Attachment_7_-_DOJ_Title_Standards_2016.pdf

Regulations of the Attorney General Governing the Review and Approval of Title for

Federal Land Acquisitions (2016)

U.S. Department of Justice Environment and Natural Resources Division

Land Acquisition Section http://www.justice.gov/enrd

(202) 305-0316

Regulations of the Attorney General Governing the Review and Approval of Title for Federal Land Acquisitions (2016) supersedes all prior title regulations of the Attorney General, including those adopted under Order No. 440-70, dated October 2, 1970, as amended in 1974 and 1990; and Title Standards 2001.

Solicitation 12FPC119Q0008 Attachment 7 http://www.justice.gov/enrd

Statement of the Assistant Attorney General

Environment and Natural Resources Division

Welcome to the new edition of the Regulations of the Attorney General Governing the Review and Approval of Title for Federal Land Acquisitions. Each year, Congress authorizes and funds the acquisition of real property needed to meet the many responsibilities entrusted to the federal government by its citizens, from establishing national parks and wildlife refuges to storing the nation's Strategic Petroleum Reserve and constructing care facilities for military veterans, among many others. The title to every property to be acquired must be examined, cleared of liens and defects, and determined sufficient for the purposes for which the federal government seeks to acquire it before the United States may take ownership.

By statute, responsibility for ensuring that real property titles meet this standard begins with the Attorney General. See 40 U.S.C. § 3111(a). As Assistant Attorney General for the Environment and Natural Resources Division ("ENRD"), I have the honor of overseeing execution of that responsibility. Title reviews are conducted by attorneys in ENRD's Land Acquisition Section, and by counsel for federal departments and agencies to whom the Attorney General's responsibility has been delegated. All are guided by regulations promulgated on behalf of the Attorney General under authority of 40 U.S.C. § 3111(b)(1).

This newest edition of the Attorney General's title regulations replaces all prior title regulations and standards, including those adopted under Order No. 440-70 of the Attorney General, dated October 2, 1970, as amended in 1974 and 1990, and the companion Title Standards 2001. The 2016 edition of the Attorney General's title regulations assembles all Department of Justice title review guidance in one document. It is an essential companion to the Uniform Appraisal Standards for Federal Land Acquisitions (2016), also known as the Yellow Book. Where questions arise or additional guidance is needed, the ENRD Land Acquisition Section should be consulted.

On behalf of the Attorney General, I thank each of the many users of this publication — the attorneys, realty specialists, contracting officers, real estate appraisers and other federal employees entrusted with acquiring real property on behalf of the United States —for your public service.

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Regulations of the Attorney General Governing the Review and Approval of Title for Federal Land Acquisitions

(2016)

