FBO_2_SOW.pdf

SCOPE OF SERVICES

CLOSING SERVICES FOR THE

NATURAL RESOURCES CONSERVATION SERVICE

WETLANDS RESERVE PROGRAM

I. OBJECTIVE

The objective of this contract is to obtain closing services for acquisitions of wetland easements on behalf of the United States of America, acting by and through the Natural Resources Conservation Service (“NRCS”), United States Department of Agriculture, pursuant to Title XII of the Food Security Act of 1985, as amended, 16 U.S.C. 3837.

II. BACKGROUND

The Wetlands Reserve Program (“WRP”) authorizes the acquisition of conservation easements from willing landowners for the purpose of restoring and protecting wetlands. The NRCS is the lead agency within the United States Department of Agriculture charged with administering this program.

III. SCOPE

The Contractor (hereinafter called the “Closing Agent” or “CA”) shall furnish all reasonable and necessary closing services which are incident to the acquisition of a wetland easement by the United States of America. The acquisition of the easement will comply with the requirements of the following: Department of Justice Title Standards 2001 (“Standards”); Department of Justice Regulations Concerning Approval of Title, as amended (“Regulations); Department of Justice’s Procedural Guide for the Acquisition of Real Property by Governmental Agencies; and applicable NRCS regulations and policies governing the WRP. The closing services provided by the CA will be in compliance with Texas law and the regulations governing the title insurance industry.

The term “closing services” includes, but is not limited to, obtaining an owner policy of title insurance from a title insurance company (which is authorized to conduct business in the State of Texas and which is acceptable to the NRCS), disbursement of settlement funds, and obtaining and recording deeds and any necessary curative instruments to assure insurable title of the wetland easement is vested in the United States of America. The title to be acquired must first be acceptable to the NRCS.

The closing services will be performed in the county, in which the wetland easement is located, unless the CA, the landowner and the NRCS mutually agree to a different location.

IV. STANDARDS AND RESPONSIBILITIES

The CA is responsible for having a current knowledge of the requirements of Texas law and regulations in connection with the closing of real estate transactions, the issuance of title insurance policies and title clearance. The title insurance company which is to issue the policy must be authorized to conduct business in the State of Texas, must be in compliance with Texas law and must be acceptable to the NRCS. The CA must be an approved agent licensed to close real estate transactions, disburse settlement funds and to write and issue title insurance policies in the State of Texas.

The CA will provide evidence of liability insurance coverage for errors and omissions in the amount of at least $1,000,000 and fidelity insurance coverage of at least $500,000 on each individual who will have access to the WRP funds. For transactions involving more than $500,000 in settlement funds, the fidelity insurance coverage must be in an amount which is not less than the amount of the settlement funds.

As an alternative to the amount of fidelity coverage described above, the CA may provide an insured closing letter from a title insurance company which is satisfactory to the NRCS providing for replacement of the settlement funds that are lost as a direct, proximate result of the fraud or dishonesty of the CA and its agents or employees. The Form T-51: Purchaser/Seller Insured Closing Service Letter is satisfactory to meet this condition of responsibility. If a Form T-51 is used, the fidelity insurance coverage must be no less than $250,000. Evidence of liability insurance coverage must be provided prior to contract award. Evidence of fidelity insurance coverage and/or an insured closing service letter must be provided prior to the transmittal of settlement funds to the CA by the NRCS.

V. CONFLICT OF INTEREST

A CA will not close on a WRP easement purchase for a spouse, children, partners or business associates, nor have a financial interest in the real estate to be covered by the proposed easement.

VI. DESCRIPTION OF SERVICES

A. Policy to be Issued - The CA must issue a Policy of Title Insurance to cover both the easement area and, if necessary, the access to and from the easement area. The Form T-11, Policy of Title Insurance (USA) shall be used. The name of the insured on the policy shall read:

United States of America. The policy will reflect the status and ownership of title as it exists prior to closing.

B. Title Search and Issuance of Policy - A title search will be performed for a sufficient period of time for the title insurance company to insure the title without objectionable exceptions. The policy will be unqualified as to the period of search. The title search will document all owners of record, outstanding mortgages, liens, judgments, pending suits, outstanding tax claims, easements or rights of ways of any type, whether oil, gas, and mineral interests have been severed, and any other exceptions that may affect or cloud the title of the easement to be purchased.

Upon completion of the title search and the issuance of the Form T-11, the CA shall prepare and forward the following documents to the CO:

1. Proposed Subordination Agreements, releases or partial releases, if applicable;

2. The original Policy of Title Insurance (USA) on Form T-11 and one copy of all documents described on Schedule B as title exceptions or encumbrances.

