When two or more parties share a water well, it is essential to have a shared well agreement in place. This agreement outlines the terms and conditions of the well`s usage and maintenance and helps avoid any disputes or disagreements that may arise in the future. If you are a homeowner with a shared well and are planning to sell your property, you should be aware of Freddie Mac`s guidelines regarding shared well agreements.
Freddie Mac is a government-sponsored enterprise that works with mortgage lenders to help homeowners get affordable housing. If you are selling a property that uses a shared well, the buyer`s mortgage lender may require a shared well agreement that meets Freddie Mac`s guidelines. This is because Freddie Mac has strict criteria that must be met to approve a mortgage loan for a property that relies on a shared well.
According to Freddie Mac`s guidelines, a shared well agreement must meet the following requirements:
1. All parties who use the well must sign the agreement.
2. The agreement must include a description of the well`s physical location and condition.
3. The agreement must outline each party`s responsibilities for the maintenance, repairs, and costs associated with the well.
4. The agreement must specify how the parties will handle any disputes that may arise.
5. The agreement must contain a provision that ensures each party has access to the well.
6. The agreement must be recorded with the county or state where the property is located.
It is crucial to note that Freddie Mac does not require a shared well agreement for all properties that use a shared well. If the well is on a neighboring property, for example, and the homeowner has no right of access to the well, Freddie Mac may not require a shared well agreement. However, it is always best to consult with a real estate attorney or your mortgage lender to determine whether a shared well agreement is necessary.
In summary, if you are selling your property and have a shared well, it is essential to have a shared well agreement that meets Freddie Mac`s guidelines. Failure to adhere to these guidelines may result in the buyer`s mortgage loan being denied, which could lead to additional complications in the sale of your property. Therefore, it is wise to consult with a professional who can help guide you through the process of drafting and recording a shared well agreement that meets all of Freddie Mac`s requirements.