342 FW 4, Title Curative and Conveyancing

FWM#:     224 (new)
Date:        October 27, 1995
Series:      Real Property
Part 342:  Realty Operations
Originating Office: Division of Realty

4.1. Purpose. This chapter provides procedures, standards, and requirements for the Service in the preparation of documents conveying title, compilation of title files and title evidence, and curative measures relating to the acquisition of real property.

4.2 Scope. The provisions of this chapter are applicable throughout the Service and apply to all conveyancing documents, title evidence and curative matters relating to real property acquisition whether by direct purchase from the landowner, donation, exchange, etc. Condemnation procedures are covered in 342 FW 6.

4.3 Policy. The Service will prepare all conveyance documents, title evidence, and curative measures in accordance with Department of Justice standards and accepted real estate principles and practices.

4.4 Objectives.

A. Uniformity. Conveyance documents, title evidence and curative matters are prepared and carried out in a uniform manner and in accordance with the standards set by the Department of Justice.

B. Safe Title. The public investment in real property acquisition is adequately protected through the acquisition of a safe title.

4.5 Authorities. The basic authorities applicable to this chapter are listed below:

A. Migratory Bird Conservation Act (16 U.S.C. 715e). (Examination of title; easements and reservations)

B. Act of September 1, 1970, 84 Stat. 835, (40 U.S.C. 255). (Title to land to be purchased by U.S.; acquisition by U.S. of jurisdiction over lands)

4.6 Evidence of Title.

A. Title Standards. Evidence of title acceptable to prudent attorneys and title examiners in which the land is situated is acceptable. The booklet, "Standards for the Preparation of Title Evidence in Land Acquisitions by the United States," has been published by the Department of Justice, Land and Natural Resources Division, for the guidance of Government departments and agencies, vendors to the United States, attorneys of the Department of Justice, and others having occasion to prepare or procure evidence of title and related papers in all cases of acquisition of land by the United States by purchase or condemnation (including donation and exchange). These standards supersede all previous rules on the subject. Their observance is required where the titles are to be approved by the Attorney General or his delegate and where the title is acquired by condemnation unless exception is made in unusual circumstances.

B. Direct Purchase. It is the duty of the heads of the acquiring agencies to furnish necessary evidence of title to land to be acquired by direct purchase, exchange, or donation. The expense of procuring the same will be paid out of the appropriations made for the respective departments (40 U.S.C. 255, as amended).

C. Condemnation Proceedings. Generally, the necessary evidence of title is made available to the Department of Justice by the acquiring agency. In compliance with applicable standards, title evidence conforming to the requirements of the Department of Justice should be obtained from approved abstracters or title companies. Contracts for title evidence should include as a separate item the costs of any necessary continuation of the evidence of title. (Condemnation procedures are covered in 342 FW 6).

D. Delay of Payment. Title evidence must be obtained promptly to avoid delaying payment to landowners and to permit early consummation of purchases and closing of condemnation proceedings.

E. Types of Evidence. One of the following types of evidence should be obtained after considering local practice, reliability, security, economy, efficiency, and speed. Generally the Department of Justice and the Regional or Field Solicitors prefer title insurance since it saves review time. Also, title insurance companies usually give better service when title insurance is used. The following is a list of types of title evidence that are ordinarily obtained.

(1) Abstracts of title prepared in accordance with the requirements of these instructions, by approved abstracters, or by qualified and competent abstracters employed by a department or agency of the Government.

(2) Certificate of title (see Exhibit 1) prepared by approved title corporations in jurisdictions where corporations may legally issue such certificates.

(3) Owners' duplicate certificates of title issued pursuant to satisfactory State systems of title registration similar to Torrens Land Court, Title Registration, etc., systems.

(4) Copies of public title records duly authenticated by their official custodian or certified by an approved abstracter.

(5) Title insurance policies (American Land Title Association (ALTA) U.S. Policy 9/28/91) - (see Exhibit 2) prepared, in accordance with the requirements set forth in the above referenced standards, by approved insurance corporations.

(6) Other satisfactory forms of evidence of title approved by the Department of Justice.

F. Ordinarily, one abstract, certificate, or other evidence of title policy must be obtained for all interests in each contiguous area of land being acquired from the same ownership. Lands are deemed to be contiguous although portions thereof are separated by roads, railroads, or other rights-of-way, streams, etc. Where oil, gas, or mineral interests are not to be acquired, all leases and other instruments relating to such land may be omitted from the title evidence pursuant to the purchase contracts.

4.7 Qualifications of Abstracters and Title Companies.

A. Approvals. All title evidence must be obtained from attorneys, abstracters, or title companies approved by the Department of Justice or the authorized department or agency for the preparation of such evidence in the jurisdiction in which the lands are situated. To obtain approval, submit information on experience and training; organization and title plant of any title corporation; system of examining and abstracting title; financial responsibility (if a corporation); reputation in the community; and assurance that they have complied with statutory bonding and other requirements.

B. Individual Abstracters. Individual abstracters must be attorneys at law or professional or official abstracters qualified and authorized by law to prepare and certify to abstracts; have no interest in the land to be acquired; and not be related to the vendors.

C. Title Company. The title company must be qualified and authorized by law to furnish abstracts of certificates of title, or title insurance policies in the State where the land lies; and have either its home office or a well-established branch office or agent located in the State where the land lies.

4.8 Form and Contents of Abstracts. In some sections of the country, and in many of the large cities, abstracts are prepared by an incorporated title company or by a professional or official abstracter, not necessarily an attorney. In other sections of the country, the abstracts are prepared by an attorney who also obtains curative data and frequently supplements the abstract with a history of the title and his opinion as to its sufficiency. The following requirements are, therefore, subject to modification to adapt them to the type of abstract commonly in use in the locality where the land is situated:

A. Form and Arrangement. The abstract should be printed or typewritten (or consist of photostatic copies of original documents), and the description of the land covered by the abstract should appear on a caption page. Where the descriptions in abstracted items are the same as those contained in the captions, or in preceding instruments, the descriptions should not be recopied, but the abstracters should indicate that the same lands are involved. The various entries should be numbered and appear in the chronological sequence of recording. Affidavits and other papers submitted by the abstracter with the abstract should be numbered or lettered and referred to by the same number or letter as the related item in the abstract.

