[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: 32CFR644.70]

[Page 154-160]
 
                       TITLE 32--NATIONAL DEFENSE
 
              CHAPTER V--DEPARTMENT OF THE ARMY (CONTINUED)
 
PART 644--REAL ESTATE HANDBOOK--Table of Contents
 
                         Subpart C--Acquisition
 
Sec. 644.70  Closing of cases.

    (a) Closing and Settlement Officers. Payment and closing of cases 
will be initiated immediately upon completion of curative action, by 
qualified Closing Officers employed by the Corps of Engineers. To be 
qualified, a Closing Officer must be employed in the Real Estate 
Division of a Division or District Office, or in a Real Estate Project 
or Suboffice, in an Attorney-Advisor position, or in a Realty Officer 
position if he is a member in good standing of the Bar of a State, 
Possession, or the District of Columbia, and has been instructed in 
Federal procedure and in the requirements for closing land acquisition 
transactions by a Division or District Closing Officer and has been 
approved by the Division or District Engineer to close land acquisition 
transactions independently. It is no longer necessary for Closing 
Officers to be individually bonded. Contracting for closing services 
will require prior approval of HQDA (DAEN-REA-P).
    (b) Payment. Payment for land, or interests therein, will be made 
from funds available to the Division or District Engineer.
    (c) General. The details of the closing necessarily differ according 
to the number of vendors and the outstanding interests, the number and 
variety of the encumbrances and title objections to be met, and 
miscellaneous other details resulting from complications in the 
particular title. Upon receipt of the check and title papers, the 
Closing Officer will review the entire file relating to the acquisition, 
fully acquaint himself with the terms and conditions of the sale, and 
with the condition of the title, and will ascertain whether there are 
any special conditions to be performed, or requirements to be met, on 
the part of the landowner or the Government and what objections to the 
title are to be eliminated before valid title may vest in the United 
States.
    (d) Curative Data. The Closing Officer will determine the character 
and

[[Page 155]]

amount of all outstanding interests in, liens on, or claims against the 
land, which are to be satisfied out of the purchase price, and see that 
necessary curative action has been taken and curative data obtained to 
cure all defects in and meet all objections to the title. If the title 
evidence consists of a certificate of title of a title company, or a 
title guarantee policy, approval of the curative material, obtained to 
eliminate the title objections, must be obtained from the title company.
    (e) Continuation of Title Search. The Closing Officer will satisfy 
himself that no change has occurred in the land records from the date of 
the prior certification which will adversely affect the title to the 
real estate interest being acquired by the United States. Where deemed 
appropriate because of the complexities of the title, the amount of the 
purchase price, or other reason, the local representative of the title 
company or the abstracter will be requested to examine the title records 
for the purpose of making this determination, and a continuation of the 
title evidence should be obtained, if considered necessary. Otherwise, 
the interim title search may be made by the Closing Officer.
    (1) If no adverse change in the status of title has occurred since 
the date of the preliminary or the latest certification of the title by 
the abstracter or the title company, as the case may be, the Closing 
Officer will proceed to close the case.
    (2) In case of change in ownership during the period, the Closing 
Officer will order a continuation of the abstract or an intermediate 
certificate of title or interim binder, as the case may be, and take 
such action as necessary to cure the title.
    (f) Payment and Closing Sheet. ENG Form 1566, Payment and Closing 
Sheet and Receipt for United States Treasurer's Check, covering all 
charges to be eliminated by payment of money to be deducted from the 
purchase money check, will be prepared in advance of closing. This sheet 
will show, in detail, all disbursements of the purchase money, including 
all amounts to be expended for satisfaction of:
    (1) Taxes and assessments.
    (2) Outstanding judgments--State and Federal.
    (3) Mortgages, deeds of trust, and other liens.
    (4) Amounts received under any contract or bond.
    (5) Landowner's balance after all charges are deducted from the 
purchase price.
    (g) Division or District Inspection of Premises. The Closing Officer 
or other authorized Division or District employee will personally make 
an inspection of the premises to ascertain whether any person is 
occupying the property in whole or in part.
    (1) The Closing Officer or an authorized Division or District 
employee will prepare ENG Form 798, Certificate of Inspection and 
Possession.
    (2) If any person other than the vendor is found in possession, the 
Closing Officer will secure a disclaimer on ENG Form 1290, Disclaimer. 
The disclaimer will be modified to make allowance of any provision in 
the offer to sell permitting possession after closing.
    (3) The Closing Officer or an authorized Division or District 
employee will check to determine that the buildings, improvements, and 
crops listed on the appraisal report are still on the land being 
conveyed. Where buildings, improvements, and crops have been reserved by 
the landowner, it will be determined that only the items reserved have 
been removed. Whenever possession of land is surrendered to the 
Government before the time of payment and closing, and immediate 
inspection and report ENG Form 1567, Report on Vacation of Property, 
will have been made. The Closing Officer may rely upon this report for 
the inspection required in the first part of this paragraph unless he is 
aware of circumstances which would make a supplemental inspection and 
report proper. If no such inspection and report have been made and 
possession has been surrendered to the Government, the inspection and 
report must be made at this time.
    (4) The Closing Officer or an authorized Division or District 
employee will determine whether there have been repairs or improvements 
to or construction on the premises which might give rise to mechanics 
liens.

