Section 5: Curative Work and Acceptable Title Insurance Commitment and Title Insurance Policy ExceptionsAnchor: #i1028134
The property owner is responsible for clearing any questions that may exist regarding title to his property so that clear title can be conveyed to TxDOT. ROW PD personnel should also give as much assistance as possible in the interest of good public relations and in order to expedite right of way acquisition.
The property owner may be required to pay the cost of curative work by:
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- direct payment; Anchor: #XXXQNXIP
- distribution of TxDOT's approved compensation on title company's Closing Statement at the time of closing; or Anchor: #XPXAMUPD
- obtaining agreement from the title insurance company to make the payment.
For additional information on the cost of recording curative documents, see Recording of Legal InstrumentsAnchor: #i1028156
Liens, Defects, and Encumbrances
The title insurance commitment and policy must show that the property is free of liens, defects, and encumbrances subject to certain listed exceptions.Anchor: #i1028573
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 ROW PD 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 ROW PD to determine if there are any reciprocal ingress/egress and/or parking easements contained therein. If any are found, partial release must be obtained.
If no restrictive covenants affect the parcel, the title company should omit the section of the commitment and title insurance policy relating to restrictions.Anchor: #i1028609
Generally, there is no objection to acquiring title to land subject to outstanding restrictions. However, restrictions containing reverter provisions could result in loss or derogation of TxDOT's title. Therefore, ROW PD should examine all applicable restrictions for such reverter provisions. If reverter provisions are encountered a release must be obtained to insure that TxDOT's title will not be negatively affected.Anchor: #i1028645
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.Anchor: #i1028681
The tax exceptions acceptable to TxDOT vary depending on whether the acquisition involves a whole or partial taking. See Current Taxes and Past Due or Delinquent Taxes for a discussion of the tax exception allowable in title insurance policies.Anchor: #i1028717
Private easements that are not compatible with highway purposes and operations should be released. Releases should be obtained for all compensable leasehold interests, except for mineral leases described in Minerals Exceptions. 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 Exceptions and Public Utility Easements Exceptions.
In addition, the title company may make an exception regarding “Visible and Apparent Easements Not Appearing of Record.” ROW PD will determine by site inspection of the parcel whether or not there are any visible and apparent unrecorded easements. ROW PD will advise the ROW Program Office 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.Anchor: #i1028753
Public Utility Easements Exceptions
An exception to an easement held by a public utility is acceptable in a title policy. Easements held by public utility owners do not need to be acquired if joint use is compatible and the utility owner joins TxDOT in execution of a joint use agreement. Detail of procedures for public utility easements involving joint use are contained in ROW Utilities Manual.Anchor: #i1028789
Lease and Private Rights Exceptions
TxDOT will not accept an exception showing a lease existing against the parcel acquired, except for mineral leases.
Retention of a private right is permissible if it is determined to be in the best interest of TxDOT and the right retained is compatible with highway use.
Examples of possible compatible use are:
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- stock passes; Anchor: #JFNRCAGA
- private utilities; and Anchor: #HLONWPEO
- irrigation or drainage canals.
Determination of compatibility for each retained private right will be made by ROW PD as a part of the right of way transaction. See Approved Special Clauses for Use in Conveyance Instruments for the special clauses that may be used in instruments of conveyance when retention of a private right is involved.Anchor: #i1028825
Commitments and policies may include an exception to all oil, gas, and sulfur leasehold interests and/or other mineral interests, unless the taking impacts active production or otherwise destroys the ability to access the entirety of the mineral estate. In the list of exceptions in title insurance commitments and policies, standard practice is to list “oil, gas, and sulphur as provided for in the deed to the State of Texas.”Anchor: #i1029074
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 insurance 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.”Anchor: #i1029114
Other Property Interests
The title insurance 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 ROW PD submits information regarding compatibility with highway use.Anchor: #i1029150
Rights of Parties in Possession
An exception regarding "Rights of Parties in Possession" will be acceptable provided that the ROW PD:
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- makes a careful site inspection of the parcel with respect to occupancy; Anchor: #SQWYGEIG
- signs any necessary waiver of inspection required by the title company; and Anchor: #TWEAMUCL
- advises the ROW Program Office that there are no parties in adverse possession of the property when the title insurance 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.