B. General Contents.

(1) The abstract should contain a sufficient summary of the material portions of every recorded instrument affecting the title to the land described in the caption to enable the examiner to determine the nature and effect of such instruments. No attempt is made to specify all items which must be shown in the abstract, but the following, which are sometimes omitted, must be shown exactly as they appear in the records: the marital status of all grantors and grantees; the consideration and receipt thereof; the dates of execution, witnesses where necessary, acknowledgment, and recordation of each instrument; the due date of any unsatisfied mortgages or deeds of trust, and the amount of the indebtedness secured thereby; and any reservations, limitations, or conditions. Releases of homestead, dower, and other statutory rights should be affirmatively shown. Where titles to separate parcels are derived from a common preceding chain of title, a master abstract should be prepared and supplemented by individual abstracts.

(2) Abstracts containing instruments which do not affect the title or do not refer to or mention the land covered by the abstract are not acceptable and the abstracter is not entitled to receive payment for such extraneous material. Also, abstracts which contain illegible photostats of instruments are not acceptable.

C. Period of Search. For the purposes of this paragraph, "title instrument" means any recorded instrument purporting to evidence the transfer of a fee simple title (other than as security for debt), including patents, direct deeds of conveyance, deeds by trustees, referees, guardians, executors, administrators, masters, or sheriffs, wills or decrees of descent, and also decrees, judgments or orders of courts of competent jurisdiction purporting to quiet, confirm, or establish title in fee simple. The "period of search," referred to in each of the numbered subparagraphs hereinafter set out, means the number of years of continuous coverage by an abstract of the record beginning with a title instrument recorded at least the required minimum number of years prior to the date of the abstracter's certificate. Regardless of the applicable period of search, all abstracts must contain or be accompanied by proof that the title was originally divested from the sovereign by patent or grant of the land involved. All mineral or other reservations to the sovereign shall be specifically noted. All instruments antedating the applicable period of search which are disclosed by instruments recorded within the period of search and whose reservations, exceptions, restrictions, limitations, or other rights or interests impose conditions or liens possibly outstanding or affecting the title, must be shown. Subject to all the foregoing provisions of this paragraph, the periods of search shall be as follows:

(1) A minimum of 60 years for all acquisitions (including easements) except those mentioned in the following subparagraphs (2), (3), (4), and (5).

(2) A minimum of 80 years for all tracts to be acquired for consideration in excess of $100,000 and as to Federal building sites.

(3) A minimum of 40 years for lands of small value.

(4) A minimum of 25 years for easements purchased for more than $100 but not in excess of $5,000 as follows: for telephone and telegraph lines, electric transmission lines, channel excavation, relocation of utilities such as fire alarm systems, water mains and pipes, pipelines, railroad spurs for temporary use in transporting materials for construction purposes, access and other roads, highways, spoil disposal, intermittent flowage (where the estimated frequency of flooding is not more often than 5 years), borrow pits, and other uses of the general character and type of those herein specified.

(5) For easements being acquired for considerations of $100 or less and for temporary use or term takings in condemnation proceedings involving the payment of an estimated rental of $2,500 or less per annum, last owner searches showing the owner under the last deed of record and showing encumbrances against the title under which the abstracters or title companies assume no liability are acceptable as satisfactory title evidence without regard to the period of search.

(6) Abstracts relating to acquisitions of all other easements must be prepared in accordance with the applicable preceding subparagraphs in the same manner as abstracts relating to fee simple titles.

D. Records Lost or Destroyed. Where title records, for the full periods of search required above, have been lost or destroyed, or are otherwise permanently unavailable, the abstract should begin with the first available record and be supplemented by a certificate of the abstracter declaring the loss or destruction of the records; that no reservations, limitations, encumbrances, or defects in the title are known to the abstracter; that the beginning point of the abstract is accepted by competent attorneys in the community; and either:

(1) Proof of compliance with requirements of statutory proceedings, if any, to establish titles affected by the loss or destruction of the records; or

(2) Secondary documentary evidence, complying with statutory requirements, which, if offered in a judicial proceeding, would be admissible as evidence of title, and evidence of title by adverse possession as provided in the instructions set out below under Adverse Possession.

E. Wills and Probate Proceedings.

(1) Reproduce wills in full. Abstracts should show essential portions of probate proceedings disclosing all material facts of record including, for example, the petition, names and ages, and the incompetency, if any, of parties in interest as shown by the record; proof of service of citations; date of approval of bond; issuance of letters testamentary; publication of notices or other action necessary to start the running of any statutes of limitations; ancillary probate of the will in the jurisdiction where the land lies, if the original probate was elsewhere; guardianship proceedings of any parties who are incompetent; and status of estate and inheritance tax payments or releases therefrom.

(2) When title has been or is to be conveyed by administrator's or executor's deed, the abstract must show the court orders or other authority of the fiduciary and sufficient portions of the proceedings to demonstrate their regularity.

(3) If the title has been or is to be conveyed by the devisees, the abstract should show whether all specific legacies, debts, and taxes have been paid, and where necessary whether there has been final distribution of the estate, discharge of the executor, and closing of the estate.

F. Title by Descent.

(1) In every instance where title has passed by descent, the abstract should show whether there has been administration on the estate. If there has, the abstract should show the correct names of all persons determined to be heirs as they appear in the proceeding, and should also show sufficient portions of the record of the proceeding to determine whether necessary jurisdictional facts existed and statutory requirements essential to the validity of the proceeding were observed. This includes service of necessary notices, qualifications of the administrator, and the date of the approval of his bond or other action necessary to start the running of any statutes of limitation.

(2) If there has been administration, but title has been or is to be conveyed by deed of the intestate's heirs as established in the proceeding, the abstract should show the correct names of all persons determined to be heirs as they appear in the proceeding. The abstract should also show whether debts and charges, including all taxes against the estate, have been paid or provided for, and, where necessary, whether there has been final distribution of the estate and discharge of the administrator.

(3) Whether or not there has been administration, if the conveyance to the United States is to be made by the intestate's heirs, and the intestate's heirs have not been established in a judicial proceeding, determination of heirship will be required. (See 4.10 C.)

