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Section 2: Standard Conveyance Forms

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Procedure

There is one deed form ( ROW-N-14 Deed), designed to be used in all acquisitions, both whole and partial acquisitions, as well as both controlled and non-controlled access highway facilities. Due to access rights being an important and valuable property interest, it is necessary that every deed contain a reference to the extent access is allowed or denied (even for non-controlled access highway facilities). Current law ( Transportation Code, Section 203.003(a)) provides that access may be controlled at specific locations on any designated state highway (even though the specific segment of the highway facility may not itself be designated as a controlled access facility). As many existing non-controlled access highways on the state highway system are improved, entrance and exit ramps may be designed into such older highways, and some access control may be required in the vicinity of such ramps.

Surveys and property descriptions (including plat maps) being prepared for all state highway projects must contain, within the legal descriptions and at the end of the legal description, a reference to whether access is denied or permitted, and where access is denied. A control of access line (coincident with the right of way boundary line) shall be shown on the parcel plat. The deed form references that access is governed by the provisions set out in Exhibit “A” (the parcel’s property description that is attached to the deed). Therefore, no separate reference or provision about access is contained within the body of the deed. The property description exhibit must be reviewed carefully to determine if the access provision, and a statement about access, has been included by the surveyor.

Note: For those situations where older property descriptions are being utilized which do not contain access provisions, or the surveyor has failed to include access provisions (including situations relating to a non-controlled access highway where there is no denial of access associated with a specific parcel), it may be necessary to prepare a generic access clause indicating that access is permitted, which may either be placed below the surveyor’s seal at the bottom of the property description if there is room (as part of Exhibit “A”), or if there is no room and to avoid making any type of alteration to a surveyor’s property description’s final page, the following generic access clause may be placed on a separate page (marked Exhibit “B”) to be placed behind the Exhibit “A” property description and parcel plat:

“ACCESS CLAUSE

Access will be permitted to the highway facility from the remainder of the property lying XXXXX[insert direction, i.e. “north”] of XXXXX [insert highway designation, i.e. U.S. Highway 277].”

In this case, be sure and change the “Exhibit ‘A’” that appears just prior to and just after the “SAVE AND EXCEPT” on page 2 of the deed form, to “Exhibit ‘B’.

Where access is in fact being either fully or partially denied, and if the property description being utilized does not contain any access provisions and/or an access clause immediately following the property description, the ROW Program Office should be contacted for assistance, if necessary, in drafting an appropriate clause that describes where the access is permitted and where it is denied. Depending upon how this is described, this may require a surveyor to prepare such a clause, or possibly that the property description be amended by the original surveyor who prepared the survey.

Standard conveyance and related forms are identified in the following table:

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For State

For LPA

Form Number

Title

X

X

ROW-N-13

Release and Relinquishment of Access Rights, Controlled Access Highway Facility (No land taking, access to and from abutting property waived, released, and relinquished)

X

X

ROW-N-14

Deed (This form is to be used for all state system highways, both controlled and non-controlled access, for donations, and for Special Warranty Deeds.)

-

X

ROW-N-15

Right of Way Easement (for right of way)

X

X

ROW-N-16

Right of Way Lien Release (All lien release situations)

X

X

ROW-N-17

Release of Easement (Use to acquire utility or any other existing easement interest)

X

X

ROW-N-21

Release of Mineral Surface Rights (All existing surface rights released)

X

X

ROW-N-30

Quitclaim Deed (For release of advertising sign interest(s) and other interests where quitclaim is needed to clear title)

X

X

ROW-N-31

Drainage Easement for Highway Purposes

X

X

ROW-N-83

Temporary Easement (For detour and other construction easement purposes)

-

X

ROW-N-85

Subordination of Mineral Lease (Non-Controlled Access Highway Facility)

X

-

ROW-N-88

Subordination of Mineral Lease (Joint use)

X

X

ROW-N-271

Easement for Purpose of Producing and Hauling Materials (Borrow and base material pits)



NOTES

These standard forms have been prepared for conveyance of various property interests to the state. Use all pages of standard forms. Pages from another form should not be combined with the form being used. Each form is separate and stands on its own. Appropriate special clauses, referred to elsewhere in this manual, may be added to the forms as necessary.

Standard state forms are not to be altered for any reason without the written consent of the ROW Program Office. All right of way deeds and forms containing modifications or clauses not contained in this manual must be approved by the ROW Program Office in advance.