[[Page 156]]

    (5) The ENG Form 798 will be executed and placed with the title 
papers. If executed by an employee other than the Project Manager or 
Closing Officer, it must be approved by the Project Manager or Closing 
Officer, to indicate that the Project Manager or Closing Officer has 
authorized the employee signing the certificate to make the inspection 
and is satisfied it has been properly done.
    (h) Deed to the United States. (1) The deed to the United States 
will be drafted in accordance with the ``Standards for the Preparation 
of Title Evidence in Land Acquisition by the United States,'' issued by 
the Department of Justice in 1970.
    (2) Where the landowner's name appears in various forms among the 
title papers, full use will be made of the ``also known as'' clause in 
identifying the grantor in the deed to the United States.
    (3) The deed shall contain a quitclaim clause by which the grantor 
quitclaims to the United States all right, title, and interest which the 
grantor may have in the banks, beds, and waters of any streams bordering 
the said land to be conveyed, and also all interest in alleys, roads, 
streets, ways, strips, gores, or railroad rights-of-way abutting or 
adjoining said land and in any means of ingress or egress appurtenant 
thereto.
    (4) Recording fees, transfer taxes, and similar expenses incidental 
to conveying real property to the United States; penalty costs for 
prepayment of any preexisting recorded mortgage entered into in good 
faith encumbering such real property; and the pro rata portion of real 
property taxes paid which are allocable to a period subsequent to the 
date of vesting title in the United States, or the effective date of 
possession of such real property by the United States, whichever is the 
earlier, shall be paid by the Government pursuant to authority of 
section 303, Pub. L. 91-646, approved January 2, 1971.
    (i) Satisfaction of Liens and Encumbrances. All mortgages, deeds of 
trust, judgments, mechanics liens, and similar encumbrances will be 
satisfied and released or discharged of record. In the acquisition of 
easements, liens and encumbrances should be satisfied, released or 
subordinated to the Government's easement, except as provided in 
Sec. 644.69(a) or unless administratively waived under Sec. 644.69(c).
    (j) Payments to Tenants and Lessees. Amounts due lessees, or other 
tenants, under ENG Form 1564, Consent to Offer to Sell, will be paid 
from the purchase price or by the landowner direct. In either case, 
proper receipts and releases will be obtained.
    (k) Satisfaction and Release of Liens of Taxes and Assessments. (1) 
Except as provided in Sec. 644.69(b) and paragraph (k)(6) of this 
section, all taxes and assessments which, under the law of the State 
where the land is located, are a lien on the property as of the date of 
the delivery and recordation of the deed to the United States must be 
paid at or before closing, unless provision for their payment is made as 
follows:
    (i) Where closing takes place before the completion of the 
assessment and levy of the taxes necessary to the determination of the 
amount of the taxes, or before the taxes are due and payable, a 
sufficient sum will be withheld from the purchase price to satisfy such 
taxes when the amount is later determined or they later become due and 
payable. In cases where the amount of taxes has not been determined, an 
estimate will be made, after consultation with the assessor and 
consideration of the amount of taxes paid on the land for the preceding 
year. The amount withheld should be at least 20 percent in excess of the 
amount of taxes assessed against the property for the preceding year.
    (ii) If the taxes are not due and payable under State law, though 
the amount has been determined at the time of closing, payment will not 
be made to the collector or other official charged with the collection 
of taxes, unless he has authority to accept payment and receipt for them 
in advance of the due date.
    (2) Funds withheld for the payment of taxes will be transmitted 
promptly to the Division or District Engineer in the form of cashier's 
check or money order payable to the Treasurer of the United States, 
unless the taxes are