G. Foreclosure Proceedings.

(1) In all cases involving foreclosure proceedings, the abstract should disclose sufficient facts of the mortgage foreclosed to determine the validity and effect of the foreclosure, including the sum secured, description of the premises, conditions of the mortgage, signatures, dates of execution and recording, and the nature of the default.

(2) If the foreclosure is by judicial proceeding, the abstract should show the names of all persons made parties to the foreclosure case and sufficient portions of the record to determine the jurisdiction of the court, the regularity of the proceeding, whether all necessary parties had proper notice, and adherence to the provisions of the foreclosure statute observed.

(3) If foreclosure is under a power of sale, the terms of the power compliance or noncompliance therewith and with applicable statutory provisions, should appear. The abstract must show partial or installment foreclosures, which, in effect, continue the balance of the mortgage.

H. Sales by Receivers, Execution Sales, Tax Sales, Divorces, and other Judicial Proceedings. The abstract should fully disclose sufficient portions of the record of all sales by receivers, execution sales, tax sales, divorces, and other judicial proceedings affecting the title to the land to be acquired, to determine the legal effect of such sales or proceedings. It should also state whether all statutory requirements have been observed and whether the time for redemption, appeal, or reopening the matter has expired.

I. Sales by Trustees and others in a Fiduciary or Representative Capacity. The abstract should contain all essential parts of trust instruments, powers of attorney, and of the record of any court proceedings conferring authority for conveyances in the chain of title to fiduciaries or persons acting in a representative capacity. It should show whether the purchaser is relieved of the responsibility for the application of the purchase price. It should also clearly set forth any conditions or limitations on the authority of fiduciary or representative, contained in such instruments or proceedings, or in any deed to the trustee, or to the beneficiary or principal for whom such trustee or representative is acting. Where possible, the abstract should show whether such conditions have been fulfilled.

J. Search for Liens of Judgments and Decrees of Federal Courts.

(1) Search the Federal court records in all divisions of the district where the land lies for possible liens of judgments and decrees of cases pending in Federal courts in those States which have not enacted a statute authorizing judgments and decrees of the United States courts to be registered, recorded, docketed, indexed, or otherwise conformed to the rules and requirements relating to judgments and decrees of the courts of the State. (28 U.S.C. 1962.)

(2) In States which have enacted such conformity statutes (in accordance with 28 U.S.C. 1962), no search of the Federal court records is necessary for liens of judgments and decrees, unless under State law judgments and decrees of the State courts become liens on the property of the judgment debtor in the county where rendered, upon entry in the court where rendered. In this case, a search of the Federal court records is necessary if those records are located in the county in which the land is situated.

K. Dedication and Vacation of Streets and Alleys. Where the land includes streets or alley areas, dedicated or vacated, the abstract must show all matters of record affecting the ownership of such areas, including the following:

(1) The complete records and documents relating to such dedication or vacation proceedings.

(2) All facts of record bearing on the existence or elimination of prior rights of the public, prescriptive or otherwise, and rights of public utilities, if any.

L. Special Assessments for Improvements, School Districts, Etc. Abstracts containing references to assessments for drainage, school, or other special improvement districts, water, paving, sewer and other assessments, should set out the total benefit assessments and charges against the land, in addition to the current and delinquent assessments. They should also contain references to the statutes creating the districts and establishing the liens.

M. Abstracter's Certificate. Abstracts must contain a satisfactory certificate of the abstracter. Generally, certificates will be acceptable if they meet three criteria: they are in the form approved by a title association of recognized standing in the State where the land is situated; the abstracter certifies that he has examined all public records pertaining to the title for the required period of search; and the abstractor certifies that all matters of record affecting the title are correctly shown in the abstract. In those States where the liability of the abstracter is based upon the contract to search the title, the certificate should contain a statement that the abstract is furnished to the United States of America (or its grantor) and assigns. Otherwise, and generally, the certificate should not be limited to any contracting party, other person, or corporation.

4.9 Certificates of Title and Title Insurance Policies.

A. Preliminary reports or binders are acceptable as a basis for preliminary opinions if they are satisfactory in form; are from approved title companies; are based upon a preliminary search; and commit such companies to issue final certificates of title or title insurance policies in the approved form. Preliminary opinions contemplate further submission of the matter for final approval of title. (See Exhibits 1 and 2).

(1) The certificate of title, title reports, and binders must disclose the name of each person in whom title to any interest is vested of record or known to the company. If persons other than the fee title owners own the subsurface easements or other interests in the property to be acquired, the present record ownership of each such outstanding estate or interest and all data of record relating thereto or sufficient portions thereof shall be shown in the certificate of title or report, unless the title company has been instructed to omit data relating to such interests. The addresses of all parties having any interest in the lands must be set out where this information is disclosed by the public records or known to the company.

(2) Schedule "B" of the certificate or report must disclose all essential information on matters affecting the title which are set up in the schedule as exceptions or objections to the title. Schedule "B" shall not set forth exceptions or objections in general terms or by reference to deeds, instruments, proceedings or other matters of record, without including copies or a sufficient abstract or digest of the instruments or the proceedings or other matters of record creating or imposing the rights, interests, or encumbrances mentioned in Schedule "B." This will enable an attorney examining the certificate to determine the nature and extent of such matters and their effect on the validity of the title to the land described in Schedule "A." The company must furnish names of the persons holding such interests, if known, in order to obtain releases.

B. Period of Search. In general, certificates of title and title insurance policies based upon a search of all records affecting the title and unqualified as to the period of search are preferred and should be issued. However, certificates of title or title insurance policies for specific types of easements (as defined in the instructions relating to abstracts,) may be limited to the periods of search prescribed in those instructions. This applies if the certificates or policies contain statements to the effect that the title of the sovereign has been divested, and has set forth any reservations which are contained in the patents or grants.

C. Limitation of Liability.

(1) A certificate of title or title insurance policy by one title company for a single acquisition valued at more than 25 percent of the admitted assets (after deducting existing liabilities secured or unsecured and excluding any trust or escrow funds) of the issuing company is not acceptable.