Table of Contents

Part 1: Legal Authority for the Review and Approval of Title to Real Property

1.1 The Attorney General’s responsibility; exercise within the Department of Justice

1.2 Delegation of the Attorney General’s responsibility outside the Department of Justice; supervision and training

1.3 Authority for issuance of the Attorney General’s title regulations; form of citation

1.4 Federal land acquisitions governed by the Attorney General’s title regulations

1.4.1 Purchases, condemnations, donations, and exchanges

1.4.2 Fee simple and other interests in real property

1.5 Federal land acquisitions not subject to the Attorney General’s title regulations

1.5.1 Ownership acquired or recognized in defense of litigation

1.5.2 Acquisitions in trust for Native Americans

1.5.3 Leases not exceeding 30 years

Part 2: Beginning the Title Review and Approval Process

2.1 Confirming authority to acquire real property; identifying funding

2.2 Determining the interest to be acquired.

2.2.1 Mineral interests

2.2.2 Water rights.

Part 3: Obtaining Record Title Evidence

3.1 Search and reporting requirements

3.2 Selecting a title examiner

3.3 Required period of search for public land records

3.4 Search of federal court records

3.5 Acceptable formats for reporting title examination results

3.6 Overview of title insurance

3.6.1 Title insurance commitments

3.6.2 Title insurance policies

3.6.3 Limits on liability

3.6.4 Asserting claims against title insurance policies

3.7 Overview of abstracts of title

3.7.1 Required contents

3.7.2 Abstractor’s certification

3.7.3 Special challenges in reviewing abstracts of title

3.7.3.1 Deceased landowners; determination of heirship

3.7.3.2 Conveyances by a trustee or fiduciary

3.7.3.3 Conveyances by a corporation or other business entity

3.7.3.4 Foreclosures, tax sales or other judicial proceedings

3.7.3.5 Special assessment districts; property owners’ associations

3.7.3.6 Ownership of streets and alleys

3.7.3.7 Public records lost or destroyed

3.8 Other acceptable formats for reporting title examination results

3.8.1 Certificates of Title

3.8.2 Copies of official records authenticated by a custodian

3.8.3 Owners’ duplicate certificates of title issued under the Torrens system

3.8.4 Other evidence of record title acceptable to the reviewing attorney

Part 4: Assembling Non-record Title Evidence

4.1 Purpose

4.2 Preparing a Certificate of Inspection and Possession (“CIP”)

4.3 Concerns revealed by physical inspection

4.4 Formal surveys and real property descriptions

Part 5: Requesting the Attorney General’s Review and Approval of Title

5.1 Overview

5.2 Required qualifications for reviewing attorneys

5.3 Documents and information to be submitted with request

Part 6: Conducting the Pre-acquisition Title Review

6.1 Determining sufficiency of title

6.2 Analyzing limitations on title

6.2.1 Restrictive covenants

6.2.2 Rights of reverter

6.2.3 Interests held by other federal agencies

6.3 Requesting waiver of the Attorney General’s title regulations

6.4 Preparing the pre-acquisition title opinion

Part 7: Completing an Acquisition by Deed

7.1 Overview

7.2 Payment of taxes, liens, and assessments

7.3 Requirements for the deed to the United States

7.4 Acceptable forms of post-acquisition title evidence for a conveyance by deed

Part 8: Conducting the Post-acquisition Title Review Following an Acquisition by Deed

8.1 Confirming sufficiency of title; preparing a post-acquisition title opinion

8.2 Documents and information to be submitted to the reviewing attorney

8.3 Materials to be submitted to the Department of Justice following post-acquisition title review

Part 9: Acquiring Title by Condemnation

9.1 Introduction to eminent domain

9.2 Two methods of federal condemnation

9.3 Title review and approval for condemnation cases

9.4 Obligation to record notice in the public land records

9.5 Preparation of title insurance policies for condemnation cases

9.6 Preparation of title opinions for condemnation cases

Appendix of Forms

Part 1: Legal Authority for the Review and Approval of Title to Real Property

1.1 The Attorney General’s responsibility; exercise within the Department of Justice

The Attorney General holds responsibility for the review and approval of title to real property before it may be acquired for use by the federal government.1 Within the Department of Justice, this responsibility is assigned to the Assistant Attorney General for the Environment and Natural Resources Division (ENRD).2 Designated attorneys in ENRD’s Land Acquisition Section conduct the review and approval of title on behalf of the Attorney General.

1.2 Delegation of the Attorney General’s responsibility outside the Department of

Justice; supervision and training

In 1970, Congress authorized delegation of the Attorney General’s responsibility for the review and approval of title to real property to federal government entities outside the Department of Justice, subject to two conditions: general supervision by the Attorney General, and exercise in accordance with regulations issued by the Attorney General.3 Multiple federal departments now hold delegations from the Assistant Attorney General, ENRD, for the review and approval of title.4

The general supervision by the Attorney General required for review and approval of title conducted outside the Department of Justice is provided by designated attorneys in ENRD’s Land Acquisition Section. The ENRD Land Acquisition Section responds to agency requests for information and guidance, provides training to agencies holding delegated authority, and reviews title opinions prepared by agency counsel exercising delegated authority.

Federal departments without a delegation of the Attorney General’s authority must have title review and approval conducted by ENRD’s Land Acquisition Section, except where the Department of the Army is authorized to acquire land on behalf of another federal entity or otherwise provide land acquisition support services. The Department of the Army’s delegation of authority permits it to conduct these additional reviews.

1 40 U.S.C. § 3111(a) (“Public money may not be expended to purchase land or any interest in land unless the Attorney General gives prior written approval of the sufficiency of the title to the land for the purpose for which the Federal Government is acquiring the property.”). This statute creates a pre-condition for exercise of authority to acquire real property on behalf of the United States.

2 28 C.F.R. § 0.65(c).

3 40 U.S.C. § 3111(b)(1).

4 The Attorney General’s authority to delegate title review and approval authority outside the Department of Justice is also assigned to the Assistant Attorney General, ENRD. 28 C.F.R. § 0.66(b)(1).

1.3 Authority for issuance of the Attorney General’s title regulations; form of citation

This publication constitutes the current regulations of the Attorney General issued under authority of 40 U.S.C. § 3111(b)(1). The regulations may be cited as Regulations of the Attorney General Governing the Review and Approval of Title for Federal Land Acquisitions (2016) or, in subsequent references within the same document, as The Attorney General’s Title Regulations (2016). Questions regarding these regulations are to be directed to ENRD’s Land Acquisition Section.

The Attorney General’s Title Regulations (2016) supersede all prior title regulations of the Attorney General, including those adopted in Order No. 440-70 dated October 2, 1970, as amended in 1974 and 1990, and the Department of Justice Title Standards 2001.

The Attorney General’s Title Regulations (2016) have the full force and effect of federal regulatory law. Promulgation is exempt from notice and comment rulemaking via the Federal Register and from publication in the Code of Federal Regulations.5

1.4 Federal land acquisitions governed by the Attorney General’s title regulations

The Attorney General’s Title Regulations (2016) apply to all real property acquisitions by the federal government unless excluded by Congress. Subpart 1.5, below, identifies the most commonly encountered exclusions.

