Section 8: Veterans Land Board Land Under Contract to a Veteran

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General

At times, fee title, less oil, gas, and sulfur rights, will be acquired in land owned by the Veterans Land Board (VLB) and under contract of sale between the Board and a veteran. In these cases, the Board must convey its land interest to the veteran before the veteran can execute a right of way deed to the State. So that the veteran may pay the Board for its conveyance to him from monies received from TxDOT for his conveyance to TxDOT, arrangements exist between the Board and TxDOT for the ROW Program Office in Austin to simultaneously coordinate the closing of the two transactions.

When a right of way parcel consists of land from two or more tracts purchased by the VLB, separate conveyance instruments and property descriptions are prepared for each tract. An additional $40 statutory fee is required for each VLB tract.

Parcel property descriptions in this category vary slightly from those prepared for normal right of way acquisition. The outside tie reference necessary for partial takings must be an established corner of the veteran's property that he holds under Contract of Sale. Also, if discrepancies exist between the previous property description and the one prepared for the new right of way, the new description must reference and include the earlier data as "called" course data. Further, the Board requires that the new property description furnished by TxDOT and used for the fractional deed to the veteran include the original signature and professional seal of the surveyor, certifying acceptance of the description.

When TxDOT only desires an easement interest, the Board does not execute a fractional deed to the veteran. In this case, the veteran executes the easement subject to the Board's approval. To meet statutory requirements the approved easement must bear the signature of the Chairman of the Board.

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TxDOT Appraisal Procedure

Property required for highway purposes that is owned by the VLB and under contract of sale between the Board and a veteran will be appraised by TxDOT in the same manner as any other parcel. Breakdown of interests between the veteran and the Board is not required.

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Negotiations and Procedure for Fee Title

The Board's fractional conveyances are made for cash consideration based on the Board's reappraisal of the veteran's whole property, as affected by the fractional conveyance. There are statutory fees the Board charges the veteran for processing the fractional conveyance. These include a reappraisal fee of $120 and a fractional deed fee of $80. The veteran must pay these fees. However, they are reimbursable by TxDOT as incidental expenses for transfer of realty. See Incidental Expenses on Transfer of Real Property. All consideration paid to the Board for land is credited to the veteran's account with the Board, but the fee charges are not. If the veteran has been in possession of the land three years or less, notify the ROW Program Office in Austin in the original submission for parcel processing.

There is no way to predetermine the conditions and charges the Board will require before making its conveyance to the veteran. Therefore, after the district reaches a settlement with the veteran, it is necessary to enter into an ROW-N-8 Tentative Memorandum of Agreement for Land Owned By VLB , with the veteran.

The Department submits the Tentative Memorandum of Agreement to the ROW Program Office in Austin along with a letter from the veteran addressed to the Board, prepared by the district, requesting the fractional conveyance, and requesting the Board's notification of the conditions and charges for the fractional conveyance. See sample Letter From Veteran To Requesting Severance Approval. Copies of the tentative agreement and letter are prepared for the veteran, the Board, the Department, and the ROW Program Office. The submission includes two copies of the property description and two sketches showing the land involved.

After reviewing the submission, the ROW Program Office in Austin forwards the property description, sketch, veteran's letter, and agreement to the Board. Upon receiving the veteran's request, the Board makes an independent appraisal of the veteran's whole property to determine the consideration they will charge for the fractional deed. Then, the Board notifies the veteran of the required consideration and fees he must pay for the conveyance. The Board also states that a fractional deed will be issued upon receipt of payment. Copies of the Board's letter are furnished to the ROW Program Office in Austin and the Department. The veteran should understand that regardless of the outcome of the transaction with TxDOT, the veteran incurs an obligation to pay the Board the cost of an appraisal.

After ascertaining the consideration and fees required by the Board, negotiate with the veteran and submit a payment request to the ROW Program Office in Austin. The submission and handling of a pay request supported by an attorney's certificate is different from that supported by a title policy commitment, as set out in subsections Memorandum of Agreement (MOA), Attorney's Certificates, and Billing Assembly/Submission to the ROW Division/Closing following.