(2) Certificates of title or title insurance policies shall not limit the liability of the title company to a sum less than 50 percent of the reasonable value of the property. As to acquisitions valued at more than $50,000, the limitation of liability of the issuing title company under the certificate of title or title insurance policy may be limited to 50 percent of the first $50,000 and 25 percent of that portion of the value in excess of that amount. Certificates of title and title insurance policies which provide that the United States is required as co-insurer or otherwise to assume any portion of the limited liability are not acceptable.

4.10 Supplemental Information.

A. Plats. The title evidence should include or be accompanied by a plat or plan, based on a survey by a competent surveyor or engineer, sufficient to enable the examining attorney to locate the land described in the title evidence. Any encroachments or rights-of-way, on or over the land, should be shown or noted on the plat. If the land is described by metes and bounds, or by lands of adjoining owners, abutting streets, ways, etc., its boundaries should be defined on the plat by courses, distances, and monuments, natural or otherwise, and by the ownership and contiguous boundaries of adjoining lands and names of abutting streets, ways, etc. When the land is part of a subdivision, a copy of the subdivision plat, or the section thereof in which the land is located, should be submitted if necessary to identify the land with a United States patent or a State grant which is the source of title, a plat of the land being acquired should be superimposed on a copy of the plat of the United States survey or State grant. If the land being acquired is part of a larger tract described in an abstract, it should, when necessary for its identification, be shown drawn to a common scale on a map showing the larger tract and any successive diminishing tracts.

B. Supplemental and Supporting Title Evidence. Failure to supply necessary supporting title data can often delay the closing of a transaction. For example, requirements covering sales by corporations are shown below.

(1) Private Corporations. The title evidence should contain or be accompanied by sufficient portions of the charters or other records of corporations that are conveying interest(s) to the United States in order to determine the power of the corporations to hold and convey real estate and the validity of such conveyances. In jurisdictions where franchise taxes are a lien, or where nonpayment of such taxes or failure to file required reports or statements suspends or terminates a corporation's power to do business or transfer property, the title evidence should also be accompanied by a certificate or statement of the proper State officer showing payment of such taxes and that the corporation is in good standing. A certified copy of the resolution of the proper corporate body authorizing the conveyance to the United States is required. In case of conveyances of all or substantially all of the real estate of such a corporation, a certified copy of a resolution authorizing the conveyance, enacted in compliance with pertinent statutory requirements at a meeting of stockholders, is necessary.

(2) Public Corporations. Where the title evidence discloses a public corporation as grantor in the chain of title, or the vendor to the United States is a public corporation, the title evidence should include or be accompanied by sufficient portions of the charter, resolutions, or other source of authority of each such corporation to convey land, and also with evidence of compliance with all statutory requirements necessary to the transfer of a valid title.

C. Determination of Heirship. When the conveyance to the United States is by the intestate's heirs and there has been no judicial determination of heirship, the fact that the grantors are all the heirs of the deceased must be judicially established where practicable. If such judicial determination is impracticable, proof of heirship must be shown by acceptable affidavits (see Exhibit 3) of the grantors and, if possible, of two or more disinterested reputable persons having knowledge of the facts.

D. Adverse Possession.

(1) Evidence of adverse possession, when required, must include satisfactory affidavits of possession (three required), (see Exhibit 4) which shall contain the following:

(a) Execution by reputable persons living in the vicinity of the land and having no interest in the sale of the property;

(b) Identification of the land and a statement of the character, extent, and duration of possession for at least as long as the maximum local statutory period of limitations, prescriptions, or adverse possession, but not less than 22 years;

(c) All necessary facts fully set out, together with convincing proof of the establishment of title by adverse possession under local law. The affidavits should not contain mere conclusions of the affiants.

(2) In cases where large tracts of land are being acquired which embrace what formerly were smaller tracts, the affidavits of adverse possession must relate specifically to the component parts of such tracts and contain sufficient facts to establish adverse possession to each such part.

(3) Where two or more grants, patents, or transfers affect the same land, the exact location of the land over which the acts of possession are relied upon must be shown on a map and by the affidavits.

(4) Where the acquiring agency does not contemplate acquisition of the land subject to mineral, or other rights or easements of any kind, appearing in the chain of title, such affidavits must show convincing proof of adverse possession against any and all such rights or interests.

E. Unrecorded Title Papers. In all cases, any unrecorded title papers and copies of resolutions, ordinances, and title opinions containing references to statutes or cases in point relating to the condition of the title or objections thereto with respect to such land, which may be available to the vendor, should accompany the title evidence.

F. Certificate of Inspection and Possession. There must be included as a part of the title evidence a Certificate of Inspection showing that an inspection was made of the property subsequent to the date of the recordation of the deed and prior to payment. (See Exhibit 5).

G. Tenant Disclaimer. If all or part of a tract is occupied by a third party, a disclaimer of title should be obtained from said third party except in cases where the occupancy is by virtue of a written lease with the owner, and acquisition is subject to the term of the lease (see Exhibit 6).

H. Regional Director Certificate as to Rights-of-Way and Easements. In cases where outstanding rights-of-way and easements are uncovered by title examination and not referred to in the purchase agreement, the Regional Director should execute a certificate (Exhibit 7) if in his opinion such rights fall within the approval of the Migratory Bird Conservation Commission resolution of June 14, 1938, concerning rights-of-way, easements, and reservation unknown at the time of the approval.

I. Exceptions.

(1) Whenever title is to be acquired subject to exceptions not mentioned in the purchase agreement, a certificate, signed by the Regional Director, should be placed in the file (Exhibit 8). This certificate will state that the exceptions (enumerate these) will not interfere with the contemplated use of the land or diminish the value thereof. If the exceptions are objectional, steps must be taken to remove them.

(2) Whenever the Attorney General or his/her delegate in the preliminary opinion makes reference to easements not of record, if any, an investigation should be made to determine whether there are any such easements. If there are none, the Regional Director's certificate should so state.

4.11 Final and Continuation of Title Evidence.

A. Direct Purchases.

(1) Abstracts must be continued to and include the recordation of the deed to the United States and any necessary curative data.

(2) Final certificates of title or title insurance policies must be based on a search of the records from the dates of the preliminary certificate reports or title policies to the date of the recordation of the deed to the United States. They also must certify or guarantee the title of the United States acquired by the deed.

