S01 Attachment 1_SOW_Title Search and Closing Svcs.pdf

U.S. Department of Agriculture Title Services Statement of Work Natural Resources Conservation Service NRCS Easement Programs

Statement of Work for

Title Search and Closing Services for NRCS Easement Programs

I. OBJECTIVE

The objective of this contract is to obtain a preliminary title report, title commitment, final title policy, and closing services for acquisitions of conservation easements on behalf of the United States of America, acting by and through the Natural Resources Conservation Service (NRCS), U.S. Department of Agriculture (USDA).

II. BACKGROUND

The Agricultural Conservation Easement Program - Wetland Reserve Easements (ACEP- WRE), authorizes the acquisition of easement rights from willing landowners for the purpose of restoring and protecting wetlands and associated upland and riparian rights.

NRCS is the agency within the USDA that is responsible for administration of this program.

III. SCOPE

The contractor must coordinate, facilitate, and perform the following services:

1. Provide a preliminary title report, including copies of all instruments that created rights, interests, or encumbrances, for the proposed conservation easement and ingress-egress descriptions.

2. Work with NRCS and the landowners to clear exceptions on title to the property and resolve vesting interests.

3. Provide a title commitment, based upon the final surveyed legal description of the conservation easement area, including copies of all instruments that created rights, interests, or encumbrances on the property not included on the preliminary title report for the proposed easement boundary and ingress-egress descriptions.

4. Hold funds in escrow, provide closing protection coverage, and provide payment to proper recipient and comply with Internal Revenue Service (IRS) tax reporting Form 1099.

5. Obtain signatures on warranty easement deeds provided by NRCS.

6. Obtain signatures on subordination agreements and limited lien waivers, affidavits, and any other necessary documents.

7. Record documents in the local land records office (e.g., the applicable county registrar or recorder’s office).

8. Provide a final title insurance policy using American Land Title Association

(ALTA) U.S. Policy 09-28-1991 (Revised 12/3/2012)

9. Provide other services, as necessary, to finalize the easement transaction.

The contractor will provide the above-listed items to the designated NRCS contact identified on the attachment to this statement of work.

IV. STANDARDS AND RESPONSIBILITIES

The acquisition of the conservation easement and any access easement is governed by the following requirements:

a. Regulations of the Attorney General Governing the Review and Approval of Title for Federal Land Acquisitions (2016)

b. NRCS regulations and policies governing the NRCS program under which the easement is being acquired.

The contractor will perform the same services that are customarily provided in a commercial transaction, including chain of title, determination of ownership and interest share of surface and subsurface rights, securing and providing all underlying documents, obtaining and recording deeds, and any necessary curative instruments to ensure merchantable, insurable title to the conservation easement are in the name of the United States of America. The contractor is responsible for having up-to-date knowledge of the requirements of California’s laws on title searches, closing real estate transactions, and title clearance. The title insurance company and its issuing agents must comply with California’s laws, including title insurance reserve requirements. The contractor must be licensed to do title insurance business in California. The title insurance company must be approved by the State’s insurance commissioner.

The contractor must obtain a valid Dun and Bradstreet Data Universal Numbering System (DUNS) number and must maintain active registration in the System for Award Management (SAM) at www.SAM.gov for the duration of the contract to provide closing services to the NRCS.

The contractor must provide evidence of liability insurance coverage or indemnification in an amount equal to the amount of Federal funds for each easement satisfactory to NRCS, acting on behalf of the Commodity Credit Corporation, providing for reimbursement to NRCS for any loss of Federal funds caused by errors, omissions, fraud, dishonesty, negligence, or failure by the attorneys, agents, or closing agent employees to comply with NRCS’s written closing instructions. The ALTA closing protection letter, revised 4/2/2014, is satisfactory to meet this condition of responsibility. Evidence of liability insurance must be provided prior to award.

V. DESCRIPTION OF SERVICES

A. Preliminary Title Report

The contractor must provide the following:

1. Copies of all instruments that created rights, interests, or encumbrances on the proposed easement property.

http://www.sam.gov/

2. Preliminary title report, which must cover the entire proposed conservation easement area and the access for ingress and egress to the easement area.

3. The preliminary title report and copies of all instruments that created rights, interests, or encumbrances on the proposed conservation easement property must be provided within 21 business days of receiving the request from NRCS.

