Anchor: #i1000626

Section 8: Veterans Land Board Land Under Contract to a Veteran

Anchor: #i1000631

General

Fee title (less oil, gas, and sulfur rights) may be acquired from the Veterans Land Board (VLB) to land which is under contract of sale between the VLB and a veteran. In these cases, the VLB must convey its land interest to the veteran before the veteran can execute a deed to the state. So that the veteran may pay the VLB for its conveyance to him from monies received from TxDOT for his conveyance to TxDOT, arrangements exist between the VLB and TxDOT for the ROW Program Office to simultaneously coordinate the closing of the two separate transactions.

When right of way consists of land from two or more tracts purchased by the VLB, separate conveyance instruments and property descriptions are prepared for each tract. An additional $75 fee is required for each VLB tract under 40 TAC Section 175.17.

Property descriptions in this category vary slightly from those prepared for normal right of way acquisition. The outside tie reference necessary for partial takings must be an established corner of the veteran's property that he holds under Contract of Sale. Also, if discrepancies exist between the previous property description and the one prepared for the new right of way, the new description must reference and include the earlier data as “called” course data. Further, the VLB requires that the new property description furnished by TxDOT and used for the fractional deed to the veteran include the original signature and professional seal of the surveyor, certifying acceptance of the description.

When TxDOT requires an easement, the VLB will not execute a fractional deed to the veteran. In this case, the veteran executes the easement subject to the VLB approval. To meet statutory requirements, the approved easement requires the signature of the Chairman of the VLB.

Anchor: #i1000658

TxDOT Appraisal Procedure

Property required for highway purposes that is owned by the VLB and under contract of sale between the VLB and a veteran will be appraised by TxDOT in the same manner as any other parcel. Breakdown of interests between the veteran and the VLB is not required.

Anchor: #i1000668

Negotiations and Procedure for Fee Title

The VLB's fractional conveyances are made for cash consideration based on the VLB's reappraisal of the veteran's whole property, as affected by the fractional conveyance. There are statutory fees the VLB charges the veteran for processing the fractional conveyance, and the veteran must pay these fees. However, they are reimbursable by TxDOT as incidental expenses. See Incidental Expenses on Transfer of Real Property. All consideration paid to the VLB for land is credited to the veteran's account with the VLB, but the fee charges are not. If the veteran has been in possession of the land three years or less, notify the ROW Program Office in the original submission for parcel processing.

There is no way to predetermine the conditions and charges the VLB will require before making its conveyance to the veteran. Therefore, after a settlement is reached with the veteran, it is necessary to enter into a ROW-N-8 Tentative Memorandum of Agreement for land owned by VLB, with the veteran.

ROW PD submits the Tentative Memorandum of Agreement to the ROW Program Office along with correspondence from the veteran addressed to the VLB, prepared by ROW PD, requesting the fractional conveyance, and requesting the VLB's notification of the conditions and charges for the fractional conveyance. See sample Letter from Veteran to VLB Requesting Severance Approval. Copies of the tentative agreement and correspondence are prepared for the veteran, the VLB, and the ROW Program Office. The submission includes a copy of the property description.

After reviewing the submission, the ROW Program Office forwards the property description, veteran's correspondence, and agreement to the VLB. Upon receiving the veteran's request, the VLB makes an independent appraisal of the veteran's whole property to determine the consideration they will charge for the fractional deed. Then, the VLB notifies the veteran of the required consideration and fees he/she must pay for the conveyance. The VLB also states that a fractional deed will be issued upon receipt of payment. Copies of the VLB's letter are furnished to the ROW Program Office and ROW PD. The veteran should understand that regardless of the outcome of the transaction with TxDOT, the veteran incurs an obligation to pay the VLB the cost of an appraisal.

After ascertaining the consideration and fees required by the VLB, negotiate with the veteran and submit a payment request to the ROW Program Office. The submission and handling of a pay request supported by an attorney's certificate is different from that supported by a title policy commitment, as set out in subsections Memorandum of Agreement (MOA), and Billing Assembly/Submission to the ROW Division/Closing following.

When the veteran executes the MOA, he is requested to sign another letter prepared by the district, requesting final severance. See sample Letter from Veteran to VLB: Final Request for Severance. This letter requests the VLB to execute its fractional conveyance to the veteran in exchange for payment to the VLB per the MOA. It also authorizes the deed to be delivered to the title company if a title policy is to be obtained.

Anchor: #i1000727

Right of Way Deed

The right of way deed is prepared on standard TxDOT deed forms. No reference is made to the VLB since they will have conveyed their right of way interest to the veteran before the TxDOT deed is executed.

Anchor: #CEGIIAFD

Memorandum of Agreement (MOA)

Prepare the MOA in the usual manner and include the following clause:

“It is expressly understood that this agreement is subject to the herein described property being released to you by the VLB by Fractional Deed and/or the approval of your easement to the state signified by the Chairman of the VLB's signature on the easement instrument.”

The MOA should show that the state warrant will be made payable jointly to the grantor and title company. See example of form ROW-N-6 Memorandum of Agreement (for use when Title Insurance is Purchased).

Anchor: #i1000799

Title Policy Commitment

In consideration of the letter from the VLB promising to issue a fractional deed, the title company will be requested to furnish their usual commitment, as set out in Title Policy Commitments. The VLB's interest should be considered a lien against the property that is cleared by delivery of the VLB's deed to the title company.

Anchor: #CEGHDIJG

Billing Assembly/Submission to the ROW Program Office/Closing

The billing assembly is the same as used for other state right of way acquisitions with the addition of the veteran's letter to the VLB. Show only the veteran's name in TxC payee information.

