If you`re looking to buy a home in a rural area, you might come across an FHA loan that requires a shared well agreement. This agreement outlines the responsibilities and rights of the homeowners who share a well as their primary source of water.
A shared well agreement is a legally binding document that specifies the responsibilities and rights of each homeowner who shares the well. The FHA requires shared well agreements to protect the interests of everyone involved in the transaction. The purpose of this agreement is to ensure that each homeowner shares the cost and responsibility of maintaining the well.
Here are some key components of a sample FHA shared well agreement:
1. Ownership and Access: The agreement should specify who owns the well and who has access to it. It should also outline the maintenance and repair responsibilities.
2. Cost Sharing: The agreement should specify how the costs of maintenance, repairs, and other expenses related to the well are shared among the homeowners.
3. Water Usage: The agreement should outline the rules for water usage. For example, it might limit the amount of water that can be used for irrigation or prohibit certain activities that could potentially harm the well water.
4. Dispute Resolution: The agreement should specify the process for resolving disputes among the homeowners. This might include mediation or arbitration.
5. Termination: The agreement should outline the process for terminating the agreement and the well-sharing arrangement.
If you`re buying a home with a shared well, it`s important to review the shared well agreement carefully before completing the transaction. Make sure you fully understand your rights and responsibilities as a homeowner who shares a well. If you have any questions or concerns, don`t hesitate to contact a real estate attorney or your lender. They can help you navigate the legal aspects of the agreement and ensure that you`re making an informed decision.