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Take a look at some of the issues surrounding home ownership, including the risks (both financial and material) and the insurances involved.


Shared Property - what's the problem?

NB: A large cappuccino (pudding in a cup) and some banana bread is required for this post.

Having looked at your Title and Diagram, as recommended in the last post; or having driven up and down a long shared driveway for the last fifteen years; it is time to consider the implications and commitments of such an arrangement as Shared Property.

Shared Property (as opposed to Shared Construction – I’ll deal with that in a later post) is an item listed on your title as having more than one owner. More often than not, it refers to a driveway to give properties with no road frontage access to said road. Some of these driveways are huge with up to twenty homes sharing them but more often it may be two, three or four.

The first consideration to ask yourself is have you insured your share of it? I’m yet to come across any affected homeowners who have actively considered this and included their share of the driveway in their home insurance.

If, like everyone else, you haven’t considered your ownership (and thus, legal and financial liability) of the driveway; the first thing you need to determine is the cost to completely rebuild the driveway.

If the driveway is simply gravel on flat land then you won’t have to do much as it isn’t insurable anyway, and you just get around to pouring more gravel onto it as required if it got damaged or needs maintenance.

However, if the driveway has any form of construction and a manmade surface, there are going to be costs involved. Those costs simply get exponentially bigger with steepness, length of driveway and how many homes use it. Retaining walls required to hold back land above or protect the land below can push the cost into the millions. Costs are not just the asphalt or concrete, but the engineering, access, removal of old demolition materials, modern materials and methods and of course…. OSH requirements.

Once you have secured the appropriate insurance cover the next question to ask yourself is whether your co share neighbours have done the same? Probably not until you advise them. This is an excellent time to call a drive meeting – to get to know the neighbours and discuss your commitments to each other, and the drive, in the event of damage or maintenance.

This move, although a bit weird if you don’t know your neighbours, will pay dividends in time of disaster damage.

Seven years of working to get people back in their homes after disaster strikes has shown that if you require neighbours to be part of the solution, then you are instantly in a ‘herding cats’ scenario. Hand on heart, this was probably the most time consuming and frustrating part of trying to get forward movement on getting people back home.

The two standout problems were underinsurance and lack of consensus.


Lack of Consensus

If co-owners haven’t insured their share of the driveway for an appropriate amount, there simply won’t be the funds to rebuild the driveway and there could be considerable reluctance, or inability, on behalf of the underfunded co-owner to raise the shortfall.

We found that co-owners in this situation simply withdrew and became incommunicado. Regardless, progress on reinstatement hit a stalemate and with some driveways needing a complete rebuild, including land stabilization beforehand, many homeowners, reliant on the integrity of the driveway for vehicular access to their homes, ended up lugging their groceries up muddy tracks for years.

On a terribly disturbing note here, we were well aware of people having been paid out very well for their share of the driveway repair – but had instead chosen to buy a new boat or car instead – and when the klaxon call came from other co-owners to get underway and reinstate, the errant co-owner would use an indefensible defence. They would say that the insurance company hadn’t paid out or that the pay out was insignificant. This way, they would stall for years. Pulling the wool over their neighbour’s eyes under the protection of the Privacy Act which doesn’t allow information about an individual to be released to third parties without the written consent (privacy waiver) of the individual.

If you suspect a neighbour of using this ploy, ask them to sign a privacy waiver. If they say no, then there’s your unfortunate answer.

The other frustration on this point is the absentee landlord who doesn’t live on site, probably doesn’t visit and certainly doesn’t want to invest in something that isn’t going to improve his rental or increase his rental income. It was observed frequently, that when landlords were involved in a disaster damage repair, any insurance funds were whipped out from the property and invested elsewhere.

Unfortunately, any time money is required for a group project, you are invariably going to get an equal number of opinions about what should happen as there are stakeholders involved in the project. The same happens with shared driveways.

It is very hard to part people from their money for something they don’t see the full benefit for. Whether it is insurance money after a damaging event or simple maintenance required, getting co-owners to readily pay is not an easy task.

Some may not have the funds, some may not be able to secure a loan, and some may simply not want to contribute.

We all have varying ideas as to what is acceptable as functional. You may have someone who is a bit anal about a split in the asphalt and wants the whole driveway redone. You may have someone who thinks 100ms of broken concrete and pot holes is fine because they can still get their car over it and of course there is every degree of ‘ok’ in between.

The Property Law Act 2007 explains the rights and responsibilities in this area very well and provides solutions. Maybe take a look online and know your rights and responsibilities.

So, if you are looking at a home to buy down a right of way, consider the above first. Once you have weighted up the good and bad then you can decide if it is a good home for you.



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