If ROW PD assists the owner in performing curative work where interests are conveyed to the owner and not the state, the standard forms may be used as a reference but must be modified accordingly. If the modification represents a substantive change, ROW Program Office pre-approval of the modification must be obtained.

Standard clauses for insertion in the right of way instruments to cover special conditions pertinent to a particular right of way transaction are outlined in Approved Special Clauses for Use in Conveyance Instruments For Conveyance Instruments. It is the state's responsibility to furnish LPAs with accurate property descriptions and proper forms for deeds, easements, and other instruments necessary for acquisition of each parcel. It is the LPA's responsibility to deliver acceptable instruments, which convey valid title to the state.

In closing the transaction, the conveyance instrument should recite the actual cash consideration paid to the property owner. Any breakdown of the total consideration paid, which separates compensation for property acquired from compensation for damages to the owner's remaining property, should not be documented in the deed. However, this breakdown may be documented in a separate agreement or contract of sale, as outlined in Information for Income Tax Purposes for Property Owners (for State) and Information for Income Tax Purposes for Property Owners (for LPA).

The ROW Program Office must approve, in advance, any revision, deletion, or addition to standard state forms necessary for special conditions. Modified instruments, even though acceptable in personal transactions, may not meet state title requirements. If all instrument revisions originate with or receive prior approval from the ROW Program Office, TxDOT will have determined the acceptability of each instrument before its execution and recording, thereby avoiding difficulties at the reimbursement stage. If there is any question concerning the acceptability of a proposed instrument, the instrument must be submitted through TxDOT to the ROW Program Office for review before execution and recordation of the instrument. Any instrument submitted to the ROW Program Office and found to be in error will be returned for correction before reimbursement can be made for the cost of parcel acquisition. When submitting any modified instrument not previously approved by the ROW Program Office, the transmittal must detail the basis and need for such modification to expedite possible approval as a policy exception.

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Special Clause for Reserving Minerals

When an owner is willing to convey to the state but refuses to sign the prescribed deed form conveying all minerals except oil, gas, and sulfur, it will be permissible to substitute the following clause in the deed, which provides for retention of all minerals not necessary for highway construction and maintenance. The use of this special mineral clause is to be limited because its use is essentially a concession to avoid condemnation. No further concession is to be made without prior approval of the ROW Program Office.

“Grantor(s) reserve all of the oil, gas, sulphur and other minerals in and under the Property but waive any and all rights of ingress and egress to the surface of the Property for the purpose of exploring, developing, mining or drilling for the same; provided, however, that operations for exploration or recovery of any such minerals shall be permissible so long as all surface operations in connection therewith are located at a point outside the Property and upon the condition that none of such operations shall be conducted so near the surface of the Property as to interfere with the intended use thereof or in any way interfere with, jeopardize, or endanger the Grantee's facilities or create a hazard to the public users thereof; it being intended, however, that nothing in this reservation shall affect the title and the rights of Grantee to take and use without additional compensation any water, stone, earth, gravel, caliche, iron ore, gravel or any other road building materials upon, in and under the Property for the construction and maintenance of the state highway system of Texas.”

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Use of Correction Deeds

A correction deed may be used for correcting errors in negotiated conveyances previously filed of record, when its use has been determined legally appropriate under Texas Property Code Sections 5.027 - 5.030. ROW legal staff should be consulted on the use and drafting of such deeds.

The following factors should be considered in determination of appropriate use:

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  • The “materiality” of the proposed change. Mistakes of a “nonmaterial” or “clerical” nature, which are further described in Property Code, Section 5.028, are more easily addressed by a correction deed made by any individual with personal knowledge of the facts relevant to the correction of the recorded original instrument of conveyance. Notice of the nonmaterial correction deed must be provided to the original parties, or their heirs, successors, or assigns, if applicable.
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  • “Material changes”, as described in Property Code, Section 5.029, require that both parties to the original transaction, or the parties' heirs, successors, or assigns, as applicable, execute the corrective instrument.

In all instances, obtain prior approval of the ROW Program Office before execution of the correction deed. Following execution, the title company that insured the state's parcel must be afforded the opportunity to examine the deed and to amend its policy. The correction deed is then filed for record and forwarded to the ROW Program Office for permanent filing. Any title insurance policy changes are submitted with the completed instrument.

