Most communities around the shoreline of Mississippi Lake are not accessible by township roads. Historically, as larger parcels of land, fronting on township roads were sub-divided to create lakeside communities, single-lane private roads were carved through pastures and woodlots to reach the new lots.  Today, these roads are maintained by their community associations; clearing snow, replacing surface material, grading and clearing brush to create turn-outs and improve sight-lines, in a effort to make them safe for residents, guests and service vehicles.  With roughly two-thirds of the shoreline properties suitable for year-round living, private roads must withstand heavy traffic like propane trucks and occasionally, emergency response vehicles.

In the following table, you will find information relating to the operation of a road association.  When dealing with matters of incorporation, by-laws, property rights, road ownership, collection of road dues and remedies for non-payment, it is always advisable to seek professional legal advice.

 

There are approximately 1,200 residential properties around the shore of Mississippi Lake.  Some properties, like those along the Ninth Line in Beckwith, are accessible directly from a Township road.  Most are accessed by private roads, built specifically to service a lakeside community, which are used by lakeside property owners, their guests, service vehicles and the general public. Usually, the residents of the community are responsible for the maintenance of the road and bear some measure of liability for safe passage.  It is difficult to control who uses the road and in what manner or purpose.

Most private roads have formed an “association” which is responsible for snow clearing and maintenance and collects annual “dues” from the residents to cover costs.  Some communities have defined their associations in writing, setting our rules of conduct on the road, standards for maintenance, signage and brush clearing, giving itself the authority to make budgets and collect dues, conduct meetings and elect officers.  A few are incorporated under the Canada Not for Profit Corporation Act which sets out a standardized organization structure which is recognized by the courts.

In some cases, the owner of the private road is the landowner on the Township road, where the private road begins.  In other communities, the private road may be owned in segments, by the individual property owners; each owning the piece adjacent to their property.  Generally, ownership of the road reflects the way in which the original parcel of land was sub-divided.

Case law in Ontario holds the owner of the road liable for injuries or damages resulting from proven negligence in maintaining the road. In practice, the residents of the community served by the road and their road association take responsibility for road maintenance.  The fact that an individual property owner does not own the road does not provide protection from a suit for damages.  Often, a litigator will sue “all and several”, naming the principal landowner and each of the individual property owners in separate writs.  In this situation, the individual property owner, even though it can be shown that he does not own the road and is not liable for damages, will likely incur legal costs in the process.

Typically, homeowner liability insurance is limited to coverage of $2 million, for incidents occurring on the owner’s property. The individual is unable to purchase insurance for incidents occurring on the private road if he is not the owner of the road.

Many road association report that their most frustrating and disheartening issue is their inability to collect 100% of their annual road dues, in a timely way.  While most residents  pay their annual dues promptly, a few and often the same few, refuse to pay, citing their right to free access, that they are infrequent or absentee owners or, they simply dispute the authority of the association to collect dues.

In Ontario, there is ample case law enforcing payment of road association dues.  If a claim for unpaid dues goes to court, the ruling will invariably favour the road association, based on the principle of “unjust enrichment”; that is, the enjoyment of a benefit, without sharing the cost.  Provided the association has clearly documented policy in its by-laws, followed reasonable steps in giving notice and exhausted other means to collect, the resulting judgement voids all challenges and directs the property owner to pay.  With judgement in hand, the road association must still collect.

This process consumes time and is emotionally draining on voluntary association secretaries and treasurers.  Delinquents often get away with non-payment because the association executive does not have the time or the resolve to pursue the property owner.  In effect, the dues-paying members of the association are subsidizing the delinquent residents.

Associations should set out in their by-laws, the right to levy dues, set deadlines for payment and processes for collection of unpaid dues.  Here is just one example of a process for collection of past-due fees:

Friendly Reminder:  When 30 days past-due: First letter, requesting payment

Second Reminder, in stronger language:  When 60 days past-due: Second letter

When 90 days past-due: Registered letter
Refer to the by-laws and the remedies given to the association for collection.  Be prepared to carry out the prescribed measures without exception

Every member should have a copy of the by-laws.  When everyone knows the rules, it is often easier to carry out the unpleasant steps to collection.

Association by-laws should set out the remedies available for collection of unpaid dues and the point in time when these remedies take effect.  Small Claims Court is one option, using the services of a paralegal.  Once a court judgement is obtained, financial agencies can be engaged to collect on the judgement.

It is always best to collect unpaid dues in a friendly, neighbourly manner.  When this approach fails, the road association with well-documented and publicized policy around dues and collection, will have a better chance of 100% dues collection.

At minimum, every private road association should have a written constitution, approved by a two-thirds majority of the property owners.  The document should set out the following points:

The date of the resolution adopting the constitution
The name of the Association
The dates of the operating year: e.g. January 1 to December 31 or April 1 to March 31
The number and titles of the executive officers: e.g. President, Vice President, Secretary, Treasurer
How the officers are elected and the length of their terms
The objects of the Association: e.g. to maintain their private road in good repair, including snow removal, replacement of surface materials and grading, brush clearing, signage and all other measures deemed necessary by the executive to make passage on the road safe.
The By-Laws of the Association will cover such matters as rules of conduct on the road, relating to speed, giving way, type of vehicle use and other measures required to assure safety.

An example of a constitution and by-laws can be found here: http://www.crik-it.com/lla/LLRABylaws-08102013.pdf 

Directors of private road associations may be liable if they do not take measures to assure safe passage on their road; neglecting maintenance or failing to enact and enforce rules of safe conduct.

Directors’ and Officers’ insurance is available to protect volunteers, working on behalf of an association.  Some association members may feel insurance is an unnecessary additional cost, while others will decline to serve the association in an executive capacity, unwilling to assume personal risk, while volunteering their time on behalf of their neighbors.

The act of incorporation creates an entity, independent of the individuals in the community, which can conduct business, own assets, borrow money and shield itself from liability.

Advantages of an Incorporated Road Association:

Liability is limited to the assets of the corporation
The corporate structure is uniform, under the Canada Not for Profit Corporations Act.

Disadvantages of an Unincorporated Association:

Officers and members are equally liable for actions and negligence
Less recognition by municipalities and the courts

Incorporated or not, every road association should have a written charter and by-laws, hold regular meetings, elect officers, collect association dues in a timely way and conduct itself in a businesslike fashion.

Here are some links with useful information on the constitution and by-laws of road associations:

http://www.corporationcentre.ca/docen/home/faq.asp?id=incnp

http://www.maine.gov/dep/land/watershed/road_assoc_guide_2014%207-24-14.pdf

http://orimatroadassociation.ca/wp-content/uploads/2014/05/OrimatRdAssocConstitution-Bylaws-Regs.pdf

http://www.balsamchutes.com/AGM_agenda_11.pdf

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