The preliminary title report must identify all owners of record, outstanding mortgages, liens, judgments or pending suits, outstanding tax claims, easements or rights-of-way of any type, including oil, gas, and mineral interests that have been severed, any water right interests, and any other exceptions that may cloud the title of the conservation easement to be purchased. The search must show ownership interest of the surface and subsurface rights including oil, gas, coal, sand, gravel, and other minerals associated with the property. The preliminary title report must include a legible copy of all underlying documents of any type, whether oil, gas, or mineral interests have been severed, mortgages, bankruptcies, and any other exceptions that may cloud the title of the conservation easement to be purchased.

The contractor will be provided with the name, address, and telephone number of the landowner, a copy of the current ownership documentation as provided by the landowner to NRCS, a location map of the proposed easement area, and the proposed access route for ingress and egress.

Not every preliminary title report obtained by NRCS will result in an order for the closing services outlined in Section B. NRCS might not ultimately purchase an easement on the properties for which it obtains a preliminary title report. NRCS may elect not to make an offer to the landowner based on an eligibility review. NRCS may withdraw an offer to landowners if NRCS lacks funding, landowners are unable to provide clear title or sufficient legal access, or for other reasons as determined by NRCS. The agreement to purchase the conservation easement may also expire or the landowners may elect to cancel the agreement with NRCS.

If NRCS intends to proceed with the acquisition of an easement and orders closing services identified in Section B., NRCS may require the contractor to execute a separate acknowledgement for individual transactions, affirming that it will comply with all of the requirements set forth in Exhibit A. hereto, “Closing Agent Requirements,” for that transaction. If the contractor hires a subcontractor to complete the closing services outlined in Section B., the contractor may be required to provide NRCS an executed acknowledgement of the “Closing Agent Requirements” from the subcontractor.

B. Title Commitment & Closing Services

After receiving a survey and legal description of the conservation easement from NRCS, the contractor must provide a title commitment, which must cover both the easement area and access for ingress and egress. No other title product may be substituted in place of the title commitment. The title commitment must be provided to the designated NRCS contact identified on the attachment to this statement of work within 14 business days of receiving the request from NRCS. In the event of easement boundary or acreage changes, after the completion of the survey, the title commitment must be updated to provide adequate owner’s coverage.

The title commitment must be provided from a closing agent operating with a licensed title insurance company authorized by law and by the State insurance commissioner to issue title insurance policies in California. The amount of the owner’s coverage should be listed as the easement purchase price. The title commitment must be for a sufficient period of time for the title company to insure the title without objectionable exceptions and must identify all owners of record, outstanding mortgages, liens, judgments or pending suits, outstanding tax claims, easements or rights-of-way of any type, including oil, gas, and mineral interests that have been severed, any water right interests, and any other exceptions that may cloud the title of the conservation easement to be purchased.

The title commitment must show ownership interest of the surface and subsurface rights including oil, gas, coal, sand, gravel, and other minerals associated with the property. The title commitment must include a legible copy of all underlying documents of any type, whether oil, gas, or mineral interests have been severed, mortgages, bankruptcies, and any other exceptions that may cloud the title of the conservation easement to be purchased.

Upon receipt of the title commitment, NRCS will forward the title commitment and other related documentation to the USDA Office of the General Counsel (OGC) regional attorney for a preliminary title opinion (PTO). If any outstanding issues remain, NRCS will work with OGC to determine which exceptions are acceptable and which exceptions must be cured.

The title commitment must not contain an exception related to the terms and conditions of the NRCS warranty easement deed to be recorded at closing.

NRCS will provide the NRCS closing instructions and the applicable instructions from the OGC PTO identifying the requirements that must be met before the easement can be closed. The contractor must communicate with NRCS and the landowner regarding proper procedures for the landowner to clear exceptions and the contractor must obtain the execution of documents such as releases, subordinations, full or partial satisfaction for mortgages, lien waivers, affidavits of materialmen’s liens, child support, and other types of releases of encumbrances on the property.

The contractor must establish an escrow account in an FDIC insured account for the payment of the conservation easement associated with the closing and include the escrow account banking information in their System for Award Management (SAM) registration.

The contractor will be responsible for Form 1099 reporting of the conservation easement payment to the IRS. NRCS will prepare documentation needed to authorize payment to the escrow account when notified of the closing date. In certain cases, as stated in the NRCS closing instructions, the contractor may be required to withhold a portion of the payment for property taxes or assessments that are not yet determined or payable in an escrow account and process payments when due.

The contractor is required to close within 30 calendar days of receipt of the Federal funds from the U.S Treasury by electronic funds transfer. The contractor will not close any transaction or record deeds or other instruments prior to receiving the NRCS closing instructions letter and OGC PTO requirements.