1.4.1 Purchases, condemnations, donations, and exchanges

Purchase as the term is used in 40 U.S.C. § 3111(a) and in these regulations includes conveyances by deed and acquisitions by exercise of eminent domain. Donations of real property and exchanges of land are also deemed to be purchases.6 Information obtained during the title review and approval process is needed to inform land management following acquisition without regard to whether consideration is paid.

1.4.2 Fee simple and other interests in real property

Land or any interest in land as the phrase is used in 40 U.S.C. § 3111(a) and in these regulations encompasses all estates in real property recognized by applicable laws,7 including

5 E.g., 5 U.S.C. § 553(a)(2).

6 36 Comp. Gen. 616, 618 (1957).

7 The applicable law will normally be that of the state where the land is located unless there are overriding federal considerations. E.g., United States v. Little Lake Misere Land Co., 412 U.S. 580 (1973).

but not limited to fee simple and lesser estates such as leases for terms of more than 30 years, access easements, conservation easements, and restrictive covenants. The phrase does not include rights that do not meet applicable legal definitions of real property, for example, revocable permits and licenses.

1.5 Federal land acquisitions not subject to the Attorney General’s title regulations

Congress has expressly exempted some agencies and programs from the requirement for review and approval of title by the Attorney General contained in 40 U.S.C. § 3111(a) and, it follows, from compliance with these regulations.8 Other land acquisitions do not require review of title under authority of 40 U.S.C. § 3111(a) because they are not purchases of real property for federal government use. The latter include but are not limited to real property acquired or recognized in defense of litigation brought against the United States, and acquisitions of land in fulfillment of trust responsibilities to Native Americans. Finally, leases with terms of 30 years or fewer are exempted from compliance with these regulations for reasons explained in Subpart 1.5.3, below.

1.5.1 Ownership acquired or recognized in defense of litigation

Transfers of title to the United States that are recognized as a result of entry of judgment in lawsuits brought against the United States are not purchases of land contemplated under 40 U.S.C. § 3111(a). However, counsel engaged in this or other litigation involving title to land may use the title examination process described in these regulations to obtain information needed to litigate effectively, or to identify and clear liens prior to a conveyance of record title to the United States. Knowledge of existing easements, restrictive covenants, and other matters running with title will also facilitate management of the land following a transfer of ownership to the United States.

1.5.2 Acquisitions in trust for Native Americans

The Secretary of the Interior has discretion to acquire land in trust for individual Indians and tribes.9 Acquiring title to real property as a fiduciary presents challenges and responsibilities distinct from those applicable to lands purchased for use and possible eventual disposal by federal agencies. Regulations applicable to the review and approval of title to land acquired in trust under authority of 25 U.S.C. § 5108 have been promulgated by the Department of the Interior and appear at 25 C.F.R. Part 151.

8 Express exemptions include land acquisitions on behalf of the Tennessee Valley Authority (“TVA”) and the U.S. Postal Service. The TVA exemption appears at 40 U.S.C. § 3111(d). The U.S. Postal Service exemption is found at 39 U.S.C. § 410(a).

9 E.g., 25 U.S.C. § 5108.

1.5.3 Leases not exceeding 30 years

Leases to be acquired with terms of no more than 30 years have been expressly exempted from compliance with prior regulations issued on behalf of the Attorney General under authority of 40 U.S.C. § 3111(b)(1). While all leases constitute interests in real property, the absence of evidence of loss or litigation arising from exemption of these shorter term leases merits continuing the exemption in the Attorney General’s Title Regulations (2016). Agencies with leasing programs reported use of alternative means for verifying ownership and control of properties and, where relevant, obtaining subordination or non-disturbance agreements from lienholders prior to award of leases. These approaches have proven sufficiently protective of the federal interest in preventing financial loss and avoiding foreseeable litigation without requiring purchase of record title evidence. Physical inspection of all properties under consideration for leasing as set forth in Part 4 of these regulations is nonetheless strongly encouraged.

Part 2: Beginning the Title Review and Approval Process

2.1 Confirming authority to acquire real property; identifying funding

Confirmation that Congress has authorized and funded an acquisition of real property is an essential prerequisite to title review and approval.10 Acquisition authority may be granted expressly, or by implication.11 In determining whether authorization is implied, agency counsel must look to the plain language and legislative history of statutes, case law interpreting the statutes, and principles of statutory construction. Where defects in an agency’s authority are found, or the extent of authority is so unclear as to raise serious doubts regarding its interpretation, the agency may need to seek a legislative remedy from Congress. Acquisitions must comply with all conditions precedent created by Congress.12

2.2 Determining the interest to be acquired

The agency authorized to make an acquisition must determine the interest it needs if

Congress has not specified the estate to be acquired. Multiple factors may influence this

10 “Land may not be purchased by the Federal Government unless the purchase is authorized by law.” 41 U.S.C. § 6301(c).