B. Condemnation Cases. (See also 342 FW 6)

(1) The abstract must be continued to the date of the filing of lis pendens or other notice in the proceedings.

(2) A supplemental certificate of title, or continuation of the preliminary title policy, or an endorsement based on a search of the records to the date of the filing of notice in the condemnation proceeding, must be obtained. A final certificate or policy is not required provided the preliminary certificate or policy does not limit the title company's liability, or the company assumes the required financial liability and the preliminary certificate or policy contains no provision under which the issuing company denies liability for losses if the final certificate or policy is not issued.

4.12 Survey Report.

A. Description. All reports and agreements should include an adequate description of the land to be acquired. It is especially important that the description in the agreement, the survey report, the caption of the abstract or title policy, and the deed to the Government be as nearly alike as possible. If a survey report description is prepared, use it as the basis for the description in the deed of conveyance to the United States. No matter what form of description is used, another requirement is to cite the vendor's source of title, if known, including the recording reference (book, page, and date).

B. Tract Plat. Title evidence should include or be accompanied by a plat or plan based on a survey by a competent surveyor or engineer, sufficient to enable the examining attorney to locate the land described in the title evidence. The plat should show any encroachments or rights-of-way on or over the land.

C. Certificate of Occupancy. Regardless of whether or not a Report of Survey and Description is prepared, title evidence should include a Certificate of Occupancy setting out all visible use and occupancy, present and past of whatever kind, by whom, together with location, period of use and occupancy, and the right under which use was made, if known.

4.13 Preliminary Opinion.

A. Preliminary Review. Request a preliminary review of a proposed acquisition from the Regional Solicitor or Field Solicitor, if authorized, at the earliest possible time after the Service has accepted the agreement for the purchase of lands. The title assembly will contain the following items arranged in the order shown (top to bottom) to simplify examination of the title data:

(1) Copy of draft of deed to the United States.

(2) Copy of letter accepting the agreement.

(3) Copy of agreement.

(4) Report of survey and description.

(5) A certificate that the land described is located wholly within the boundaries of the land described in the caption of the abstract, if the caption includes other land or differs from the purchase agreement or survey description.

(6) Abstract of title, preliminary title certificate, or preliminary binder for title insurance policy.

B. Copies. The Regional or Field Solicitor requires copies of (1), (3), (4), and of the preliminary title certificate or interim binder for the title insurance policy. Assemble these in a binder on top of the file for ease of removal and mark them for the Field Solicitor.

C. Title File. The following three items are made a part of the title file for title opinion on lands being acquired under the Migratory Bird Conservation Act:

(1) Citation of State consent legislation.

(2) Date of Migratory Bird Conservation Commission approval.

(3) Date of a statement of approval by the Governor or appropriate State agency, in accordance with P.L. 87-383.

D. Waterfowl Production Areas. For waterfowl production area acquisitions, only item (3) should be added.

E. Solicitors Regulation 32. Pursuant to Solicitors Regulation 32 of November 6, 1970, each Associate Solicitor, Regional Solicitor and/or the Field Solicitor, has the authority to approve title to lands being acquired for Federal public purposes. This authority is limited to:

(1) The acquisition of land for which title evidence, prepared in compliance with these regulations, consists of a certificate of title, title insurance policy, or an owner's duplicate torrens certificate of title.

(2) The acquisition of lands valued at $100,000 or less for which the title evidence consists of abstracts of title or other types of title evidence prepared in compliance with said regulation.

(3) Within the limits of the authority granted in Solicitors Regulation 32, Regional Directors will request title opinions directly from the Regional or Field Solicitors.

(4) For cases outside the limits of the authority granted in Solicitors Regulation 32, the Regional Director will request title opinions from the Attorney General through the Regional or Field Solicitor.

4.14 Deed Execution. The deed should conform to local statutory requirements and adhere to the following requirements:

A. Warranty Deed. The deed must be a general warranty deed; however, this requirement may be waived, upon a proper showing, for conveyances by States, municipal corporations, and fiduciaries and other persons acting solely in a representative capacity.

B. Grantor Capacity. Disclose the capacity in which any grantor acts who conveys in other than an individual capacity.

C. Grantor. Show the name of the grantor(s) in the body of the deed and the acknowledgment, bear his/her signature (exactly as his/her name appears as grantee in the conveyance), and account for any unavoidable difference by a recital identifying the grantor with the grantee in the preceding conveyance.

D. Marital Status. Disclose the marital status of each grantor.

E. Consideration. Recite the true consideration and the receipt thereof.

F. Conveyance. Convey the land to the "United States of America and its assigns."

G. Description. Contain a proper description of the land, including a citation of the grantor's source of title.

H. Interest Conveyed. Convey all the right, title, and interest of the grantor in and to any alleys, streets, ways, strips, or gores abutting or adjoining the land.

I. Reservations. Contain no reservations or exceptions not approved by the Department or the Service. However, when land is to be conveyed subject to certain rights, such as easements or mineral rights thought to be outstanding in third parties, they must not be excepted from the conveyance, but the deed should be framed to convey all the grantor's right, title, and interest (including geothermal and water rights) subject to outstanding rights, unless the contract or option expressly provides otherwise.

J. Retained Reservations. When a reservation is retained by the grantor in a purchase made under authority of the Migratory Bird Conservation Act, the deed should contain a clause similar to the following: PROVIDING, However, that the use, occupation and operation of the reservation retained herein shall be subordinate to and subject to such rules and regulations as may be prescribed by the Secretary of the Interior governing the use, occupation, protection, and administration of units of the National Wildlife Refuge System under and in compliance with the provisions of Section 6 of the Act of February 18, 1929, (45 Stat. 1222), as amended by Section 301 of the Act of June 15, 1935, (49 Stat. 381). Short term agricultural reservations of less than 1 year should not be included in deeds.

K. Administration. Contain the following statement which should follow the description of the land and in no instance should be included in the granting, habendum, or the warranty provisions of the deed: "The above-described lands are acquired for administration by the Secretary of the Interior through the United States Fish and Wildlife Service."

L. Release of Rights. Release of all rights of homestead, dower, curtesy, and other interests of the grantor's spouse, as required by local law.

