PENNDOT Issues New HOP Indemnification Policy

October 2012Articles In the Zone

As part of the Pennsylvania Department of Transportation’s June 2012 Strike-Off Letter addressing Access Approval Procedures, PENDDOT has revised its policies relating to indemnification requirements for Highway Occupancy Permits.

Oftentimes a developer must mitigate traffic impacts resulting from a project by installing an auxiliary land in front of a neighbor’s property. Such auxiliary lanes may include acceleration or deceleration lanes, left turn lanes and center left turn lanes. Because landowners abutting public highways have a constitutional right of access to the public road system, PENNDOT has established a process to balancing those rights with permitted work.

If alternate traffic engineering solutions are not viable, the Department will often require the applicant secure indemnity from the affected property owners for the Commonwealth. Property owners are typically asked to sign release letters; and, in the event property owners refuse, the developer can choose to indemnify the Department.

PENNDOT’s Strike-Off Letter creates a new, streamlined Approval Procedure Worksheet and Letter for use by the HOP applicant with the intent of decreasing costs and time delays for the applicant.

Revisions also include the removal of the “personal guarantee” as a prerequisite to obtaining indemnification as well as a simplification of insurance requirements as they relate to access, drainage and design waivers.

According to the Pennsylvania Builders Association, “these changes are significant for several reasons. First, the potential claimants are limited to the property owners identified [in] … the Indemnification Agreement. This was not the case under the prior arrangements. Second, it allows the builder to fairly and accurately identify the parameters of its potential exposure and make a business decision to proceed with a project or not. Under the prior indemnification it was fairly difficult to calculate the potential financial exposure.”

The changes are effective immediately.