11 E.g., United States v. Kennedy, 278 F.2d 121 (9th Cir. 1960) (authorization of a federal program and an appropriation to pay for it may imply authorization to acquire the property necessary to carry out the program); Polson Logging Co. v. United States, 160 F.2d 712, 714 (9th Cir. 1947) (statutory authorization to procure real estate may be evidenced by the making of an appropriation as well as by a specific authorization to acquire).

12 For example, land acquisition authority is sometimes limited to a specific geographic area, or to transactions with willing sellers.

decision, including some beyond the scope of these regulations.13 However, review and approval of the interest to be acquired is an element of the sufficiency of title determination required of the attorney who will review title on behalf of the Attorney General (the reviewing attorney).14 If uncertainty exists regarding the estate to be taken, the acquiring agency must consult with the reviewing attorney before ordering a title examination or appraisal. This will enable the title examination and appraisal to proceed in a cost-effective manner and avoid delays in approval of title and compensation of landowners.

The following subparts contain guidance regarding acquisition and examination of title for two property rights about which questions often arise: mineral interests and water rights.

2.2.1 Mineral interests

Ownership of minerals15 or of rights to minerals may be severed from and conveyed independently of ownership of the surface of land. Absent specific legislative direction from Congress, an agency considering a purchase of land from which mineral interests have been severed will need to decide whether to acquire the outstanding mineral interests in addition to the surface estate. The rights accompanying minerals ownership and leasing are largely defined by the laws of the state where a property is located. In many states, ownership of mineral interests includes an implied right to use as much of the associated surface as is reasonably necessary to develop the underlying minerals. Acquiring agencies and reviewing attorneys must understand the scope of outstanding mineral interests in order to assess the risk that such rights could be exercised in a manner that would interfere with the federal government’s intended use of the land or endanger its investment in the property (including any planned improvements).

Mineral interests may be excluded from an acquisition if an acquiring agency concludes that it has no need for the minerals and the reviewing attorney determines that legal rights attaching to ownership and extraction of the minerals are unlikely to interfere with the United States’ reasonably foreseeable use of the property being acquired. These determinations are case-specific and must be evaluated separately for each acquisition.

A determination of noninterference may be based on the present improbability of development of the minerals, but the potential for changed circumstances in future must also be considered; for example, technology may advance or market prices increase so as to create incentives for mining or drilling. Should this occur, a subsequent acquisition of the mineral

13 See, e.g., Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. § 4601, et seq., and its implementing regulations.

14 40 U.S.C. § 3111(a). Subpart 6.1 of these regulations contains guidance on determining the sufficiency of title.

15 “Minerals” is used in these regulations to encompass interests in oil, gas, coal, sand, gravel, and all other subsurface resources other than water that may be owned separately from the surface estate in any jurisdiction.

interests at an increased cost may become necessary to protect the federal government’s investment. These situations are to be avoided to the extent reasonably foreseeable.

Solutions to concerns created by outstanding mineral interests vary according to circumstances. An agreement to subordinate the minerals owner’s right to use the surface may be an option (for example, if directional drilling from an adjoining parcel of land is physically and legally possible). In instances where a subordination agreement cannot be obtained, and reasonably foreseeable risk of exercise of the mineral interests (or the surface rights associated with the mineral interests) exists, such rights may have to be acquired through purchase or condemnation if title to the surface acquisition is to be approved.

Examination of title to the minerals will be necessary if a decision is made to acquire mineral interests. Abstracts of mineral titles may be obtained from specialized providers of this data in the western United States; private attorneys’ title opinions are offered more frequently in the east. Title evidence may also be prepared by federal agency personnel with the requisite subject matter expertise to do so upon approval of the reviewing attorney. The acceptability of the qualifications of the abstractor or other provider of title evidence must be confirmed with the reviewing attorney prior to contracting for title evidence.

Title insurance companies generally do not search title to mineral interests, but may agree to note the existence of related transactions found in the course of examining record title to the surface estate. Consideration should be given to requesting this information: The data obtained may lead to reevaluation of an initial decision to exclude mineral interests. If, for example, the title examination reveals mineral leasing, an agency will need to investigate the status of the leases.16 Alternatively, if some or all of the mineral interests are found to be held by the current surface owner, an agency should consider purchasing those minerals with the surface estate in order to reduce or eliminate the possibility of subsequent minerals leasing.

2.2.2 Water rights

Water rights may be owned separately from the surface estate, particularly in the western United States, under a variety of regimes recognized by state laws. Federal agencies acquiring water rights with the intent of exercising them – or preventing their exercise by removing them from the marketplace – must confirm title to the water rights. Title insurance companies generally do not offer this service. The acceptability of the qualifications of a water rights attorney or other independent water rights expert who can provide title evidence must be confirmed with the reviewing attorney prior to contracting for a water rights examination. Title evidence for water rights may also be prepared by federal agency personnel with subject matter expertise upon approval of the reviewing attorney.