3. Other documentation as may be required.

Submit the above preliminary package to the Contracting Officer (CO) not later than 30 calendar days after receipt of the request for closing services.

C. Issuance and Transmittal of Closing Instructions - Upon receipt of the required documents, the CO will obtain from its Office of General Counsel (“OGC”) a Preliminary Title Opinion (“PTO”) and Closing Instructions. The Closing Instructions will prescribe the requirements for the closing including identifying which title exceptions are acceptable and which exceptions must be cured. The Closing Instructions will make other requirements to be satisfied prior to or at closing. The Closing Instructions and Warranty Easement Deed will be transmitted to the CA by the CO.

D. Notification of CO of the Closing - When the CA is ready to close the transaction the CA will notify the CO and will provide a copy of the proposed HUD-1 Settlement Statement to the CO. The CA shall not close the transaction prior to receiving the Closing Instructions.

E. Processing of the Payment - After receipt and approval of the proposed HUD-1 Settlement Statement, after receipt of proof of any other pre-closing requirements, and after receipt of the CA’s notification that the transaction is ready to close, the CO will process the landowner’s easement payment. Pay requests are forwarded by NRCS to the CA’s escrow account for disbursement at closing.

F. Closing the Transaction – Step 1 - Updating the Title Search - The real estate records covering the time from the effective date of the policy to the date of closing must be examined immediately prior to closing to determine that no adverse change in title has occurred and that there are no intervening matters affecting title which might result in a new title exception on the policy. If any such changes or matters are discovered, the CO must be notified immediately and the recording of the deed must be delayed. Do not proceed until further instructions are received from the CO.

If there are no changes or intervening matter(s), the transaction may be closed, the deed should be recorded and the endorsement issued. No exception may appear on the policy or endorsement relating to changes or matters which have arisen since the effective date of the policy and before closing.

Step 2 - The Closing - Within 5 business days of receipt of the settlement funds, the CA shall close the transaction. The CA shall obtain the execution of such items as the Warranty Easement Deed, full or partial releases, subordinations, and other curative documents.

If there have been no changes to title since the issuance of the Policy (see Step 1), the CA should record the deed and any other instruments as necessary, disburse the settlement funds and issue the Endorsement, T-12.

The CA must insure that the following have occurred:

1. Based upon a thorough search of the applicable real estate records, there have been no changes in title since the Policy was issued. See Step 1.

2. The Warranty Easement Deed has been received; has been properly executed and acknowledged; and the deed (with all attached exhibits) has been recorded.

3. All title exceptions required to be removed as set forth in the Closing Instructions have been removed and the applicable curative documents recorded.

4. All other requirements in the Closing Instructions have been addressed or satisfied.

5. All taxes, assessments, etc., which are payable on the date of closing have been paid.

6. The Endorsement to the Title Insurance Policy on Form T-12 has been issued.

7. There has been full compliance with any listed requirements of the Policy of Title

Insurance.

8. IRS Form 1099-S has been prepared and submitted for all payments issued to the seller of the easement.

9. The seller has been provided with copies of all documents to be recorded and a copy of the HUD-1 Settlement Statement.

10. The settlement funds have been correctly disbursed as reflected on the HUD-1 Settlement

Statement.

H. Return Documents to CO - The following documents shall be returned to the CO within ten business days following closing:

1. The invoice covering the agreed upon closing cost.

2. The original Endorsement on Form T-12.

3. The original, recorded Warranty Easement Deed with all applicable exhibits.

4. A copy of the signed HUD-1 Settlement Statement.

5. Certified copies of all title clearance documents. For those documents which have been recorded, the copy must show the recordation date and recording information (such as volume and page number).

6. Any other documents required by the Closing Instructions.

I. Final Title Opinion - Upon receipt of the final documents, NRCS will request a Final Title Opinion ("FTO") from the OGC.

VII. DELIVERY

Within 30 calendar days after receipt of the request for closing services, the CA shall submit the preliminary package to the CO. Within 15 calendar days after receipt of the settlement funds, the CA will close the transaction.

VIII. PAYMENT

The CA will bill NRCS directly for all closing costs. The CA will provide an invoice for all the closing costs, including the reimbursable expenses, such as the title insurance fee, attorney fees and recording fees. Payment will be made upon receipt of the Final Title Opinion.

The CA will be paid a flat fee for services rendered which is inclusive of all travel expenses, copy costs, telephone charges and charges of a like nature.

IX. AUTHORITY

Only the NRCS Contracting Officer may authorize a modification to this contract. Any questions may be directed to the Contracting Specialist, Danny Mandell at (254) 742- 9923. The fax number is (254)742-9929.