M. Signature. Be signed, sealed, attested, and acknowledged by all grantors and their spouses, as required by local law.

N. Corporation Execution. If executed by a corporation, be signed in the full and correct name of the corporation, by its duly authorized officer or officers, sealed with the corporate seal, attested and acknowledged, as required by local law.

O. Attorney in Fact. If executed by an attorney in fact, be signed in the name of the principal by the attorney, properly acknowledged by the attorney as the free act and deed of the principal, and be accompanied by the original or certified copy of the power of attorney and satisfactory proof that the principal was living and the power in force at the time of its exercise.

P. Revenue Stamps. Have affixed sufficient documentary revenue stamps.

4.15 Case Closure - Purchase.

A. Authorization for Payment. Regional Directors are authorized to make payment for the purchase of lands, when:

(1) The Attorney General, Regional Solicitor, or Field Solicitor provides the final title opinion which states that a satisfactory title is vested in the United States or;

(2) The Attorney General, Regional Solicitor, or his Field Solicitor provides a preliminary opinion and states that payment may be made when certain routine requirements have been met. These include:

(a) Payment of all taxes and assessments. (Or provision made for withholding a sufficient sum to assure payment when due).

(b) Determination that there are no unrecorded mechanics' liens or rights of claims or persons in possession.

(c) Execution of certificate as to rights-of-way, easements, and reservations.

(d) Clearance of any other requirements or objections in preliminary opinion.

(e) Signing and recording of deed to United States.

(f) Continuation and certification of the abstract of title, or preliminary title policy to a date subsequent to recordation of the deed, or obtaining of final certificate of title.

(3) Payments will not be made prior to receipt of the final title opinion if the preliminary opinion does not state that payment may be made; there is any doubt as to whether a question of law is involved in the requirements; or there is a question as to whether the requirements and conditions of the preliminary title opinion have been properly satisfied.

B. Preparation of Voucher. Standard Form 1034 provides for payment of the purchase consideration to the grantor. The voucher should show the name and number of the tract, the unit, county and State, the date of deed, recording date, and book and page of recording of the deed (if available), the number of hectares (acres), the price per hectare (acre) and the total consideration.

C. Disposition of Voucher. The Regional Office Realty staff will hold the prepared voucher (together with the two yellow copies of the voucher using Standard Form 1034a which indicates the payees' names) until the final opinion or preliminary opinion stating that payment may be made. Upon receipt of the appropriate title opinion, the Regional Office will complete the voucher by indicating in the accounting classification section of the voucher the contract number, project symbol, appropriation title, and fiscal year the consideration was obligated. The Regional Office will then attach a verified copy of the final opinion or preliminary opinion and make it a part of the voucher. The Senior Realty Officer/Regional Realty Supervisor signs the voucher as approving officer, and transmits it to the Finance Center for processing. The Finance Center sends the check to the Regional Office for distribution.

D. Notice to Grantor. At the time the voucher is forwarded for processing, a letter should be sent to the grantor informing him/her of the favorable title opinion and that the check will be sent to him/her in a few weeks, or will be delivered at a personal closing. Closings can be handled by mail, by personal closing with a Service employee, or with a closing agent hired by the Service. (See 4.15M.)

E. Receipt for Payment. Upon payment, the grantor signs a Receipt for Check in the applicable form (Exhibit 9). If the closing is handled by mail, and the grantor fails to return this receipt within a reasonable time, inquire to ensure the check was delivered and request that the receipt be returned.

F. Completion of Case. When the signed receipt covering the purchase consideration has been received, make the proper entries on the status map, in RPMIS (card records), and mark the files "closed."

G. Obligation of Purchase Funds.

(1) An obligation against an appropriation is created by the act of the Secretary or his/her authorized representative accepting a contract to purchase. An obligation is created in the absence of a contract by the acceptance of a deed conveyance or in judicial proceedings by the request to institute condemnation proceedings.

(2) The Comptroller General in an opinion dated February 18, 1938, addressed to the Secretary of Agriculture, ruled as follows concerning the date of obligation of land purchase funds:

(a) Purchase based on accepted options. The appropriation should be regarded as obligated at the time of the Government's (Service's) acceptance of the option within the option period.

(b) Purchase on deed only. The date of acknowledgment and delivery of a valid deed where the purchase is not based on a contract prior thereto should be regarded as the date of obligating the appropriation.

(c) Purchase through condemnation proceedings. In the absence of a contract or option, the appropriation should be regarded as obligated by the request upon the Attorney General to institute condemnation proceedings rather than by the institution of such proceeding (4 Comp. Gen. 206).

(d) Purchase through condemnation proceedings due to defective title. Where land is under option but defective title prevents satisfactory conveyance, the original obligation established by option acceptance may be allowed to stand and payment for the condemned land may be made from the appropriation available when the option was accepted. Otherwise, you may abandon the obligation established by the accepted option and set up a new obligation at such time as it is decided to request acquisition through condemnation proceedings and make payment from an appropriation available for obligation at that time.

(3) In arbitrary condemnation cases (acquisition recommended by the Service through court action), the amount obligated is the estimated award as approved by the Migratory Bird Conservation Commission, or the Director. The Regional Director's memorandum to the Regional or Field Solicitor recommending condemnation will state the amount of the estimated award.

H. Payment from Funds Covered into the Treasury. If payment of a case is delayed until the funds obligated for its purchase are no longer available for direct disbursement, the voucher must be transmitted to the General Accounting Office for pre-audit. If approved by the General Accounting Office, the claim is certified to the Treasury and is included in a deficiency bill for approval by Congress. This action may cause a delay of several months to a year in making payment for the land.

I. Death of Grantor Prior to Payment.

(1) Should the grantor described in the recorded deed of conveyance to the United States die prior to the payment for the land, payment may be claimed on Standard Form 1055. If letters of administration or letters of testamentary have been granted in connection with the decedent's estate, attach a certified copy of such letters to Standard Form 1055. If no administration of the decedent's estate has been done, attach a copy of the undertaker's satisfied bill or statement to the Standard Form 1055.

(2) If the death of the owner of the land occurs prior to the execution of the deed of conveyance, this requires additional title information and a new title examination.