16 The validity of minerals leases may not be determinable solely from a records examination because the leases often contain no fixed expiration date, providing instead for continuation so long as extraction is occurring or rentals are being paid to the lessor. Inspection of the land and interview of the surface estate and minerals owners and lessors may be necessary to resolve validity. See Part 4 of these regulations for guidance regarding such non-record title evidence.

2.3 Acquiring agency’s responsibility for obtaining title evidence; transfer of title by deed or by exercise of eminent domain

The acquiring agency must procure all information and documentation needed for the review and approval of title on behalf of the Attorney General – the title evidence. Title evidence must be obtained in a timely manner to avoid delay in compensating landowners for direct purchases and enable identification of interested parties for service of process in condemnation proceedings. Except where otherwise authorized by law or provided by contract, the expenses of procuring title evidence may be funded from appropriations for the acquisition of land or appropriations made for the contingencies of the acquiring agency.17

The means by which title will be transferred to the United States may not be determined until after an agency obtains title evidence and conducts negotiations with the landowner(s).

This uncertainty should not affect the title examination process, which requires the same forms of title evidence without regard to whether land will be conveyed by deed or acquired by condemnation. Where title will be transferred by deed, subsequent steps in the review and approval of title diverge as explained in Parts 6, 7, and 8 of these regulations. Part 9 addresses title review and approval requirements for condemnation cases.

2.4 Required forms of title evidence: record and non-record

Review and approval of title to real property requires gathering and examining record and non-record title evidence. Examination of title is incomplete without both.

• Record title evidence. Written evidence of title is found primarily in deeds and other documents recorded in the official public land records of the county, parish, or recording district (as applicable) where the real property of interest is located. Options for obtaining an examination of record title evidence are identified in Part 3 of these regulations.

• Non-record title evidence. Other important information regarding title may be discoverable only from physical inspection of a property or inquiry of its owners and occupants. The inspection and interview process for non-record title evidence is addressed in Part 4 of these regulations.

17 40 U.S.C. § 3111(c).

Part 3: Obtaining Record Title Evidence

3.1 Search and reporting requirements

The examination of the public land records must consist of a reasonably diligent search of the records, considering both the property’s character and value and the interests to be acquired.18 The resulting written report must disclose the name of each person or entity in whom title is vested, and all additional parties identified in the records as having or claiming an interest in the property to be acquired. The latter may include tenants revealed by recorded leases, lienholders, beneficiaries of easements, taxing authorities, owners’ associations, and heirs or devisees of a deceased owner where these successors in interest can be identified from public records. Legible copies or accurate transcriptions must be obtained of all documents affecting the present owner’s title and those creating interests that run with title to the land.

3.2 Selecting a title examiner

The record title examination must be obtained from a title examiner or title insurance company deemed competent to provide it by the reviewing attorney. Nationwide, title insurance companies are the most readily available sources for title examination. Title insurers authorized by state law to conduct business in the jurisdiction where the subject land is located and who hold membership in the American Land Title Association (ALTA) or Texas Land Title Association (TLTA) may be considered competent to examine title in the absence of adverse information. Subpart 3.6 of these regulations provides an overview of the process for obtaining title insurance.

At a minimum, a provider of title evidence must be licensed if licensing is required by applicable laws in the state where the real property is located. Title examiners must have no financial interest in the land to be acquired, nor be related to or affiliated with a seller or donor.

Agencies may adopt their own standards and procedures for approving providers of title

18 This requirement tracks Rule 71.1(c)(3) of the Federal Rules of Civil Procedure, which governs the United States’ responsibility for identifying interested parties when acquiring title by condemnation. The Advisory Committee notes explain that the requirement protects both landowners and the United States:

Where a short term interest in property of little value is involved, as a two or three year easement over a vacant land for purposes of ingress and egress to other property, a search of the records covering a long period of time is not required. Where on the other hand fee simple title in valuable property is being condemned the search must necessarily cover a much longer period of time and be commensurate with the interests involved. But even here the search is related to the type made by competent title searchers in the vicinity. A search that extends back to the original patent may be feasible in some midwestern and western states and be proper under certain circumstances. In the Atlantic seaboard states such a search is normally not feasible nor desirable. There is a common sense business accommodation of what title searchers can and should do.

evidence in addition to these basic requirements. The Department of Justice does not maintain a list of approved title examiners.

3.3 Required period of search for public land records

The time period of the historical public land record that must be examined will vary from state to state, in part as a result of laws limiting the effectiveness of documents recorded before a given period of years.19 Specification of a search period is generally unnecessary when title insurance is obtained, because title insurance policies do not routinely limit liability for information revealed by documents recorded before a given date. However, agencies must consult a reviewing attorney for guidance regarding the necessary period of search when relying on forms of title evidence that do explicitly limit liability based on recording date. If the reviewing attorney concludes that uncertainty exists under applicable laws, the following periods of search will apply.

