[Code of Federal Regulations]
[Title 32, Volume 4]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR644.69]

[Page 153-154]
 
                       TITLE 32--NATIONAL DEFENSE
 
              CHAPTER V--DEPARTMENT OF THE ARMY (CONTINUED)
 
PART 644--REAL ESTATE HANDBOOK--Table of Contents
 
                         Subpart C--Acquisition
 
Sec. 644.69  Title Clearance--Easements.

    (a) Easements Costing in Excess of $1,000. Curative action and 
clearance of title to easements costing in excess of $1,000 will be the 
same as in fee acquisitions, as outlined above, except as follows:
    (1) Under an agreement with the Department of Justice, title to 
easements will be approved subject to outstanding encumbrances, such as 
mortgages, deeds of trust, judgments, and vendors' liens, where the 
tract is not encumbered in excess of 50 percent of the reasonable value 
of the remaining property, and the consideration being paid for the 
easement does not represent a sum in excess of ten percent of the value 
of the remaining property. (As to taxes, see Sec. 644.70(k)(6).)
    (2) For the purpose of making the determinations necessary to apply 
the formula set forth in paragraph (a)(1) of this section, resort may be 
had to the tract appraisal, provided it is based on a ``before and 
after'' approach, in which case the amount of the ``after'' appraisal 
will be used as the reasonable value of the remaining property. In the 
event no such appraisal has been made, a memorandum estimate by a 
qualified appraiser (staff or contract) will be obtained. Determination 
of the total encumbrances may be made on the basis of the face of the 
encumbering instruments. However, if it is necessary to determine that 
the total amount of the outstanding liens as of the date of closing has 
been reduced to an amount less than 50 percent of the reasonable value 
of the remaining property, such reduction must be evidenced by signed 
statements from the lienees or their authorized representatives. The 
appraisal or memorandum estimate and the lienee statements will be 
placed in the tract file.
    (3) On the basis of the determinations described in paragraph (a)(2) 
of this section, the appropriate information will be inserted on ENG 
Form 3536, Statement Concerning Outstanding Encumbrances, which will be 
signed by the closing agent. The original will appear as a separate 
document in the Final Title Assembly submitted to HQDA (DAEN-REA-P) WASH 
DC 20314.
    (b) Easements Costing Not in Excess of $1,000. (1) Requirements for 
the release

[[Page 154]]

or subordination to such easements of mortgages, deeds of trust, 
judgments, vendors' liens, taxes which are a lien, whether or not 
presently due and payable, and similar encumbrances will ordinarily be 
the same as for easements costing in excess of $1,000.
    (2) In unusual circumstances, these requirements need not be applied 
if the purchase price of the easement is insufficient to satisfy the 
liens and interest, or the amount of such liens or interest is small in 
comparision with the value of the land in which the easement is being 
acquired, and in comparison with the cost of condemnation proceedings to 
clear the title. In such cases, the Division or District Engineer (or 
the Chief, Real Estate Division, if delegated such authority) may waive 
such title infirmities as he determines will not interfere with the use 
of the easement by the Government or jeopardize the interests of the 
United States: Provided:
    (i) The easement deed contains a general warranty covenant by the 
grantor to satisfy all such unpaid taxes and other liens and to warrant 
the title against any encumbrances or interests left outstanding.
    (ii) The Division or District Engineer (or the Chief, Real Estate 
Division, if delegated the authority) has determined that such 
outstanding liens, encumbrances, or interest, if left outstanding, will 
not interfere with the Government's use of the easement, or will not 
jeopardize the interests of the United States, and in his opinion the 
title is sufficient. A certificate to this effect should be attached to 
the Final Title Assembly.
    (c) Curative Action. (1) Curative action will be initiated promptly 
in all cases to eliminate all title defects or encumbrances, except 
those which may be administratively waived, those which may be 
eliminated by the payment of money and cleared at the time of closing, 
and those which may be waived as hereinafter provided. Curative material 
need not be recorded, however, until the closing of the transaction.
    (2) All encumbrances, defects, outstanding interests, and other 
matters shown in the preliminary certificates of title or interim 
binders, must be cured and eliminated before delivery of the purchase 
check, except those of a nature which have been waived as not 
interfering with the Government's use of the easement or as not 
jeopardizing the interest of the United States.