When the veteran executes the MOA, he is requested to sign another letter prepared by the district, requesting final severance, in quadruplicate. See sample Letter From Veteran To VLB: Final Request for Severance. This letter requests the Board to execute its fractional conveyance to the veteran in exchange for payment to the Board per the MOA. It also authorizes the deed to be delivered to the ROW Program Office in Austin if an Attorney's Certificate is used, or to the title company if a title policy is obtained.

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Right of Way Deed

The right of way deed is prepared on standard TxDOT deed forms. No reference is made to the Board since they will have conveyed their right of way interest to the veteran before the TxDOT deed is executed.

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Memorandum of Agreement (MOA)

Prepare the MOA in the usual manner and include the following clause:

"It is expressly understood that this agreement is subject to the herein described property being released to you by the VLB by Fractional Deed and/or the approval of your easement to the State signified by the Chairman of the Board's signature on the easement instrument. "

When an Attorney's Certificate is used, the disbursement breakdown on the MOA should show:

  • the consideration payable to the VLB for the fractional deed;
  • the specific fees payable to the Board, as stated in their notice;
  • the fee payable to the County Clerk of the appropriate county for recording the fractional deed;
  • the total consideration for the easement, if any, made payable to the VLB; and
  • the remainder of the original TxDOT approved fee parcel value, payable to the veteran. Make an extra copy of the agreement for the Board's files.

When a title policy commitment is used, the MOA should show that the State warrant will be made payable jointly to the grantor and title company. See example of Form ROW-N-6, Memorandum of Agreement (for use when Title Insurance is Purchased).

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Attorney's Certificates

The general procedure and requirements set out in Attorney's Certificates: Title Examination, Escrow, and Closing are to be followed in preparing certificates with the following exceptions: (1) The first paragraph of Attorney's Certificate "A" is to show that the VLB has fee title in the parcel; (2) both the veteran and the Board are to be listed under "Owner and Claimant;" and (3) the phrase "Purchaser Under Contract of Sale and Purchase with the VLB" is to be inserted, in parentheses, immediately following the veteran's name.

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Title Policy Commitment

In consideration of the letter from the Board promising to issue a fractional deed, the title company will be requested to furnish their usual commitment, as set out in Title Policy Commitments. The Board's interest should be considered a lien against the property that is cleared by delivery of the Board's deed to the title company.

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Billing Assembly/Submission to the ROW Division/Closing

The billing assembly is the same as used for other State right of way acquisitions with the addition of the veteran's letter to the Board. Show only the veteran's name under "Name of Payee" on ROW-A-15, Payment Request.

When an Attorney's Certificate is used, the ROW Program Office in Austin delivers the appropriate warrants to the VLB as payment for the land and statutory fees in exchange for the Board's Fractional Deed and approved easement, if any. At the same time, the ROW Program Office forwards to the district the veteran's warrant, along with the right of way deed from the veteran to TxDOT. The ROW Program Office then forwards the fractional deed and easement to the district for delivery to the veteran. At closing, the fractional deed is to be recorded before recording the right of way deed to TxDOT. The recorded right of way deed must be returned to the ROW Program Office for permanent filing.

When a title policy commitment is used, all State warrants are sent to the Department in the usual manner. Upon receiving the State warrants the title company makes the proper disbursements, including sending separate checks to the Board for payment of the consideration and fees, as shown in the Board's letter to the veteran. The Board issues its fractional deed and easement, if any, to the title company for closing.

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Negotiations for Right of Way Easements

Following are VLB requirements for easements.

  • The veteran owner of land held under a contract of sale with the VLB may, with the Board's approval, grant easements for highway purposes. Under procedures established by the Board, the veteran is required to execute and acknowledge, in duplicate, TxDOT's easement forms. If the property is the veteran's homestead, his spouse is to join in executing the easement. In preparing the easement, the veteran and his spouse are grantors. However, a special clause must be inserted in the form that more fully explains the condition of ownership. This clause is to read as follows:

"The land herein described is under Contract of Sale and Purchase to grantor herein who will receive a deed to said land from the Veterans Land Board when all the terms of said Contract have been complied with. Grantors execute this instrument with the approval of the Veterans Land Board in accordance with the regulations of said Board, which approval is signified by the signature hereon of its Chairman."

