The private road maintenance agreement, explained

If your home is on a private road in Colorado, there’s a good chance the words “private road maintenance agreement” will come up the moment someone tries to buy, sell, or refinance a house on that road. This page explains what a PRMA is, why lenders care about it, what happens at a transaction without one, and how a small road association actually puts one in place. Where a lender rule is involved, we link the actual guideline so you’re reading the source, not a summary. This is general information, not legal advice.

What a PRMA actually is

A private road maintenance agreement (PRMA) is a recorded document among the property owners who share a private road. It answers three questions that otherwise cause fights: who pays for maintenance and repairs and in what share, what happens if someone doesn’t pay, and how long the agreement lasts. A good one is recorded in the county land records so it runs with the land and binds future owners — not just a handshake among today’s neighbors.

That’s the whole idea: turn “we all sort of chip in for the road” into a written, recorded, enforceable arrangement that survives people moving away. (If your “private road” is really just two households sharing one drive, the same logic applies at smaller scale — see our shared driveway agreement guide.)

Why lenders require one

Here’s where it stops being optional. When someone finances a home on a privately owned and maintained street, the lender has to worry about whether the road will actually be kept up — a house you can’t reach is a house they can’t recover their money on. So the big mortgage guidelines require a maintenance agreement.

The clearest example is Fannie Mae. Its Selling Guide, in the section on the site portion of the appraisal (B4-1.3-04, Site Section of the Appraisal Report), states that for a property on a community-owned or privately owned and maintained street, an adequate, legally enforceable agreement or covenant for maintenance of the street is required. The guideline says that agreement should be recorded and should spell out each party’s share of repair costs, the remedies if a party defaults, and a term that in most cases is perpetual and binding on future owners — the same three questions above.

There’s an important exception in the same guideline: if the property is in a state whose statutes already define owners’ responsibilities for maintaining a private street, no separate agreement is required. Colorado does not have that kind of general private-road maintenance statute, so on most Colorado private roads the recorded agreement is the thing that satisfies the requirement. (Fannie Mae also allows a lender to sell the loan without a conforming agreement if the lender indemnifies Fannie Mae for road-related losses — but that’s the lender taking on risk, and many simply won’t. Read the exact language at the source.)

FHA, VA, and Freddie Mac each handle private roads a little differently, and their rules shift over time; the common thread is that a documented, recorded way to keep the road maintained is what makes a private-road property financeable. When one of them raises a question, the fix is almost always documentation.

What happens at sale or refinance without one

This is why the topic surfaces at the worst possible moment. A road can go decades with no written agreement and no problem — until a house on it goes under contract. Then an appraiser or underwriter notices the private road, asks for the maintenance agreement, and there isn’t one. Now the closing is stuck: the buyer’s loan is conditioned on producing a recorded PRMA, and suddenly a group of neighbors who never formalized anything has to draft and record an agreement on a deadline, or the sale falls through and the seller is looking at a much smaller pool of cash-only buyers.

Every property sale on a private road is one of these moments. It’s also, quietly, the best reason for a road association to get organized before a neighbor is mid-transaction.

How associations formalize it

Putting a PRMA in place isn’t exotic. The usual path:

• Get the owners together — everyone whose access depends on the road.
• Agree on the cost split. The three methods that actually get used are equal shares per lot, a share by road frontage, and a share by how far up the road each owner is (per-mile of use). Pick the one that fits and write it down.
• Put it in writing with a lawyer’s help so it’s enforceable and covers payment shares, default remedies, and a perpetual term — the provisions lenders look for.
• Record it in the county land records so it binds future owners, not just the current ones.
• Keep the records the agreement creates — who owes what, who paid, where the road fund went. A recorded PRMA is only as good as the dues records behind it.

Where we fit

That last step is the one that falls apart. An association records a nice agreement and then the dues tracking lives in one volunteer’s spreadsheet until they move away. RoadDues is built for exactly that gap: dues billing and permanent records for private road associations — not HOAs — so that when the next house on your road sells, the association can show clean, current records instead of scrambling. If you’re the treasurer, tell us about your road below. No hard sell; early access just locks the rate and shapes what we build.