• A minimum of 60 years for acquisitions of real property valued at $50,000 or more, except those listed below.

• A minimum of 40 years for acquisitions of real property valued at less than $50,000, except those listed below.

• A search identifying the owner under the most recent deed of record and encumbrances against the owner’s title for acquisitions of easements valued at less than $25,000 that will not be the primary access to a property and are not acquired with the intent of constructing permanent improvements of substantial value thereon.20

Values may be estimated based on the best information available at the time a title examination is requested.

3.4 Search of federal court records

Examination is required of federal court records in the federal court district where the land is situated to identify judgment liens, decrees, and pending cases that could affect title in

19 The Model Marketable Title Act was created to standardize the records review process nationwide.

Where adopted, the Act limits the necessary search period to 30 years, with some exceptions. States not adopting the Act may nonetheless have limited search periods by alternative legislation. Statutes governing the filing of specific types of liens may also prescribe periods of effectiveness.

20 The determination of what constitutes a permanent improvement of substantial value is left to the acquiring agency, subject to the concurrence of the reviewing attorney. The phrase is not intended to encompass ordinary signage or pedestrian trail development; however, paved parking lots and roads may qualify, depending on costs of construction. In cases of uncertainty the likelihood that the acquiring agency’s planned use will continue in perpetuity may be considered in deciding whether to approve title.

any state which has not enacted a statute authorizing judgments and decrees of United States courts to be recorded or otherwise conformed to the rules and requirements relating to judgments and decrees of the courts of the state.

In states that have enacted conformity statutes in accordance with 28 U.S.C. § 1962, no search of federal court records is necessary unless, under state law, judgments and decrees of the state courts become liens on property upon entry in the court where rendered, in which case search of the federal court records is necessary if those records are located in the county, parish, or recording district in which the land is located.

3.5 Acceptable formats for reporting title examination results

The following written formats for reporting the results of examination of the public land records may be accepted by reviewing attorneys. As a practical matter, selection may be limited by regional practices affecting availability in the marketplace.21

• Title insurance commitments (sometimes known as binders, preliminary reports on title, etc.) followed by issuance of title insurance policies on forms approved by the Department of Justice for use in federal land acquisitions

• Abstracts of title records

• Certificates of Title using the form set forth in the Appendix to these regulations

• Copies of public records authenticated by an official custodian

• Owners’ duplicate certificates of title issued under the Torrens system

• Other evidence of title acceptable to the reviewing attorney, including title opinions prepared by a private attorney or law firm and abstracts of title records prepared by a federal employee or contractor deemed competent to examine title by the reviewing attorney

3.6 Overview of title insurance

Title insurance is selected to document the results of the public records search for most federal land acquisitions because of its wide availability and proven reliability. Title insurance providers are generally members of the American Land Title Association, which promulgates standardized title insurance forms for use throughout the country, including the ALTA U.S.

Policy developed in conjunction with the Department of Justice for federal land acquisitions.

21 See, e.g., Subparts 2.2.1 and 2.2.2 of these regulations regarding mineral interests and water rights.

Title insurance is provided in two steps. The insurer first prepares a written summary of findings from its examiner’s initial public records search. The information is usually formatted as a title insurance commitment, described in Subpart 3.6.1 of these regulations. Together with a Certificate of Inspection and Possession prepared by the acquiring agency for non-record matters (see Subpart 4.2), the title insurance commitment will enable the reviewing attorney to conduct the pre-acquisition title review.

Following completion of a purchase or filing of a condemnation action, the title insurer proceeds to the second step in the title insurance process: updating its initial search of the public land records to confirm the United States’ deed (for a purchase) or notice of condemnation has been recorded in those land records with no intervening adverse changes to title. A title insurance policy will then be issued as set forth in Subpart 3.6.2 of these regulations.

Title insurance commitments and title insurance policies may be amended after issuance for a variety of reasons, including updating the initial search where excessive time has elapsed (for a commitment), adding or deleting exceptions to coverage based on new information brought to the insurer’s attention, and otherwise modifying coverage. These amendments are styled as endorsements. Each endorsement must reference the commitment or policy it is amending, and should be appended to the commitment or policy. Endorsements become a part of the record title evidence and must be provided promptly to the reviewing attorney.

3.6.1 Title insurance commitments

The title insurer’s summary of its initial records examination is usually formatted as a title insurance commitment, but may also be described by the provider as a binder, preliminary report, or litigation guarantee. The term “commitment” is used in these regulations for ease of reference. There is no required format for the commitment when the United States will be the insured party; however, the report received from the title insurer must:

• Encompass the interests in real property to be acquired by the United States.

