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Section 16: Title Requirements, Conflicts, and Exceptions

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General Title Requirements

When an LPA is the acquiring agency for TxDOT on a project and cost participation is requested from TxDOT, title insurance in the amount of the consideration paid for the parcel will be obtained.

When an LPA is the acquiring agency and there is no cost participation by the State, title insurance may be obtained at the sole expense of the LPA, or a statement from the LPA that adequate title has been acquired must be submitted to TxDOT. In this instance, the LPA is responsible for any cost or expense because of any failure of title.

In instances where an LPA pays a consideration for a parcel but decides to relinquish the right to reimbursement because an acceptable title policy or Attorney’s Certificate cannot be obtained, require a written statement from the LPA protecting TxDOT against future liability relative to title questions is required.

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Conflict of Title and Encroaching Improvements

The following procedures for acquiring parcels involving conflicts of title and encroaching improvements will be used, except when the alternative of obtaining quitclaim deeds in lieu of simultaneous closings is applicable. Reimbursement to LPAs for these parcels may be made when quitclaims are not obtained, provided acceptable title to these parcels is furnished the State.

  • Temporary Right of Occupancy. In the acquisition of ROW, the owner or tenant in possession is allowed a temporary period of occupancy if necessary for relocation purposes. For more detailed information, refer to TxDOT’s Right of Way Manual, Volume 2, Chapter 14.

The TxDOT form, ROW-RM-37, Contractual Agreement – Local Government, clearly states the LPA’s responsibility in this regard:

“Upon payment to the property owner of the agreed purchase price, the Local Government is authorized and directed to secure for the State possession of each parcel in accordance with all applicable Federal and State laws governing relocation assistance, notices to vacate and forcible detainer.”

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Policy Regarding Kind of Title to be Acquired

Two types of title to parcels are generally acquired by TxDOT: fee simple and easement. For all parcels included within the limits of the ROW, fee simple title, less oil, gas and sulfur, with no right of exploration on the acquired property, will be acquired. In rare circumstances, a ROW easement may be used in acquiring the ROW. If this type of easement is to be used, make a written request to TxDOT outlining the reasons for acquiring an easement instead of fee simple title. A permanent easement or right to use the surface area will be acquired for parcels which are needed for drainage, lateral support, slopes, or similar purposes. A temporary easement for a specified period of time will be acquired for parcels that are needed for construction purposes.

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Current and Delinquent Taxes

In normal real estate transactions, it is customary for current taxes to be prorated between the buyer and seller, but a different situation occurs in a sale to TxDOT because TxDOT is not obliged to pay State or local tax. In cases of condemnation proceedings, the date of possession on condemned parcels is the date the award amount warrant is deposited in the registry of the court. If no deposit is made before the date the judgment is rendered, the date of the judgment will constitute the date of taking.

In acquiring ROW by negotiation, the LPA must cooperate with all taxing agencies for payment of current taxes on whole takings, on a prorated basis. Prorated taxes will be determined by the taxing agencies. Prorated taxes may be disbursed from the proceeds due the property owner or may be paid prior to closing by the property owner. In partial takings when payment of current taxes is not handled during the closing of the transaction, future settlement of tax liability will be a matter between the taxing agency and the property owner involved.

When whole takings are condemned, the taxing agencies will not be joined, and they will be notified of the proceedings.

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