Prior to closing the easement, the contractor must ensure that the following have occurred:

1. No new encumbrances have been recorded against the subject property since the date of the most recent title commitment, no adverse change in title has occurred, and there are no intervening matters affecting title that might result in a new title exception to the policy. If any new encumbrances have been recorded against the subject property or other adverse changes in title have occurred since the date of the most recent title commitment, notify the NRCS technical representative immediately and do not proceed until further instructions are received. The contractor may be required to provide an updated title commitment to confirm all title requirements will be met at or prior to closing.

2. The contractor has received the electronic funds transfer of the conservation easement payment in his or her escrow account.

3. The contractor is prepared to issue the policy of title insurance referred below.

4. All exceptions required to be removed, released, subordinated, waived, or otherwise handled as set forth in the NRCS closing instructions have been completed and the applicable clearance documents recorded, and all other requirements met. Proposed subordination agreements, satisfactions, releases, partial releases, and other title curative documents to be signed at closing will be provided to NRCS for review and approval at least 3 business days prior to closing.

5. Compliance with any listed title commitment requirements.

6. Review the Warranty Easement Deed according to the NRCS closing instructions and ensure the proper names and marital status are correct.

7. The contractor must provide a copy of the proposed HUD-1 settlement statement to NRCS for review and approval as least 3 business days prior to closing.

The contractor must schedule the execution of the NRCS warranty easement deed with the landowner at a mutually agreed upon location and time. The preferred location is the local NRCS service center; however, the deed execution may take place at any agreed upon location. The contractor must obtain a properly executed and acknowledged warranty easement deed from the landowner(s) conveying the conservation easement, including the associated ingress and egress to the easement area. The contractor must ensure that the deed contains all required signatures, release of dower rights, and that all signatures are in proper form and have been acknowledged, that the acknowledgement certificates are in proper form and have been completed correctly, and that the warranty easement deed contains all of the necessary exhibits. The contractor must also obtain NRCS signatures on the warranty easement deed.

When the signed documents are returned, the contractor must record the deeds and other instruments as necessary, and ensure the following have occurred:

1. The contractor must ensure that no new encumbrances have been placed on the property prior to recording the warranty easement deed.

2. NRCS receives an electronic copy of the executed deed.

3. The contractor must record the warranty easement deed, exhibits, and any necessary title curative documents within 5 business days of execution.

4. All taxes, homeowners’ assessments, etc. are paid to the date the warranty easement deed is recorded.

5. The contractor must issue a policy of title insurance on ALTA U.S. Policy Form

9/28/91 (Revised 12/3/12), with the “United States of America” named as the insured party in the full amount of the easement compensation amount identified on the warranty easement deed as of the time and date of the recording of the warranty easement deed. Said policy of title insurance must be free and clear of any and all encumbrances to the title except those shown as acceptable in the NRCS closing instructions and insure the United States’ interest in the easement area and the right of ingress-egress thereto. The final policy should reflect the execution and recording information pertaining to the insured easement, such as:

“30-Year or Perpetual Easement granted by to United States of America, by Warranty Easement Deed dated and recorded in Deed Record pages in the Office of the Recorder of County,__________.”

6. Complete IRS tax reporting Form 1099 for the full easement compensation amount, as identified in the warranty easement deed, issued to the appropriate parties.

The contractor must return the following package to the designated NRCS contact identified on the attachment to this statement of work within 5 business days of receipt of recorded documents from the local land records office:

1. Invoice submitted to the Invoice Processing Platform (IPP) covering the agreed-upon costs incurred for services provided at www.ipp.gov. The contractor will be paid a flat fee for services rendered, including all travel expenses, copy costs, telephone charges, and the like. The contractor must provide documentation for reimbursable expenses, such as title insurance fees and recording costs.

2. Policy of title insurance (original and one copy), ALTA U.S. Policy Form 9-28-91 (Revised 12/3/2012).

3. Recorder’s certified copy of the ACEP-WRE warranty easement deed and a recording receipt.

4. Recorder’s certified copies of any curative documents, including subordination agreements

5. Original and one copy of executed settlement statements

6. Record of disbursement of funds to the landowner

7. Completed IRS Form 1099 issued to the landowners http://www.ipp.gov/

Upon receipt of the final documents, NRCS will request a final title opinion (FTO) from the OGC. If the FTO identifies issues that were not resolved by the contractor in accordance with the NRCS closing instructions and OGC PTO requirements, NRCS will notify the contractor of required remedies. If necessary corrections were originally identified in the NRCS closing agent requirements form or NRCS closing instructions, such corrections must be done at no additional cost to NRCS and returned to the NRCS technical representative within 14 days of notification of such issue. Upon receipt of an OGC FTO indicating that all NRCS closing instruction and OGC PTO requirements have been met, NRCS will process the contractor’s payment for closing services.

