr 2024 10:41 AM
    Reply # 13338814 on 13336803
    Anonymous member (Administrator)

    I agree with the comments about following the statutes to the letter.  The attorneys who speak at the Annual MARA Conference have reminded us repeatedly that the slightest omission in the procedure can give an attorney a reason to pursue a case.  If there are no such omissions, an attorney will be unlikely to want to take on a case against you.  But don't let that scare you off - just read the statutes carefully and follow them, and you'll be fine.

    One resource on the MARA resources page that can be very useful is the Windham Binder (See the last link under paragraph 6 of the Resources.)  Although it was written specifically to assist residents on private roads in the Town of Windham, a great deal of the information it contains applies anywhere.  In particular, the Order of Filling Out Documents, section 3 of the binder, walks you step by step through all the proper filings and the initial meeting.  and if you're unsure of something, Don't hesitate to ask the Forum!  We are fortunate to have several experienced members who contribute answers on a regular basis.

  • 09 Apr 2024 10:01 PM
    Reply # 13341153 on 13336803

    Thank you for the replies.  They have been very helpful.

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