J. Deduction for Damage. It sometimes happens that between the time a case is optioned and the time it is acquired some of the elements of value are removed or destroyed such as loss of buildings by fire or removal of unreserved timber and buildings. In such instances in accordance with the purchase contract, inform the grantor that the purchase consideration must be reduced to compensate for the loss. Deduct an amount from the purchase price equal to the damage to the real property and state this upon the voucher. This deduction should be shown on the voucher before the grantor signs it. The signature of the grantor will thus indicate his consent to the deduction.

K. Deduction for Tax Liens.

(1) The Attorney General may find title vested in the United States subject to the payment of taxes for one or more years. In some States, the amount of such liens may not be determinable until a future date.

(2) The Regional Office should calculate deductions (generally twice the estimated lien) on the purchase consideration voucher before the Senior Realty Officer/Regional Realty Supervisor approves it. The voucher is then processed in the same manner as vouchers for full payment.

(3) The owner is entitled to reimbursement of the pro rata portion of any prepaid real property taxes which are allocable to the period after the United States obtains title to the property or effective possession of it, whichever is earlier. Whenever feasible, the Service shall pay these costs directly so the owner will not have to pay and then seek reimbursement from the Service. (See 342 FW 7.3 and 49 CFR 24.106). (If taxes are not a lien at the time of recording, no money is to be withheld).

(4) For direct purchases of easements, the Attorney General suggested an alternative closing procedure. That is, titles can be approved subject to the lien of the current taxes so long as the taxes are not due or are payable by installments, without any provision for the payment of such taxes if the purchase price of the easement is not in excess of 50% of the reasonable value of the entire contiguous property of the vendor as determined by the appraisal.

(a) When the consideration to be paid for an easement is more than 50% of the appraised value of the subject tract and the current taxes are not payable, funds should be withheld from the purchase price to pay the taxes when due. The final opinion of title in such cases will report the title subject to such liens and will further state that funds have been withheld from the purchase price to pay the taxes when due.

(b) The final title file should contain a statement (may be on the tax certificate - Exhibit 10) showing that the easement consideration is not in excess of 50% of the appraised value of the tract or showing the amount of funds withheld to pay the current taxes.

L. Action by Region in Tax Lien Deduction Cases. It is the responsibility of the Regional Office to promptly inform the grantor of the action being taken and its necessity. Inform him/her of the reduced amount before the check is received. The grantor should be told that the amount deducted will be paid as soon as he/she furnishes proof that the taxes have been paid. He/she should also be told the date the taxes became a lien. Send a receipt for the check being issued along with the notice to the grantor. Instruct the landowner to sign the receipt when the check is received and to return the receipt to the Regional Office. The Regional Office will process a voucher for payment of the sum deducted when proof of the tax payment is received.

M. Personal Closing.

(1) As a general rule, personal closings are held when there is a need to satisfy a mortgage or other lien out of the purchase consideration. Personal closings are sometimes held to allow for prompt payment of the purchase consideration to the grantor. It is very important to check all pertinent records and ensure that the documents are properly executed and recorded. The person responsible for the closing must be alert for unusual conditions that might affect the conveyance of title. The following items must be checked immediately prior to the closing to make sure they do not affect the title or provision has been made for them.

(a) All taxes and special assessments.

(b) Any Mechanics Liens, or Notice of Intention to File Mechanics Lien, unsatisfied judgments, County Liens, Old Age Assistance, Federal Tax Liens, State Tax Liens, or Notice of Lis Pendens.

(c) Any conveyance of record which has occurred since the date of the preliminary title insurance binder or last certification of the abstract of title. Also, check for documents which have been filed but not recorded.

(d) Check all mortgage satisfactions to make sure that they cover the mortgage of record and that the description of the property involved is correct.

(e) The deed must be dated and signed by the vendors exactly as their names appear on the deed. In addition, the signature of the vendors must be properly acknowledged, and where required, witnessed.

(f) If State transfer tax stamps are required, they must be affixed to the deed and properly canceled.

(g) A Certificate of Inspection and Possession must be completed at the time of closing and prior to payment.

(h) A Tenant Disclaimer (if applicable must also be completed).

(i) A Receipt for Check should also be completed at the closing.

(j) As soon as the closing is completed, the deed, mortgage satisfaction, and other necessary documents should be filed for record immediately.

(2) In a personal closing, it may be desirable to request the local title insurance company representative or abstractor to check the title up to the time of closing, and attend the closing to receive the deed and mortgage cancellation for placement of record. In fact, the involvement of the title company or abstractor is the preferred method.

N. Post Audit. In all cases of direct settlement, the payment is subject to post auditing by the General Accounting Office. This may involve the examination of the title file for those cases where a copy of the Attorney General's final opinion did not accompany the voucher.

4.16 Case Closure - Exchanges FWS - (see 342 FW 5.7).

A. Title Opinion. An exchange deed may be delivered with the approval of the Regional Solicitor, upon receipt of a final title opinion or a preliminary title opinion showing the vesting of a valid title in the United States when certain conditions are met (revised form of the preliminary title opinion.) Care should be taken to ensure that all requirements of the preliminary title opinion have been met before delivery of the Regional Director's deed, including payment of all taxes and assessments.

B. Preparation of Exchange Deed.

(1) Prepare the exchange deed for the Regional Director's signature in the form shown in Exhibit 11. The same care should be taken in drafting this instrument as with other deeds. Clearly state all reservations and exceptions.

(2) In transmitting the title file for a preliminary opinion in the revised form, include a copy of the exchange deed for legal review and approval by the Regional Solicitor or the Attorney General.

C. Execution of Exchange Deed. The Regional Directors have authority to execute deeds in their respective Regions.

D. Certificate of Authenticity. In some States, a foreign acknowledgment (one taken outside the State where the land lies) must have attached to it, as a prerequisite to recording of the deed, a Certificate of Authenticity by a court clerk to the effect that the officer taking the acknowledgment was authorized by law to do so. When the land conveyed by the exchange deed is not in the same State as the Regional Office, such a certificate may be required.

E. Disposition of Exchange Deed. The original exchange deed is delivered to the grantee by a cover letter. A conformed copy of the deed is placed in the case file for each tract involved in the exchange. A conformed copy is also furnished the project manager.

