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Section 9: Exchange of Right of Way Interests

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Overview

Note: The Right of Way Manual provides guidance for disposition of property interests that are no longer needed for state highway purposes. Unless otherwise stated, procedures outlined below apply to property interests that are no longer needed for state highway purposes.

TxDOT has the authority to exchange an interest in real property no longer needed for another interest in real property needed for a state highway purpose. A GE would not have to be offered the opportunity to buy the right of way, since this transaction involves the exchange of right of way instead of the sale of right of way.

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 fee title in right of way that can be exchanged for new right of way. 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 right of way interest
  • complete any title curative needed for the new right of way interest
  • have the new right of way interest appraised and the value approved
  • prepare an appropriate instrument for the new right of way interest to the state and have the appropriate parties execute it

If the party to the exchange requests 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 right of way no longer needed for a state highway purpose and the new right of way have been approved, two situations can occur:

  • If the right of way no longer needed for a state highway purpose is worth more than the new right of way, then the landowner(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. Please contact the ROW program office in Austin for guidance about escrow agreements.
  • If the new right of way is worth more than the right of way no longer needed for a state highway purpose, then the value of the right of way reduces the amount of money that the state owes the landowner(s) for the new right of way. The state can pay the landowner(s) the cash difference, or the landowner(s) can donate the difference. If the landowner(s) decide to donate the cash difference and the difference is $500 or more, then a modified donation agreement will be needed.

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

After the deed of the new right of way has been signed, the exchange agreement has been signed by the landowner(s) and the state, and the donation agreement, if required, has been signed by the landowner(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 document conveying the right of way no longer needed for a state highway purpose to the landowner(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 11 to update the right of way map(s) showing the exchange of the right of way no longer needed for a state highway purpose.

Occasionally the department will be contacted by coal and lignite mining companies to relocate a portion of an existing road in exchange for the company constructing a new road. This is a special type of exchange that is coordinated with TxDOT’s Office of General Counsel, Contract Services, and the ROW program office in Austin. Contact the ROW program office in Austin for guidance on this type of transaction.

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