[[Page 157]]

paid or held in escrow by the title company. The Closing Officer, in 
transmitting such payments, must clearly identify, by name, the vendor 
from whom the tax money was withheld, and must identify the land for 
which the taxes were withheld by its tract number in the project. He 
must also identify the taxes for payment of which the money has been 
withheld by specifying the type of taxes, such as county, city, or 
school. He will set forth the year each became or becomes due and fully 
explain the manner in which payment or withholding has been handled in 
order that proper payment will be effected by the Division or District 
Engineer when the taxes are due and payable. Any balance of the amount 
withheld and not needed to satisfy the taxes will be refunded to the 
grantor.
    (3) Where payment of the taxes is not possible at the time of 
closing and funds are withheld for this purpose, the Closing Officer 
will immediately notify the local tax official that title to the 
particular tract has been conveyed to the United States and that funds 
have been withheld for the payment of taxes, specifying the taxes for 
which an amount has been withheld and stating that such funds are in the 
custody of the Division or District Engineer. In giving such notice, he 
will use ENG Form 894, Notice to Tax Official.
    (4) When the taxes become due and payable, the Division or District 
Engineer will pay such taxes from the funds withheld from the purchase 
price. Any excess between the amount of taxes actually paid and the 
amount withheld will be refunded to the grantor by the Division or 
District Engineer. Refund checks will be transmitted to the grantor only 
after it has been definitely determined that all taxes which were liens 
on the tract are shown as satisfied on the books of the tax collector. 
This is necessary to avoid the possibility of a refund being made before 
satisfaction of all tax liens. The tax receipt should be forwarded to 
HQDA (DAEN-REP-S) WASH DC 20314 for filing with the original title 
papers.
    (5) Where the evidence of title consists of certificates of title or 
title insurance, and funds are withheld for payment of taxes, the amount 
so withheld may be turned over to the title company, provided:
    (i) The title company is financially responsible and will agree to 
issue a final certificate of title or title policy in which no tax liens 
or unpaid taxes will be noted or, if noted, will be followed by the 
statement:

    For the payment of which provision has been made by deposit of a 
sufficient sum with this company.

    (ii) The title company will enter into an escrow agreement with the 
grantor to hold such sum for the satisfaction of the taxes when they 
become due, and to return to the grantor any excess remaining after 
their payment.
    (6) Agreements have been reached with the Department of Justice 
that, in the acquisition of easements, the following will apply:
    (i) No provision need be made for the payment of taxes which are a 
lien but are not due and payable, provided that the purchase price of 
the easement, including severance damage, is not in excess of 50 percent 
of the reasonable value of the entire contiguous property of the vendor. 
In the event the value of the easement has been determined by a ``before 
and after'' appraisal, the amount of the ``after'' appraisal will be 
utilized in making the necessary determination. In the event no such 
appraisal has been made, it will not be necessary to prepare a complete 
appraisal of the value of the contiguous property. In lieu thereof, a 
memorandum estimate by a qualified appraiser (staff or contract) will be 
obtained and placed in the tract file. In either case, the appropriate 
information will be inserted on ENG Form 3536, Statement Concerning 
Outstanding Encumbrances.
    (ii) It will not be necessary to withhold funds for payment of 
current taxes which are due and payable, if the purchase price of the 
easement is insufficient to pay such taxes. In such case, Item 4 of ENG 
Form 3536 and the third block of that form will be completed.
    (iii) ENG Form 3536 will be signed by the Closing Officer and the 
original will appear as a separate document in the Final Title Assembly.
    (l) Payment and Recordation of Deed. (1) No disbursement of the 
purchase price shall be made until:

[[Page 158]]