4.17 Case Closure - Exchanges BLM - (see 342 FW 5.7I).

A. Proposals. When an exchange has been firmed up, both the lands to be acquired by the United States and the public lands to be conveyed have been identified, and BLM concurs, it becomes an exchange proposal and may be processed in accordance with regulations in 43 CFR, Part 2200. Although the basic responsibility to process the exchange is in BLM, it is necessary for the Service to provide certain services including appraisals, procurement of title evidence and curative material, title examination through the Regional or Field Solicitor's Office and drafting of documents conveying title to the United States. The National Wildlife Refuge System Administration Act (NWRSAA) or the Federal Land Policy Management Act (FLPMA) may be used as the exchange authority.

B. Publication of Notice of Realty Action.

(1) When the exchange lands have been identified and values are approximately equal, BLM will publish a Notice of Realty Action in the Federal Register, which notice shall describe the offered and selected lands, identifying the owner of the selected lands, and list all reservations to be included in the conveyances to and from the United States.

(2) Also, the published notice will segregate the public lands covered by the notice to the extent that they will not be subject to the public land laws, including the mining laws, for a period of 2 years or until the exchange is completed, if earlier.

(3) In addition, BLM will publish a notice once a week for 3 weeks, after publication in the Federal Register, in a newspaper having general circulation in the area of the lands to be acquired and the lands to be disposed of. The notice shall provide for a comment period of 45 days.

C. Completion of Requirements. The processing of title into the United States will proceed in the same manner as other exchanges. When a final opinion of title is received showing the vesting of a valid title in the United States of the lands being acquired, the case will be furnished to BLM so that they can issue a patent for the selected lands. (When section 206 of FLPMA is used as the exchange authority, refer to 342 FW 5.7I(2)).

4.18 Final Opinion and Completed File.

A. Title File.

(1) The title assembly transmitted to the Attorney General or the Regional or Field Solicitor for final opinion of title should contain the following documents arranged in the order shown.

(a) Copy of preliminary opinion of the Attorney General or Regional Solicitor.

(b) Original executed and recorded deed of conveyance to the United States.

(c) Certificate as to delivery of deed.

(d) Tax certificate.

(e) Certificate of Inspection and Possession.

(f) Certificates and/or affidavits as requested by the Attorney General or Regional/Field Solicitor in his/her preliminary opinion.

(g) Certificate as to rights-of-way, easements, and reservations.

(h) Copy of letter accepting agreement.

(i) Copy of accepted agreement.

(j) Report of survey and description including certificate of occupancy, if separate.

(k) Abstract of title properly certified and showing abstract of conveyance vesting title in the United States, a certificate of title, or a title insurance policy in approved form.

(l) Copy of signed Receipt for Check form or of the letter transmitting the delivery of the check.

(m) Copy of the Contaminant Survey, including appropriate approvals.

(2) A certified copy of the patent, when needed, and any other curative material not made a part of the abstract should be placed between the abstract and the report of survey and description.

(3) The Department of Justice or Solicitor must be sent copies of b, e, and the final certificate of title, or title insurance policy. For convenience, these should be assembled in the binder on top of the permanent file for ease of removal and marked for the Department of Justice or Solicitor.

B. Completed Title File.

(1) When the acquisition has been completed, the permanent title file must include the following in order, as applicable:

(a) Final opinion of the Attorney General or Solicitor.

(b) Report and opinion on water rights, if any.

(c) Receipt for purchase consideration.

(d) Copy of the purchase consideration voucher.

(e) Preliminary opinion of the Attorney General or Regional/Field Solicitor.

(f) Original executed and recorded deed of conveyance to the United States.

(g) Certificate as to delivery of deed.

(h) In exchange cases, a copy of the exchange deed.

(i) Tax certificate.

(j) Certificate of Inspection and Possession.

(k) Certificate or affidavits as requested by the Attorney General or the Regional/Field Solicitor in his/her preliminary opinion.

(l) Certificate as to rights-of-way, easements, and reservations.

(m) Copy of the appraisal report (summarizing the appraised value of the tract acquired).

(n) Copy of letter accepting agreement.

(o) Copy of accepted agreement.

(p) Report of survey and description.

(q) Abstract of title properly certified and showing abstract of conveyance vesting title in the United States, or certificate of title.

(r) Copy of a signed Receipt for Check form or of the letter transmitting the delivery of the check.

(s) Copy of the Contaminants Survey, including appropriate approvals.

(t) Copy of Internal Revenue Service Form W-9 or a report stating the landowner refused to sign, for documentation of the file.

(2) Periodically the completed title file, after all records are posted, should be placed in the closed files of the Region or sent to a Record Center for permanent filing.

4.19 Cemeteries and Burial Grounds. Ordinarily, the existence of private cemeteries or burial grounds does not present a problem unless they are located in an area to be inundated. Every interment is a concession of a privilege which cannot afterward be repudiated and the purchaser's title to the property is fettered with the right of burial.

A. Acquisition. Sometimes lands are acquired by direct purchase and later found to contain small private cemeteries, unknown at the time of the acquisition and not mentioned in the deed of conveyance. If the Service acquires land which contains a burial ground, it may be enjoined from removing the same if such removal goes against the wishes of the relatives or next of kin of those buried. Often it is impossible to determine the names of all of the deceased persons so interred, and for this reason it is impossible to identify the heirs and next of kin.

B. Court Opinion. There is some conflict of opinion among the courts as to the status of private burial grounds established by, or with the consent of, the owner of the land, when the land is subsequently conveyed with no reservation as to the cemetery. It is evident, however, that such burial grounds must be protected unless it is clearly established that they have been abandoned by the person(s) having the right to use them as such.

C. Condemnation. In view of the difficulty in determining all of the interested parties, it is apparent that whenever it becomes necessary to disturb private burial grounds, condemnation proceedings will be essential. In the judgments in such cases, the court will probably recognize the rights of unknown interested parties, and will provide for the removal of all bodies and the reinterment in another location. Whenever the presence of private burial grounds is known and the land is being acquired by judicial proceedings, such facts should be brought to the attention of the court in order that the judgment may take into consideration whatever rights private individuals may have in the cemeteries. (See 342 FW 6 for Condemnation Procedure)

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