I have property in Northern Neck Virginia that has a Deed of Easement Right-of-Way that is filed in the courthouse. There are multiple lots that use that easement and the 1 mile road goes across all lots. All deeds for the multiple lots reference the Deed of Easement Right-of-Way.

This easement addresses road maintenance by specifying that annual yearly dues be placed in a trust account at a bank and said monies should be used to fund the aforesaid easement of right-of-way maintenance and upkeep as it becomes necessary.

I went to pull an An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, and is used to identify a business entity. This led me to the question of are we a HOA or road maintenance fund. A HOA is considered a business under Federal law and you are required to file federal taxes (i.e. Form 1120-H). As a HOA, if monies are carried over at the end of the year you may or may not be required to pay federal taxes. I am talking about a total of $1000 total yearly funds. I could see collecting for a few years and spending them for a one mile shared road.

From a legal perspective, my reading says a deed of easement of right of way is different from a HOA. Our deed of easement of right of way is for a common road that additionally specifies funding of road maintenance collected on a yearly basis.

Lawyers\CPA Questions:

Is this easement with its funding and road maintenance specifications legally the same as a HOA? Therefore, having a board, minute meetings, and particular yearly tax filings.

If you were in my shoes, would you just collect and spend money yearly?

@Hokie CPA
@HokieSith