    (i) A duly executed deed has been accepted;
    (ii) All outstanding charges, liens, or encumbrances on the land 
have been satisfied and discharged, or a sufficient sum has been 
withheld from the purchase price to satisfy and discharge such charges, 
liens and encumbrances; and
    (iii) The title is sufficient for the purposes for which it is being 
acquired, and all objections thereto have been eliminated or 
administratively waived in writing.
    (2) When the requirements of paragraph (l)(i) of this section have 
been satisfied, the balance of the purchase price shall be delivered to 
the landowners.
    (3) The deed and all instruments which release liens or encumbrances 
on the property shall be promptly recorded.
    (m) Closing of Easements Acquisitions--(1) Easement Costing in 
Excess of $1,000. Closing requirements and procedures with respect to 
easements costing in excess of $1,000 are the same as in fee 
acquisitions, except as to mortgages, deeds of trust, judgments, 
vendors' liens, and similar title infirmities (Sec. 644.69(a)), and as 
to taxes which are liens but which are not due and payable (paragraph 
(k)(6) of this section).
    (2) Easements Costing Not in Excess of $1,000. Closing requirements 
and procedures with respect to easements costing not in excess of $1,000 
are the same as a fee acquisition except that title infirmities may be 
waived as provided in Sec. 644.69(b).
    (n) Payment and Closing Under Power of Attorney. Where the landowner 
is unable or unwilling to be present personally or to pay from his own 
funds the amount necessary to satisfy all encumbrances and expenses, the 
following steps may be taken:
    (1) Obtain a power of attorney from the landowner. Standard Form 
232, Power of Attorney by Individual for the Collection of a Specified 
Check Drawn on the United States Treasury, will be used. If the 
landowner is a corporation, Standard Form 236, Power of Attorney by a 
Corporation for the Collection of a Specified Check Drawn on the 
Treasurer of the United States, and Standard Form 237, Resolution by 
Corporation Conferring Authority Upon an Officer to Execute a Power of 
Attorney for the Collection of Checks Drawn on the Treasurer of the 
United States, will be used. The power of attorney will be drawn in 
favor of the Closing Officer making the payment and closing. Immediately 
after the post office address of the Closing Officer, the following will 
be inserted, ``Agent for the Disbursing Officer.'' This insertion must 
be initialed by the person(s) executing the power of attorney. (Above 
forms are available through the local GSA Regional Office.)
    (2) Obtain from the landowner ENG Form 1569, Order to Disburse Under 
Power of Attorney. It will be noted that this form specifically recites 
types of indebtedness or expense, the names of the persons to be paid 
under the power of attorney, and the estimated, but not necessarily the 
exact, amounts thereof. It is important that all items (including cost 
of revenue stamps, recordation fees for curative material, and bank 
service charges) be itemized on the form.
    (3) The Closing Officer then will take the necessary action for and 
on behalf of the landowner to discharge the indebtedness and pay 
expenses under the ENG Form 1569.
    (4) If it is possible to have all interested parties, other than the 
landowner, present at one time and to make all payments simultaneously, 
a round table closing will be conducted. The Closing Officer, under the 
power of attorney and order to disburse, will endorse and cash the 
Treasurer's check and will make the individual disbursements in actual 
cash.
    (5) If it is possible to determine definitely all items of payment 
simultaneously, but it is not possible to have all interested parties 
present at one time, the Closing Officer will, under the power of 
attorney and order to disburse, endorse and cash the Treasurer's check, 
obtain separate cashier's checks for all items of payment (including the 
bank services charge for the issuance of such checks), and deliver the 
checks.
    (6) Where it is not possible to determine definitely all items of 
payment simultaneously, the Closing Officer, under power of attorney and 
order to disburse, will endorse and cash the

[[Page 159]]

