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Section 11: Exchange of Surplus Right of Way (Drainage or Channel Easement) with Underlying Fee Owner(s)

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Overview

If the department receives a proposal to realign an existing drainage or channel easement, then the department will review the request to determine whether the existing easement can be declared surplus and exchanged for a new easement.

The department will follow the initial procedures outlined in Section 3, Initial Procedures for all Dispositions, and the Department Submission Requirements in Section 4. The department needs to verify that the state owns an easement that can be exchanged for a new easement. In addition to the procedures in Section 3, the department will need to complete these steps for the acquisition portion of the exchange:

  • order a title commitment for the new easement
  • complete any title curative needed for the new easement
  • review the proposed description of the new easement area and determine if any portion of the new easement overlaps the existing easement. If any portion of the existing easement is included in the area of the new easement, this portion must be excluded from the legal description since it is not surplus for state highway purposes.
  • have the new easement appraised and the value approved
  • prepare an easement instrument from the appropriate parties conveying the new easement to the state and have the instrument executed.

If the underlying fee owner(s) request one, an exchange agreement can be prepared. Please contact the ROW program office in Austin for assistance with exchange agreements.

After the values of the surplus easement and the new easement have been approved, two situations can occur:

  • If the surplus easement is worth more than the new easement, then the underlying fee owner(s) will owe the state the cash difference. Occasionally an escrow agreement will be required to outline the responsibility of each party to this arrangement. Contact the ROW program office in Austin for guidance about escrow agreements.
  • If the new easement is worth more than the surplus easement, then the value of the surplus right of way reduces the amount of money that the state owes the underlying fee owner(s) for the new easement. Typically, a donation is required since the transaction is for the benefit of the underlying fee owner(s), and a donation agreement, Form ROW-N-143, will be needed.

The department will coordinate preparation of the donation agreement with the ROW program office in Austin. When the underlying fee owner(s) sign the deed conveying the new easement to the state, they can also sign the donation agreement. The Director of the ROW program office in Austin will sign the donation agreement after the Commission passes a minute order accepting the donation.

After the new easement has been signed, the exchange agreement has been signed by the underlying fee owner(s) and the state, and the donation agreement, if required, has been signed by the underlying fee owner(s), the ROW program office in Austin prepares a minute order as discussed in Section 3.

After the Commission passes the minute order approving the exchange and, if applicable, accepting the donation, the ROW program office in Austin will process the instrument releasing the surplus easement to the underlying fee owner(s). After all agreements have been fully executed, originals will be provided to all parties and all conveyance documents will be recorded.

The department contact and the ROW program office in Austin will follow the procedures in Section 13 to update the right of way map(s) showing the exchange of the surplus easement.

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