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  1. #1
    Join Date
    Apr 2008
    Posts
    16

    Default Bought Home, FHA, "Public" Road Was Really a Private Road

    Located in the state of GA.

    I am interested in finding out the legalities and who would be responsible for this. We purchased a home in a subdivision. In the realtor information, it was noted that the road "will be paved by the end of the year." Two appraisals were done, and the road was noted as "public" and "properly maintained."

    We were told by the seller at closing that the city had put the paving of the road in their budget and that it was definitely getting done.

    Months later, we learn that it is a private road and the city will not take it over or have anything to do with it; it was never a public road. The developer skipped town, and nobody knows who really owns the road. There were green street signs that looked the same as other public city-maintained road signs. Recently, those were taken down and replaced with "private road" signs.

    This has greatly affected the value of our home. There are approx 40 people that access the road. Every time it rains, the road turns to mud and is unpassable, we are unable to go to work or even get out to the main hwy at all. Emergency vehicles won't come here when the road is bad, we do not get garbage pickup or mail when it rains.

    We were given an FHA loan. There is no road maintenance agreement, no HOA. We do have title insurance. I am interested in finding out what we can possibly do about this, if the FHA loan was "fraudulent" since it was passed through FHA as a public road and even as a private road it would have not passed the FHA requirements due to the fact it is not an "all-weather" road. I am interested to know who would be responsible in the case of litigation.

  2. #2
    Join Date
    Apr 2008
    Location
    Texas (Dallas area)
    Posts
    1,404

    Default Re: Bought Home, FHA, "Public" Road Was Really a Private Road

    The FHA issues insurance on home loans against default. The road issue has nothing to do with the FHA.

    Since you are in a subdivison the builder had to have a "performance bond" for the road or the project would have never been issued permits.

    You need to contact your planning dept in your area and ask them to foreclose on the bond and finish the road.

    Here is a link to FHA;

    http://www.hud.gov/

  3. #3
    Join Date
    Apr 2008
    Posts
    16

    Default Re: Bought Home, FHA, "Public" Road Was Really a Private Road

    Thank you for the information. We have checked with the city, and they never had a bond for the road. They are definitely at fault for that, but they refuse to take over the road and say they have no responsibility. There definitely seems like there is a few things that they are not telling about. The county says that if it was theirs, the road would have been paved by now. Any way to have the road de-annexed? I don't know what other ideas are out there.

    It is odd to me that nobody knows who actually owns the road, and even the city claims they cannot figure it out. The city uses the road, as they own a public well house on the road. The subdivision was annexed into the city.

  4. #4
    Join Date
    Apr 2008
    Location
    Texas (Dallas area)
    Posts
    1,404

    Default Re: Bought Home, FHA, "Public" Road Was Really a Private Road

    Quote Quoting metallic36
    View Post
    Thank you for the information. We have checked with the city, and they never had a bond for the road. They are definitely at fault for that, but they refuse to take over the road and say they have no responsibility. Not enough people in here want a HOA or a road maintenance agreement.

    It is odd to me that nobody knows who actually owns the road, and even the city claims they cannot figure it out. The city uses the road, as they own a public well house on the road. The subdivision was annexed into the city.
    You paid for title insurance. Part of what they insure is the "road access". You need to bring your title insurance policy to real estate attorney and see if he can file a claim or sue the title company for the money to complete the road.

    You can read the policy yourself and see if it "excludes the road". However, I doubt it does or your lender would have never have funded the loan.

  5. #5
    Join Date
    Apr 2008
    Posts
    16

    Default Re: Bought Home, FHA, "Public" Road Was Really a Private Road

    Thanks for that info. I checked, and it covers road access, but does not cover the physical condition of the road or the fact that it is a private road.. we have easements and I guess since they saw that, it's considered that we do have "access" even if it is only possibly for 4x4 vehicles to go in and out.

    I have thought that the responsibility would be on the appraisers, both put that it was a public road, but then they could have only looked at the green street signs and assumed that. I figured they could have and should have verified that it was indeed a public road. I am trying to think of different things that would get them out of being sued (how they would defend themselves), the fact that the street signs were green. It's strange that the green signs have been posted for the last 6 years and then the city just last month decides to change them to the blue signs that say "private road" on them.

    If the lender knew that the road was private, we would have never gotten the loan and we really shouldn't have gotten the loan because the appraisals falsely represented the road. I contacted FHA and they told me how to file a complaint against the appraisers, but I have no idea if that would benefit me at all.

    Where else should I look for proof in public records that would tell me that the road is private? I know we were given the due diligence period before the closing on the house, and I never thought to check on the road since everyone was saying it was public. I am still wondering about if the seller would be liable, since it was in writing that the "road will be paved by end of year".

  6. #6
    Join Date
    Apr 2008
    Location
    Texas (Dallas area)
    Posts
    1,404

    Default Re: Bought Home, FHA, "Public" Road Was Really a Private Road

    Since you tried all means possible to come a finish and you have not been able to. It is time to hire a local real estate attorney to read all of your papers and decide who to sue if anyone.

    You do not have a simple fix here and since your problem is very involved, I do not see how you can get a proper answer on a forum.

  7. #7
    Join Date
    Apr 2008
    Posts
    16

    Default Re: Bought Home, FHA, "Public" Road Was Really a Private Road

    I agree, thank you.

  8. #8
    Join Date
    Oct 2007
    Location
    Ohio
    Posts
    2,576

    Default Re: Bought Home, FHA, "Public" Road Was Really a Private Road

    I would recommend that you find the plat for your subdivision as it will probably have an answer for you. Streets are usually dedicated for public use solely by the plat. There will be a dedication to public use statement, and there will be a bunch of approval signatures from all of the public entities involved. It is highly unlikely that your subdivision came into existence without these signature approvals. If the city accepted the street dedication, the streets are public whether the city improved them or not.

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