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Special Warranty Deeds

A full warranty deed is preferable. However, additional text may be added to form ROW-N-14 Deed when the fee owner refuses to sign a full warranty deed, provided that the title company will guarantee title without an exception due to use of this added language. The additional emphasized text below shall be added at the end of the following paragraph, found on the last page of ROW-N-14 Deed:

“GRANTOR, for the Consideration and subject to the Reservations from Conveyance and the Exceptions to Conveyance and Warranty, grants, sells, and conveys to Grantee the Property, together with all and singular the rights and appurtenances thereto in any way belonging, to have and to hold it to Grantee and Grantee's successors and assigns forever. Grantor binds Grantor and Grantor's heirs, successors, and assigns to Warrant and Forever Defend all and singular the Property to Grantee and Grantee's successors and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof by, through, or under Grantor, but not otherwise, except as to the Reservations from Conveyance and the Exceptions to Conveyance and Warranty.”

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Possession and Use Agreement

Possession and Use Agreements (PUAs) with an incentive shall be offered on every parcel, on every project, on a statewide basis.

The forms ROW-N-PUAIC Possession and Use Agreement with Additional Payment of Independent Consideration (or selected pre-approved or pre-approvable alternate provisions from form ROW-N-PUAALT Possession and Use Agreement for Transportation Purposes (alternative)) can reduce delays in the negotiation process, thus allowing TxDOT to provide transportation improvements in a timely manner. This procedure allows partial payment for the parcel once the PUA is signed. The PUA acquires the use of property for transportation purposes prior to completion of a full acquisition or eminent domain process. The PUA is a voluntary and irrevocable agreement transferring the right to use the property to the state before a fee conveyance is made. Use of the PUA allows removal of the parcel from the project letting critical path by providing a conveyance document with monetary consideration that is not a deed.

The “incentive” payment associated with execution of the ROW-N-PUAIC Possession and Use Agreement with Additional Payment of Independent Consideration is an independent market rental consideration paid to the property owner for the value of the advanced timing of possession. The market rental amount will be calculated at 10% of the initial approved value of a parcel with a minimum amount of $3,000 and a maximum amount of $25,000. The incentive percentage was determined based on industry standards for the recommended amount of a typical yearly market rental rate as associated to the total value of a piece of property. This is money the landowner will never have to pay back to TxDOT regardless of the outcome of the litigation.

Along with the market rental payment, the property owner can be paid any portion of the approved appraised value (0-100%) of the parcel as appropriately based on the circumstances of each individual parcel. In determining the amount of the approved value to pay to a landowner, consider any title issues on a parcel and the risk TxDOT may subject itself to double-compensation or interrupted possession based on outstanding title issues.

PUAs are to be recorded in county real property records. Action to complete the acquisition by either negotiated deed or ED must continue to be pursued within the timeline stated in the agreement.

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Memorandum of Agreement (MOA)

Use of an MOA is optional when the transfer of property is simple, and specific notations, arrangements, and agreements are unnecessary to ensure property conveyance. When the transfer is not simple, or special agreements are necessary, an MOA should be used for added special provisions.

A written agreement with the property owner, executed at the conclusion of property acquisition negotiation, is preferred for documentation of all transaction terms. Execution of a written agreement documents the process of payment and transaction closing, and protects TxDOT or the LPA against false claims of non-performance.

When title insurance is obtained, agreements provide that the state's payment warrant for the consideration shown in the deed will be made out jointly to the owners of the property and to the state's closing agent, and that the warrant will be delivered to the state's closing agent. The state recognizes only the underwriter as closing agent. Where the underwriter, by its own election, functions through an authorized representative acting as an agent, the state recognizes this agent only with respect to the underwriter. Any action by this agent must be in the capacity as agent for the underwriter.

When title insurance is not obtained, the property owner must state in the agreement that he accepts disbursement of a portion of the consideration shown in the deed for payment of any outstanding encumbrances. This statement provides that in consideration of the state independently discharging obligations of the encumbrances, as provided for in the releases; for making payment of any required taxes; and for paying the balance to the owner, the obligation shown in the deed and pertinent agreement is completely fulfilled.

In rare instances, the property owner may be willing to negotiate and execute a conveyance instrument but be unwilling to sign an agreement. When this occurs, write a letter to the owner setting forth the complete content normally embodied in the MOA, and advising him that by signing the state warrant he accepts all details of the transaction. One copy of this letter should be submitted with the payment submission.

The five Memorandum of Agreement forms provide the normal method of outlining all terms of a right of way transaction. These forms are used except where any of the Purchase Agreements, form ROW-N-101 Purchase Agreement, form ROW-N-102 Purchase Agreement (for use where Attorney’s Certificate is used In Lieu of Title Insurance); and form ROW-N-103 Purchase Agreement (Subordination of Lessee’s Surface Rights) are used, and are designed for specific needs as follows:

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