VI. PAYMENT

There will be two payments issued:

1. Payment will occur upon receipt and approval of all deliverables identified above in Section V, item A. (Preliminary Title Report).

2. Payment for recording costs and policy premiums will occur upon receipt and

NRCS approval of all deliverables identified in above Section V., item B.

3. Payment of the contractor’s closing fee will occur upon final review and approval by NRCS or OGC of all deliverables identified in above Section V., item B., including satisfactory completion of any required remedies or corrections.

NRCS will process the contractor’s payment request submitted through the Invoice Processing Platform (IPP at www.ipp.gov) for services rendered. The contractor is responsible for submitting invoices through IPP for payment.

VII. CONFLICT OF INTEREST

The contractor must not close an NRCS easement purchase for their spouse, children, partners, or business associates, and must not have a financial interest in the real estate covered by the proposed easement.

VIII. AUTHORITY

Only the NRCS contracting officer may place orders under this contract. Any modifications or questions may be directed to the originating contracting officer identified on the signed contract.

IX. NONDISCLOSURE

Work performance required by this statement of work will involve access to potentially sensitive information about governmental and landowner issues. All contractor personnel must comply with the terms of AGAR 452.224-70, “Confidentiality of Information,” as well as provisions of the Privacy Act of 1974, 5 U.S.C. Section 552a. Additionally, the contractor’s employees must comply with the NRCS guidelines and requirements regarding the disclosure of personal information protected under section 1244 of the Food http://www.ipp.gov/

Security Act of 1985, as amended (16 U.S.C. Section 3844), and information protected under section 1619 of the Food, Conservation, and Energy Act of 2008 (Public Law 110- 246), 7 U.S.C. Section 8791.

X. CIVIL RIGHTS AND PROGRAM DELIVERY

By signing the contract, the contractor assures the Department of Agriculture that the activities provided under this agreement will be conducted in compliance with all applicable Federal civil rights laws, rules, regulations, and policies.

XI. PRICE QUOTES

All price quotes should be firm-fixed price per line item listed below:

Product or Service Unit Price

1. Preliminary Title Report, including price for research and copies of all underlying documents

Job $

2. Title Commitment Job $

3. Endorsement to Title Commitment prior to closing (estimate) Job $

4 Owner’s affidavits or required cost to clear general exceptions (estimate)

Job $

5. Closing/Escrow Services, including all currier and documentation

Job $

6. Closing Protection Coverage Job $

7. Recording Fees (estimate) Job $

8. Title Insurance Premium (estimate) Job* $

* In lieu of providing quote based on the easement purchase price, contractor may provide a published fee schedule for those costs.

If prices for items 1, 2, 3, 4 and/or 6 are waived when title insurance is purchased, please report that.

EXHIBIT A

ATTACHMENTS:

1) NRCS CONTACTS FOR SUBMISSION OF DELIVERABLES

Dean Kwasny NRCS Easement Specialist 430 G Street, Rm 4164 Davis, CA 95616 530-304-2355 Dean.Kwasny@usda.gov

2) NRCS CLOSING AGENT REQUIREMENTS

United States Department of Agriculture (USDA) Natural Resources Conservation Service (NRCS)

Closing Agent Requirements for Easement Programs

NRCS Easement Program:

� Agricultural Conservation Easement Program - Wetland Reserve Easement (ACEP-

WRE)

By signing these “NRCS Closing Agent Requirements,” I am certifying that I meet the requirements set forth herein, which ensure that the Federal funds received for the purchase of the subject easement are handled in a manner that protects the interests of the United States of America.

• For ACEP-WRE transactions, these requirements and instructions are in addition to any closing instructions provided by NRCS or the USDA Office of the General Counsel (OGC).

The Parties to this transaction are as follows:

United States of America Natural Resources Conservation Service 430 G Street, Room 4164 Davis, CA 95616

Landowner/Grantor:

[Enter landowners’ names, addresses, and phone numbers] mailto:Reymon.Hernandez@usda.gov

The closing agent must—

1. Acknowledge that he or she has up-to-date knowledge of the requirements of State law in connection with closing real estate transactions and title clearance.

