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Maine Alliance for Road Associations

Need definitive answer about power to collect without signed agreement

  • 28 Jul 2024 12:46 PM
    Message # 13387317

    I've searched the boards for a definitive answer to this without luck, so I suspect it's a legal grey area...but here goes.

    Our association was organized in 2011.  There are 58 assessed properties served by the association-owned road. There is one resident who refuses to pay annual assessments, arguing that they never signed anything and are not required to pay. 

    Our bylaws state:

    "...organized as a statutory non-profit road association pursuant to Title 23, Maine Revised Statutes, sections 3101 to 3104."

    I'm very new to this but my understanding, passed down from the "old timers" on the board, is that we are incorporated as a non-profit because the association owns the road and is required to pay taxes, hold insurance, etc.

    The non-payer's argument is that non-profit incorporated road associations require a signed agreement from participants and have no power to collect from non-signers.

    Can we be a Statutory association under Title 23 sections 3101-3106 while still being incorporated as a non-profit, and thereby retain the authority to collect maintenance fees without a signed agreement?

    Your wisdom and experience will be much appreciated.

  • 29 Jul 2024 12:15 PM
    Reply # 13387710 on 13387317
    Anonymous member (Administrator)

    I am not an attorney but I know that a non-profit corporation road association can also become a statutory road association by adhering to the process of formation and operation set forth in 23 Title §§ 3101 - 3104.  I believe doing so would allow you to assess maintenance fees and enforce collection under §3104, Penalties and Process.  

    Last modified: 29 Jul 2024 12:26 PM | Anonymous member (Administrator)
  • 29 Jul 2024 1:55 PM
    Reply # 13387751 on 13387317
    Anonymous member (Administrator)

    I think the real question here is whether or not your association has complied with the requirements of 23 MRS sections 3101-3104.  Yes, you can be both a statutory and a non-profit at the same time, and if you are, you have all the powers of a statutory association.  So the question is, when your association was formed, did you go through the process required by section 3101?  Did three or more landowners get a Notary to call the first meeting?  And have you followed the rules since then for notifying members of meetings, coming up with a formula for dues assessments, sending out the result of the votes, etc?  If you have, then you should be all set.  But as the attorneys at our annual conference always remind us, if someone tries to sue you (or if you sue them,) their attorney is going to look for any requirement of the law that you may not have followed to the letter, and use that to say that you are therefore not a legitimate statutory road association.

  • 29 Jul 2024 4:27 PM
    Reply # 13387844 on 13387317

    I appreciate the prompt responses.  I found more information about the genesis of the association, and it was actually formed and incorporated in 1996 (not 2011 as I originally stated).   I'm unable to answer the questions you raised at this time, since the documents and history are either lost to the sands of time or in the possession of others.  I will have to consult with some of the early years' board members to see how the formation of the association was accomplished.  Whatever I find out I will document for posterity, and it will most likely lead me back here with more questions and maybe some answers to your questions.

  • 29 Jul 2024 9:08 PM
    Reply # 13387957 on 13387317

    I am curious about the phrase you used 

     we are incorporated as a non-profit because the association owns the road and is required to pay taxes, hold insurance, etc.

    If you "own the road" I am wondering if you researched the registry of deeds to see if there is a covenant, similar to condo's.  In the covenant, it would state the owners responsibilities to pay the association dues. Whereas for private roads, owners "share" the road, would have written in their deed that they need to maintain the right of way... 

    There was in very olden days a voluntary agreement put on people's deeds to maintain the road (which the owner would sign) and it used to be considered an informal method to repair the roads.  If you go to the resource page, under the DEP's forming an association, you'll see Informal Organization by Signed Agreement.

    Welcome to the world of road associations. You on a good start by connecting with MARA. 


  • 30 Jul 2024 11:00 AM
    Reply # 13388175 on 13387317
    Anonymous member (Administrator)

    Good point.  Is there any mention in your deed of either a subdivision plan, or of a "Declaration of Restrictions," or any similar wording?  If so, you should be able to go to the Registry of Deeds website and get copies.  If you read everything they say carefully, one or the other may shed light on what each lot owner is required to do.  (If you don't know how to do such a search, the Registrars will not do the search for you but will show you how to find it yourself.)

    Last modified: 30 Jul 2024 11:03 AM | Anonymous member (Administrator)

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