• Disclose the full name of every person and entity in whom title to any interest to be acquired by the United States is vested, as shown by the public land records or otherwise known to the insurer.

• Identify all documents affecting any interest to be acquired by the United States (e.g., liens, easements, rights-of-way, affirmative and restrictive covenants, and competing records of ownership) revealed by the records search. Exceptions from coverage for these interests must specifically identify each holder.

• Provide addresses for all parties having or claiming any interest to be acquired by the

United States if disclosed by the public records or known to the insurer. This will facilitate service of process if condemnation is needed to acquire title.

• Include complete, legible copies or accurate transcriptions of all recorded instruments listed in the title insurance commitment as affecting any interest to be acquired by the United States.

• Identify all local taxing authorities, including lien due dates for each and amounts for all assessments that have not been paid as of the date of the commitment. The acquiring agency or reviewing attorney must obtain this information from other sources if it is omitted.

• Allow sufficient time for completion of acquisition by the United States without expiring and requiring purchase of a new commitment. A commitment with no expiration date is preferable. Reviewing attorneys have discretion to require an update prior to closing if they deem it advisable to address staleness.

The commitment should name the United States of America as the proposed insured and identify the title insurance policy form to be issued as one currently approved by the Department of Justice for use in federal land acquisitions. Errors in this information must be reported to the commitment issuer so they are not carried over to the title insurance policy.

Prior to closing, the acquiring agency or reviewing attorney must confirm with the title insurer that any changes to the commitment requested by the United States are acceptable. In lieu of an endorsement (described in Subpart 3.6, above) the reviewing attorney may accept a pro forma of the title policy to be issued or a mark-up of the title insurance commitment.

3.6.2 Title insurance policies

When a title insurance commitment is obtained as evidence of record title it must be followed by issuance of a title insurance policy. The appropriate trigger for issuance of the policy will depend on whether an acquisition is completed by acceptance of a deed, or by initiation of a condemnation case.

For a conveyance by deed, the title insurer may act as the closing agent, recording the deed to the United States in the public land records and updating the records search from the date of the title insurance commitment. The title insurer will then issue a title insurance policy on the ALTA or TLTA form required for federal land acquisitions.22 The policy will be used by the reviewing attorney to confirm that the interest contracted for by the acquiring agency vested in the United States. Subpart 8 of these regulations governs review of title following an acquisition by deed.

22 The current policy form is the ALTA U.S. Policy 9-28-91 (Revised 12-3-12), except in Texas, where the TLTA T-11 and T-12 are in use. Copies of the forms appear in the Appendix to these regulations.

Reviewing attorneys should consult the ENRD Land Acquisition Section or the ENRD internet website (www.justice.gov/enrd) periodically to identify newer forms.

http://www.justice.gov/enrd

For a condemnation action, notice of the U.S. District Court suit must be recorded in the public land records as soon as possible after filing of the complaint in court. The initial title examination must then be updated to confirm recordation of the notice and identify any changes in title that occurred between the time of issuance of the title insurance commitment and recording of the notice of condemnation.

The title insurance policy will be used by the Department of Justice to confirm recording of the notice of condemnation and verify that all parties identified in the public land records as having or claiming an interest in the condemned estate have been named as defendants to the suit. Additional defendants will be added if necessary as a result of changes to the status of title in the interval between issuance of the title insurance commitment and policy. Subparts 9.3, 9.4, 9.5, and 9.6 of these regulations address title review following the filing of a condemnation case.

3.6.3 Limits on liability

The federal government purchases title insurance to obtain a convenient and reliable examination of the public land records; the insurance provided with the title examination results is a secondary benefit. A liability amount of at least half the consideration paid for the property is recommended. However, the amount of insurance or liability amount chosen is left to the discretion of the acquiring agency, subject to approval by the reviewing attorney. State regulations or company rules may prevent title insurers from issuing a policy based on less than the full purchase price of a property.

For a donation or exchange of real property, the insured amount may be based on the best available estimate of value. It is not necessary to secure an appraisal in order to estimate value for purposes of purchasing title insurance, or to include the value of planned improvements in the liability amount.

3.6.4 Asserting claims against title insurance policies

The process for asserting claims against American Land Title Association policies is described in and governed by the “Conditions and Stipulations” in the ALTA U.S. Policy. A prompt notice requirement appears in section 3 of the ALTA U.S. Policy 9-28-91 (Revised 12-3- 12). For real property in Texas, the claims process is described and governed by conditions and stipulations found in the TLTA U.S. Policy.

The major differences between the standard ALTA and TLTA private owners’ policy forms and those used by the federal government relate to the right of subrogation and the right to defend suits for which the insurer might be liable. Lawsuits filed by and against the United States must ordinarily be prosecuted and defended by the Department of Justice. Thus, the ALTA U.S. Policy provides that a title insurer shall cooperate in the defense of any related claims and render reasonable assistance in defending suits, but preserves to the Department of Justice the ultimate control of any litigation. However, the policy also provides that insurance coverage will be forfeited if the Department elects not to follow the advice of the insurer.