2. Certify that the he or she is an approved agent licensed to engage in title insurance business in the State.

3. Certify that the title insurance company issuing the title commitment and final policy of title insurance is approved by the State insurance commissioner.

4. Provide the Parties liability insurance coverage or indemnification in an amount equal to at least the amount of the Federal funds for each easement satisfactory to NRCS, acting on behalf of the Commodity Credit Corporation, providing for reimbursement to NRCS for any loss of Federal funds caused by errors, omissions, fraud, dishonesty, negligence, or failure by the attorneys, agents, or closing agent employees to comply with written closing instructions.

• The American Land Title Association (ALTA) closing protection letter revised 4/2/2014 is satisfactory to meet this condition of responsibility.

5. Provide evidence of liability insurance or indemnification to NRCS prior to the transfer of Federal funds into escrow.

6. Certify that the he or she will not close on an easement purchase for his or her spouse, children, partners, or business associates, and that he or she does not have a financial interest in the real estate to be covered by the proposed easement.

7. Agree that the United States’ portion of purchase price for the acquisition (i.e., Federal funds) will be sent from the U.S. Treasury by electronic fund transfer (EFT) to the escrow account prior to closing payable to the landowner in the amount of

8. Agree to provide a copy of the proposed settlement statement to NRCS for review and approval at least 3 business days prior to closing.

9. Agree to close the easement transaction within 30 calendar days of receipt of the Federal funds.

10. Acknowledge that costs to clear title are the responsibility of the landowner.

11. Return the easement funds and any accrued interest in accordance with NRCS instructions if the conservation easement is not closed within 30 calendar days of receipt of the Federal funds.

12. Certify that he or she will–—

• Immediately prior to closing, examine the real estate records covering the time from the effective date of the title commitment to the date of closing to determine that no new encumbrances have been recorded against the subject property, no adverse change in title has occurred and that there are no intervening matters affecting the title that might result in a new title exception on the policy. Notify NRCS of any such changes or matters that are discovered, and delay the closing, the recording of the deed, and the disbursement of funds pending consultation with NRCS.

• Obtain the properly executed conservation easement deed from the landowner and any other required signatory parties.

• Comply with any listed title commitment requirements.

• Obtain and record as instructed the properly executed curative documents for any items required to be removed, released, subordinated, waived, or otherwise handled as required by the title commitment or proforma policy and closing instructions.

• Secure the policy of title insurance referred to below.

• Ensure all taxes, homeowners’ assessments, etc. are paid to the date the conservation easement deed is recorded.

• Record the conservation easement deed within 5 business days of execution.

• Complete Internal Revenue Service (IRS) tax reporting Form 1099 for the full easement compensation amount, as identified in the conservation easement deed.

13. Immediately following closing, issue policies of title insurance free and clear of any and all encumbrances (exceptions) to the title except those that NRCS has determined to be acceptable.

• For ACEP-WRE easements, ALTA U.S. Policy (9/28/91, revised 12/3/2012) with the “United States of America” named as the insured party in the full amount of the easement compensation amount identified in the warranty easement deed.

14. Certify that the following package will be delivered within 5 business days of receipt of recorded documents from the local land records office to NRCS:

• A statement covering the agreed upon closing costs

• Policy of title insurance (original and one copy) on the appropriate form

• Recorder’s certified copy of the recorded conservation easement deed and a recording receipt

• Recorder’s certified copies of any curative documents, including subordination agreements

• Original and one copy of executed settlement statements

• Record of disbursement of funds to the landowner

• Completed IRS Form 1099

15. Acknowledge receipt and agree to comply with the terms of these requirements by signing and returning a signed copy of these closing agent requirements to NRCS prior to closing.

16. Provide a projected closing date and the name, address, and account number of the financial institution registered in the System for Award Management (www.SAM.gov) where electronic funds are to be deposited.

17. For ACEP-WRE transactions:

• Obtain a valid Dun and Bradstreet Data Universal Numbering System (DUNS) number and maintain active registration in the System for Award Management (SAM) or successor registry for the duration of any contracts or agreements to provide closing services to NRCS.

• Establish an escrow account in an FDIC-insured account for the easement payment and include the escrow account information in their SAM registration.

http://www.sam.gov/

18. Complete the following for all ACEP transactions:

Signature of Closing Agent _______________________________________

Name of Closing Agent __________________________________________

Projected Closing Date: __________________________________