Chapter 19: Incidental Expenses on Transfer of Real Property
Anchor: #i998982Section 1: General Requirements (for State and LPA)
Anchor: #i998987Requirements for State and LPA
According to 43 TAC 21.71, owners of real property acquired for state purposes are entitled to reimbursement for reasonable, necessary expenses to transfer their property to the state. Reimbursement of the eligible incidental expenses (paid by the owner) is the state's responsibility.
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- Handle this reimbursement as an item that is a part of the relocation assistance program. Anchor: #MLKMICEK
- Federal participation is limited to federal right of way projects. Anchor: #UOLPFWAN
- Expenses of the owner for personal reasons, not necessary for transferring their property to the state, are not eligible for reimbursement. Anchor: #BTNGCMPM
- Expenses are not eligible for reimbursement when those expenses are for litigation (1) to establish title or (2) to establish the right to withdraw an award or judgment.
On TxDOT acquisitions, include information to owners about reimbursement of incidental expenses (to transfer their property to the state) in the Initial Offer Letter. Include similar information in the applicable Memorandum of Agreement (MOA).
If an owner is not satisfied with the determination of reimbursement for an incidental expense (to transfer its property to the state), then that owner may request “further review”. There is no standard form to request further review. The request for further review must be filed with TxDOT within six months after the owner receives written notification of TxDOT's determination of reimbursement for incidental expenses.
If the owner makes a written request for further review, then the written request is subject to review by the Relocation Assistance Review Committee.
If full relief requested by the owner is not granted through the Relocation Assistance Review Committee process, then the owner must be advised of its right to seek “judicial review”.
The acquiring agency must advise the owner of eligible incidental expenses through personal contact or written notification. The written notification must include the following text:
"After the date of payment of the purchase price or the date of deposit in court of funds to satisfy the award of compensation as determined through eminent domain proceedings to acquire real property, you will be reimbursed for any fair and reasonable expenses necessarily incurred in transferring title to the property for use by the Texas Department of Transportation. Expenses eligible for reimbursement may include (1) recording fees, transfer taxes, and similar expenses incidental to conveying the real property to TxDOT and (2) penalty costs for prepayment of any pre-existing recorded mortgage entered into in good faith encumbering the real property. Voluntary unnecessary expenses or expenses incurred in clearing questionable title will not be eligible for reimbursement. Eligible incidental expenses will be reimbursed upon submission of a claim supported by receipted bills or other evidence of actual expenses incurred. You may file a written request for review if you believe that TxDOT failed to properly determine the eligibility for or the amount of incidental expenses to be reimbursed. There is no standard form on which to request review of a claim; however, the claim must be filed with this office within six months after you are notified of TxDOT's determination on any claim for reimbursement."
Anchor: #i999053Additional Requirements (for LPA)
On projects using either state or federal funds, reimbursement of incidental expenses is the responsibility of the LPA.
Anchor: #i999063Recording and Transfer Fees (for State and LPA)
Recording fees, transfer fees, and similar expenses incidental to conveying property to the state are eligible for reimbursement. The following are examples:
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- If the property owner normally has to pay a lending agency for execution of release, resurvey, or preparation of a deed, then these costs are eligible incidental expenses. Anchor: #MMHSQVJC
- If appointment of a guardian is needed in the process of transferring property to the state, then reasonable costs for related legal services are eligible incidental expenses. It should be noted that, normally, the property owner's attorney's fee would not be eligible.
Mortgage Prepayment Penalty (for State and LPA)
Eligible expenses include penalty costs for prepayment of pre-existing mortgage (entered into in good faith encumbering such real property) if the mortgage was on record at the time of closing. TxDOT's transmittal for these billings must state that the mortgage date was checked for eligibility.
Anchor: #BGBEBIDHState Responsibility for Making Payment
When it is known that eligible incidental expenses exist, advise owners of their eligibility and assist them in preparing claim forms.
Before closing a parcel acquisition file, review the file to determine if any unreimbursed incidental expenses exist. If there are any incidental expenses, advise and assist the owner in obtaining reimbursement for these expenses.
For LPA acquisitions, establish communication with the acquiring agency so that TxDOT is informed of any incidental expense. Follow through in determining eligibility and provide assistance to the LPA.
When owners are not interested in reimbursement, make an appropriate written notation for documentation in the parcel files.
Anchor: #i999118Payment Requests
TxDOT and LPA requests for payment must be made using a TxC Payment Request. The following are specific instructions for the TxC Payment Request (see General Payment Policy). Accompany each billing with a supporting form ROW-RM-110 Property Owner’s Claim for Payment of Incidental Expenses of Transfer of Real Property to the State.