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Section 3: Acceptable Title Commitment and Title Policy Exceptions

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Liens, Defects and Encumbrances

The title commitment and policy must show that the property is free of liens, defects, and encumbrances subject to certain listed exceptions. TxDOT will not accept an exception showing a lien against the property conveyed. See Mortgages and Liens.

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Restrictive Covenants

TxDOT will accept an exception showing that certain restrictive covenants exist. However, it will be necessary that every restrictive covenant affecting the property be examined by the title company to determine whether reversionary provisions exist that would produce a loss or derogation of title. In such case, it is essential that the title company be instructed to bring such matters to the attention of the Department so that necessary curative work may be required of the owner. Exceptions to restrictive covenants involving a loss or derogation of title are not permitted. All restrictive covenants should be reviewed by the Department to determine if there are any reciprocal ingress/egress and/or parking easements contained therein. If any are found, partial release must be obtained. See Restrictions and Curative Work.

If no restrictive covenants affect the parcel, the title company should omit the section of the commitment and title policy relating to restrictions.

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Survey Exceptions

TxDOT will accept the standard exception to survey. That exception provides for "any discrepancies, conflicts or shortages in area or boundary lines or any encroachments or protrusions or any overlapping of improvements which a correct survey would show. " Check owners in possession against record title holders and authorized lessees or tenants.

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Tax Exceptions

The tax exceptions acceptable to TxDOT vary depending on whether the acquisition involves a whole or partial taking. See Current and Delinquent Taxes for a discussion of the tax exception allowable in title policies.

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Easement Exceptions

An exception to an easement held by a public utility is acceptable in a title policy. Do not accept any private easement that is not compatible with use of the right of way for highway purposes. Determine compatibility on a case by case basis. In all cases, the commitment and policy must (1) provide the name of the easement holder, (2) provide the recording information of the easement in the real property records, and (3) identify by description the purpose of the easement. See Leases and Private Rights and Public Utility Easements.

In addition, the title company may make an exception regarding "Visible and Apparent Easements Not Appearing of Record." The Department will determine by site inspection of the parcel whether or not there are any visible and apparent unrecorded easements. The Department will advise the ROW Program Office in Austin that there are no visible and apparent unrecorded easements, or provide a list of easements that includes the name of the holder of the easement, if available, and the nature and purpose of the easement.

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Lease Exceptions

TxDOT will not accept an exception showing a lease existing against the parcel acquired, except for mineral leases as detailed in the following subsection "G. " See also Leases and Private Rights.

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Mineral Exceptions

On whole takings, an exception to mineral interests in a commitment or policy is not acceptable. Commitments and policies on partial takings may include an exception to all oil, gas and sulfur leasehold interests and/or other mineral interests. In the list of exceptions in title commitments and policies, standard practice is to list "oil, gas and sulphur as provided for in the deed to the State of Texas." See Minerals.

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Retention of Improvements

If, in the instrument of conveyance the property owner retains title to certain improvements, the standard deed clause therein provides that if the owner does not remove the improvements within the specified time limit, title to such improvements automatically passes to the State of Texas. In such instances, title commitments and policies may include an additional exception according to the following example:

"Property interests and rights reserved by (owner's name) with respect to improvements in deed from (owner's name) to assured. "

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Other Property Interests

The title commitment or policy should not contain exceptions to interests which are not located within the boundaries of the insured area(s) and/or which do not affect TxDOT's parcel. However, these exceptions may be acceptable provided the Department submits information regarding compatibility with highway use.

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Rights of Parties in Possession

An exception regarding "Rights of Parties in Possession" will be acceptable provided that the Department:

  • makes a careful site inspection of the parcel with respect to occupancy;
  • signs any necessary waiver of inspection required by the title company; and
  • advises the ROW Program Office in Austin that there are no parties in adverse possession of the property when the title commitment is submitted.

This exception applies only to one or more persons who are actually physically occupying the property when there are no recorded documents evidencing their claim to the property.

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