Upon receiving the warrant the title company makes the proper disbursements, including sending separate checks to the VLB for payment of the consideration and fees, as shown in the VLB's letter to the veteran. The VLB issues its fractional deed and easement, if any, to the title company for closing.

Anchor: #i1000831

Negotiations for Right of Way Easements

Following are VLB requirements for easements.

    Anchor: #SQFYECKK
  • The veteran owner of land held under a contract of sale with the VLB may, with the VLB's approval, grant easements for highway purposes. Under procedures established by the VLB, the veteran is required to execute and acknowledge TxDOT's easement forms. If the property is the veteran's homestead, the spouse is to join in executing the easement. In preparing the easement, the veteran and the spouse are grantors. However, a special clause must be inserted in the form that more fully explains the condition of ownership. This clause is to read as follows:

“The land herein described is under Contract of Sale and Purchase to grantor herein who will receive a deed to said land from the Veterans Land Board when all the terms of said Contract have been complied with. Grantors execute this instrument with the approval of the Veterans Land Board in accordance with the regulations of said Board, which approval is signified by the signature hereon of its Chairman.”

    Anchor: #NHYXTYSY
  • The recitation in the form relating to the consideration being paid must be explicit and in detail. A statement of purely nominal consideration is not to be made. All cash consideration paid for the easement must be remitted to the VLB, and such consideration is applied in its entirety to the principal of the veteran's account, with the exception that any cash consideration paid for damages, such as injury to crops, may be retained by the veteran. However, a recitation specifically setting out the amount of this payment and its purpose must be made in the easement form. This must be set out in detail following the parcel property description.
  • Anchor: #OCEIDWFM
  • If the veteran is to be paid any money for labor, materials, or services for moving fences or other structures, this fact must be recited in the form and the money must be deposited with the VLB. The VLB will hold this money in an expense account to be paid back to the veteran when the VLB is satisfied that the veteran has accomplished the necessary work and/or supplied the necessary materials.
  • Anchor: #RDIUXLSU
  • If the veteran is donating the easement, the consideration clause in the form must show the following statement: “This easement is being donated.” In such instances the veteran should explain by letter the benefits to be received from the granting of the easement. Unless the veteran receives some benefit from the donated easement, the VLB will not approve the easement.
  • Anchor: #CRTIQQTF
  • The veteran must pay a fee to the VLB for servicing and filing each easement. Since all money paid for the easement must be paid to the VLB, the veteran must pay this fee out of funds other than those paid by TxDOT for the easement; however, this fee is reimbursable as an incidental expense for transfer of realty. See General Payment Policies and Procedures for State and LPA.
  • Anchor: #CGMFFVMK
  • VLB approval is to be indicated on the easement by the signature of the Chairman of the VLB or Acting Chairman of the VLB, together with the seal of the VLB.
  • Anchor: #LSFCOFBC
  • The standard retention clause used in TxDOT easement forms must be amended to eliminate the provision that the state will acquire title to improvements due to the failure of the seller to remove them within a specified time. This is required by the VLB for easements but is not required if fee title is being conveyed. Exercise caution in permitting retention of improvements when only an easement is being acquired since failure to remove the improvement means that the state cannot remove the improvement, clear title is not obtained, and lengthy and costly litigation may be required to force removal. This is particularly important on LPA acquisition projects when only easements are acquired.

When only a drainage easement is acquired, only one submission is needed. It is not necessary to prepare the Tentative Memorandum of Agreement since it is known beforehand that the VLB requires application of the total consideration paid the veteran to his account, less payment for damages.

If a memorandum of agreement or purchase agreement is used, it must contain the following clause:

"It is expressly understood that this agreement is subject to the herein described drainage easement being approved by the Chairman of the Veterans Land Board as signified by his signature and seal on the drainage easement instrument. "

The agreement must show the total consideration being paid to the VLB, with exceptions for damages as previously noted. Since the VLB requires the whole consideration be paid to the veteran's account, it is necessary in instances where only a drainage easement is acquired that the veteran individually pay VLB any fees for servicing and filing such easement.

TxDOT prepares and requests the veteran to sign a letter to the VLB requesting easement approval. See sample Letter from Veteran to VLB Requesting Severance Approval.

Anchor: #CEGIEFIJ

Billing Submission to the ROW Program Office

Submit the executed easement, as set out in the agreement, title policy commitment, and the veteran's letter of request to the ROW Program Office. A payment request should be entered into TxC.

The ROW Program Office forwards the easement, the agreement, the veteran's letter, and warrant to the VLB. The VLB notifies the veteran and the ROW Program Office that the easement will be approved and delivered upon receipt of the consideration and fee. The title company sends payment for the easement to the VLB in exchange for the approved and executed easement.

If an easement is to be acquired together with a fee parcel, modify the Tentative Memorandum of Agreement to include an easement description in the exhibit attachment, and show the agreed consideration in the space provided. The sample letter accompanies the form ROW-N-8 Tentative Memorandum of Agreement and is modified by deleting the parentheses bracketing the sentences pertaining to easements.

After the VLB has reviewed the proposed easement and the fee parcel, the veteran will be notified of any condition of the VLB's approval of the easement and the amount of the required fee. The Tentative MOA is completed under the preceding Billing Submission to the ROW Program Office.

Anchor: #i1000942

Eminent Domain Proceedings

If negotiations fail, the property is acquired through ED proceedings. Address the letter of final offer to the veteran and submit a copy to the ROW Program Office which will be forwarded to the VLB by Certified Mail Return Receipt Requested.

Previous page  Next page   Title page