  • The recitation in the form relating to the consideration being paid must be explicit and in detail. A statement of purely nominal consideration is not to be made. All cash consideration paid for the easement must be remitted to the Board, and such consideration is applied in its entirety to the principal of the veteran's account, with the exception that any cash consideration paid for damages, such as injury to crops, may be retained by the veteran. However, a recitation specifically setting out the amount of this payment and its purpose must be made in the easement form. This must be set out in detail following the parcel property description.
  • If the veteran is to be paid any money for labor, materials, or services for moving fences or other structures, this fact must be recited in the form and the money must be deposited with the Board. The Board will hold this money in a suspense account to be paid back to the veteran when the Board is satisfied that the veteran has accomplished the necessary work and/or supplied the necessary materials.
  • If the veteran is donating the easement, the consideration clause in the form must show the following statement: "This easement is being donated. " In such instances the veteran should explain by letter the benefits to be received from the granting of the easement. Unless the veteran receives some benefit from the donated easement, the Board will not approve the easement.
  • The veteran must pay a $40 statutory fee to the Board for servicing and filing each easement. Since all money paid for the easement must be paid to the Board, the veteran must pay this fee out of funds other than those paid by TxDOT for the easement; however, this fee is reimbursable as an incidental expense for transfer of realty. See General Payment Policies and Procedures for State and LPA.
  • VLB approval is to be indicated on the easement by the signature of the Chairman or Acting Chairman of the Board, together with the seal of the Board.
  • The standard retention clause used in TxDOT easement forms must be amended to eliminate the provision that the State will acquire title to improvements due to the failure of the seller to remove them within a specified time. This is required by the VLB for easements but is not required if fee title is being conveyed. Exercise caution in permitting retention of improvements when only an easement is being acquired since failure to remove the improvement means that the State can not remove the improvement, clear title is not obtained, and lengthy and costly litigation may be required to force removal. This is particularly important on LPA acquisition projects when only easements are acquired.

When only a drainage easement is acquired, only one submission is needed. It is not necessary to prepare the Tentative Memorandum of Agreement since it is known beforehand that the Board requires application of the total consideration paid the veteran to his account, less payment for damages.

If a memorandum of agreement or purchase agreement is used, it must contain the following clause:

"It is expressly understood that this agreement is subject to the herein described drainage easement being approved by the Chairman of the Veterans Land Board as signified by his signature and seal on the drainage easement instrument. "

The agreement must show the total consideration being paid to the VLB, with exceptions for damages as previously noted. Since the Board requires the whole consideration be paid to the veteran's account, it is necessary in instances where only a drainage easement is acquired that the veteran submit his personal check in the amount of $40 payable to the Board for servicing and filing such easement.

The Department prepares and requests the veteran to sign a letter in quadruplicate to the VLB requesting easement approval. See sample Letter From Veteran To VLB Requesting Severance Approval.

The Attorney's Certificate or title policy commitment is the same as for fee parcels.

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Billing Submission to the ROW Program Office in Austin

Submit the executed easement, in triplicate and prepared as set out in the agreement, the ROW-A-15, Payment Request, the Attorney's Certificate or title policy commitment, and the veteran's letter of request, in duplicate, to the ROW Program Office in Austin.

The ROW Program Office in Austin forwards the easement copies, a copy of the agreement, and the veteran's letter and check to the Board. The Board notifies the veteran and the ROW Program Office that the easement will be approved and delivered upon receipt of the consideration and fee. When an Attorney's Certificate is used, the ROW Program Office exchanges the State's warrant for the approved and executed easement. The easement is forwarded for recording. When a title policy is used, the State's warrants are sent to the Department. The title company sends payment for the easement to the Board in exchange for the approved and executed easement.

If an easement is to be acquired together with a fee parcel, modify the Tentative Memorandum of Agreement to include an easement description in the exhibit attachment, and show the agreed consideration in the space provided. The sample letter accompanies the Form ROW-N-8, Tentative Memorandum of Agreement and is modified by deleting the parentheses bracketing the sentences pertaining to easements.

After the Board has reviewed the proposed easement and the fee parcel, the veteran will be notified of any condition of the Board's approval of the easement and of the amount of the required fee. The Tentative MOA is completed as discussed under the preceding Billing Submission to the ROW Program Office. Closing is as discussed for a fee parcel.

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Eminent Domain Proceedings

If negotiations fail, the property is acquired through ED proceedings. Address the letter of final offer to the veteran and submit three copies to the ROW Program Office in Austin, one of which will be forwarded to the VLB.

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