3.7 Overview of abstracts of title

An abstract of title is an organized collection of documents that were found to affect title during a search of the public land records. The reviewing attorney must analyze each document in the abstract in order to determine current ownership. Review of a title abstract may be very time consuming, depending on the amount and type of activity revealed by the public records search.

Title abstracts are compiled primarily when title insurance is unavailable, generally for mineral interests and water rights (see Subparts 2.2.1 and 2.2.2). In some regions of the United States, abstracts of title may be obtained from an incorporated title company, or a certified individual title examiner. Elsewhere, abstracts are prepared by an attorney or law firm that may supplement the abstract with a chronological history of ownership and an attorney’s title opinion.

The private attorney’s title opinion should facilitate review of title on behalf of the United States, but the reviewing attorney must form his or her own opinion and memorialize approval of title in writing before the acquisition.

3.7.1 Required contents

An abstract of title must clearly identify the subject land and contain photocopies or summaries of all documents found to affect title after examination of the public land records.

The contents of a title abstract must be clearly organized. Where multiple parcels sharing a common preceding chain of title are to be acquired, a master abstract should be prepared and supplemented by an individual abstract for each related parcel. The abstractor’s certification must appear on each abstract.

Abstracts containing illegible photocopies are unacceptable and must not be relied on for review and approval of title until corrected. Abstracts containing extraneous documents irrelevant to the title being examined may also require revision at the discretion of the reviewing attorney.

Where documents are summarized rather than photocopied, the abstract must contain a sufficient summary of the material portions of each instrument to enable the reviewing attorney to determine the nature and effect of the instrument. The information necessary will vary, depending on controlling property law in the state where the land is located. Basic data that must be included are recordation information (date, book and page, or instrument number) for each instrument; identification of any unpaid mortgages, deeds of trust, and liens; and notice of any reservations, limitations, or conditions on ownership, e.g., easement grants and affirmative and restrictive covenants. Releases of homestead, dower, and other statutory rights must be affirmatively shown in jurisdictions where these rights are recognized at law.

Questions raised and encumbrances or clouds on title revealed by the abstract must be addressed in the reviewing attorney’s pre-acquisition title opinion. Subpart 3.7.3 of these regulations focuses on title abstractors’ responsibilities to supplement abstracts of title with information that can be used by a reviewing attorney to assess the sufficiency of title.

3.7.2 Abstractor’s certification

The abstractor’s certificate will generally be acceptable if it is in the form approved by a title association of recognized standing in the state where the land is located and if the abstractor certifies that he or she has examined all relevant public records pertaining to title for the required period of search, and that all matters of record affecting title are correctly shown in the abstract.

The certificate should specify the number of pages contained in the abstract, and must be dated and signed by the abstractor.

Professional liability must not be limited by vague language in the certification. In jurisdictions where the liability of the abstractor is based on the contract to search title, the certificate should state that the abstract is furnished to the United States of America. The reviewing attorney must be satisfied with the sufficiency of the abstract and the certificate.

3.7.3 Special challenges in reviewing title abstracts

When title examination results are summarized in a title insurance commitment, the commitment should identify all additional documentation required for a transfer of clear title to the United States.23 By contrast, where an abstract of title is obtained, it may be necessary for the reviewing attorney to make those determinations. The following subparts provide guidance in circumstances where additional research and documentation are found to be necessary following the initial record title examination.

3.7.3.1 Deceased landowner; determination of heirship

When a conveyance will follow the death of the most recent owner of record, confirmation must be made that the deed to the United States will be signed by the party or parties with legal authority to transfer title. As a practical matter, the ability to satisfy requirements for conveying title by deed created by a landowner’s death will depend largely on whether administration (i.e., probate) of the landowner’s estate has occurred and, if not, whether the landowner’s successors in interest (generally, heirs or devisees, but also potentially lienholders) can be identified and located and will cooperate in conveying title. If this proves impractical, the reviewing attorney should contact the ENRD Land Acquisition Section for guidance regarding the use of condemnation to clear title.

23 Reviewing attorneys may consider it appropriate to make independent determinations of the documentation required even if a title insurance commitment is obtained. There is an affirmative duty to do so if reviewing attorneys deem information provided in the title insurance commitment or abstract to be incomplete.

The following points are offered to guide attorneys in reviewing abstracts of title when the record landowner is deceased.

• Wills must be reproduced in full if the landowner died testate. Essential portions of probate proceedings, beginning with the petition for probate, must be shown.

• If title will be conveyed by devisees of a will, the abstract must show whether there has been final distribution of the estate, discharge of the executor, and closing of the estate.

• When title has passed without a will, the abstract must indicate whether administration of the estate has occurred and, if so, contain sufficient portions of the record of the proceeding to establish that statutory…