Treasurer's check and will obtain separate cashier's checks for all 
items of payment for which disbursements may be properly made and for 
any balance representing the total of any items, the amounts of which 
cannot be definitely determined; in other words, for the residue of the 
amount of the United States Treasurer's check. In every instance, the 
cashier's checks will be drawn to provide for endorsement by the Closing 
Officer or landowner as later determined to be appropriate.
    (7) Curative material which requires recordation will be recorded 
for and on behalf of the landowner and will then be placed with the 
title papers.
    (8) The usual tax receipts, mortgage releases, judgment 
satisfactions, etc., will be obtained for each monetary encumbrance 
which has been discharged. These instruments will be placed with the 
title papers, unless the landowner wishes to retain them.
    (9) Separate receipts on ENG Form 1571, Receipt for Payment Under 
Power of Attorney, must be obtained for each disbursement made under the 
power of attorney and order to disburse, including a receipt for the 
balance of the purchase price paid to the landowner. One copy of such 
receipt will be placed in the project files.
    (10) The Closing Officer will prepare an original and two copies of 
ENG Form 1570, Report of Disbursement Under Power of Attorney, showing 
the exact amount of each disbursement made under the power of attorney 
and order to disburse. The Closing Officer will prepare an original and 
two copies of appropriate certification thereon. The original and two 
copies will be signed by the landowner, who will retain one copy. The 
Closing Officer will place one copy in the files of the project office 
and will place the original with the title papers. The separate receipts 
on ENG Form 1571 for each disbursement made will be attached to the 
original ENG Form 1570.
    (o) Procurement of Check. (1) After acceptance and distribution of 
the offer assembly and the acquisition is ready for closing, the 
following instruments and supporting data will be transmitted to the 
Finance and Accounting Officer for scheduling of SF 1166, Voucher and 
Schedule of Payments, and issuance of check:
    (i) Two true copies of the preliminary opinion of the Attorney 
General, where required; or
    (ii) Two true copies of a preliminary certificate of title or title 
guarantee policy where the preliminary opinion of the Attorney General 
is not required; or
    (iii) Two copies of ENG Form 909, Attorney's Preliminary Certificate 
of Title, in easements acquisition which cost less than $1,000; and
    (iv) Two true copies of other supporting data evidencing amount due 
and payable, such as statement of closing attorney; and
    (v) Two true copies of the offer assembly or deed executed by the 
vendor, if offer form has not been utilized.
    (2) The following statement, appropriately modified, signed by the 
Chief, Real Estate Division, may be transmitted in lieu of the above 
listed certificates:

    I certify that the check requested hereby is to pay an obligation of 
the United States as reflected on the attached (Offer to Sell) (easement 
or deed). I further certify that the parties signatory to this document 
and shown on the voucher as payees are the same parties reflected in a 
preliminary certificate of title issued by the ---------- Title Company 
in the possession of the Real Estate Division of this office. The 
completion of the transaction will be in accordance with existing 
regulations pertaining to the closing of real estate acquisitions.


The landowner's signature on a voucher is not necessary. On payments 
involving civil funds, paragraph 3-7g, ER 37-2-10, will be followed.
    (p) Procedure After Payment. When the above closing requirements 
have been met, the Closing Officer will:
    (1) Immediately order a final continuation of the type of title 
evidence which has been contracted for. The final title evidence must be 
dated as of the date of recordation of the deed to the United States, or 
a subsequent date, to show a valid title vested in the United States of 
America subject only to those title defects which have been 
administratively waived or to those liens and encumbrances for which 
sufficient funds were withheld from the

[[Page 160]]

purchase price to satisfy and discharge them.
    (2) Check carefully ENG Form 1566, Payment and Closing Sheet and 
Receipt for United States Treasurer's Check, to see that funds have been 
properly disbursed.
    (3) Review the continued abstract, final certificate of title, or 
title insurance policy, as soon as they are prepared and determine that 
the proper preliminary and final title evidence and related papers on 
the case have been completed in proper order. Thereupon a Final Title 
Opinion will be prepared.
    (4) Transmit as the Final Title Assembly to HQDA (DAEN-REA-P) WASH 
DC 20314, the Final Title Opinion, title evidence and related papers. 
This Final Title Assembly must be chronologically arranged and securely 
fastened for permanent filing, and should include the following:
    (i) Abstract of title, properly continued through time of closing; 
or preliminary, intermediate, and original of final certificate of 
title; or interim binder and original of the Title Guarantee (Insurance) 
Policy.
    (ii) Curative instruments and material pertaining to title defects 
appearing in the abstract, the final certificate of title, or the title 
guarantee or insurance policy.
    (iii) Deed to the United States, executed, stamped, acknowledged, 
and recorded.
    (iv) Copy of the accepted offer to sell (ENG Form 42 or ENG Form 
2970).
    (v) Completed ENG Form 798.
    (vi) Completed ENG Form 1566.
    (vii) Statement regarding payment of taxes or amount withheld to pay 
the taxes.
    (viii) Where required, completed ENG Form 1290.
    (ix) If the power of attorney procedure is followed, power of 
attorney on proper Department of the Treasury Form and completed ENG 
Forms 1569 and 1571.
    (x) Certified copy of any waiver letter or certificate.
    (xi) Any other papers relating to the title or closing of the case.
    (xii) An additional copy of the deed and the Attorney's Final Title 
Opinion for review by the Attorney General.
    (5) A copy of the executed and recorded deed will be retained by the 
Division or District Engineer for the project files.
    (6) Similar action will be taken by the Closing Officer in 
acquisition of easements costing not in excess of $1,000.