0 IOWA DOT Title - Closing - Manual
0 IOWA DOT Title - Closing - Manual
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TITLE & CLOSING UNIT FUNCTION
Acquire real property or property rights by preparing, securing and recording conveyance
documents.
Clear title and disburse funds to appropriate parties to ensure possession and complete the
transfer of property or property rights for highway projects.
Prepare instruments conveying State-owned right of way to cities and counties in fulfillment of
jurisdictional transfer agreements (see Transfer of Jurisdiction Manual).
Perform pre-approval reviews and audits to ensure acceptability of all proposed purchase
agreements.
Prepare and secure all legal documents necessary to clear title and obtain sufficient rights in land
in accord with purchase agreements and current Iowa Land Title Standards.
Close transactions and disburse funds pursuant to the terms and conditions of the purchase
agreement and the Right of Way Bureau's policies and procedures.
Ensure proper retention of all acquisition and conveyance information in the Right of Way
electronic parcel file.
Determine when possession of parcels has been acquired and update the Highway Project
Scheduling System accordingly.
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TITLE REVIEW
Each purchase agreement submitted to the Title & Closing Unit shall be subjected to a title
review prior to being presented for approval. The purpose of this review is to assure that there is
sufficient title evidence to support the owner's claim to the property and they can or will be able
to produce merchantable title necessary to complete the transaction.
A Report of Ownership and Liens is ordered and made available by the Right of Way Design
Unit when each parcel is created. Deed Information is provided if a Report of Ownership and
Liens is not required. The Agent shall review the title information to verify current ownership
and check if any of the following items will affect the proposed acquisition:
Easements, Leases or other Land Use Agreements
Current Contracts for sale of real estate
Mortgages
Judgments and Liens
Divorce Decrees, including child support obligations
Life Estates
Estates/Conservatorships/Trusts
Corporation, Partnership or LLC Ownership
The Report of Ownership and Liens may be several months old at the time of the Agent's review.
Therefore, the Agent should also check online records to see if title has been recently transferred
and make note if any new encumbrances affecting the property have been filed since the date of
the last Report of Ownership and Liens certification. The Agent shall also ensure that a
corporation/LLC is an "active" entity per the Iowa Secretary of State's records. This online
records search may include:
Iowa Land Records https://iowalandrecords.org/
Iowa Courts Online https://www.iowacourts.state.ia.us/
County Assessor site http://www.iowaassessors.com/
County Treasurer site https://www.iowatreasurers.org/
Iowa Secretary of State site http://sos.iowa.gov/
No purchase agreement shall be processed, and no payment shall be requested unless a title
determination has been made which establishes that the sellers or payees can convey
merchantable title or rights in title in accord with the terms and conditions of the proposed
acquisition.
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AUDITING THE PARCEL
In addition to reviewing title, the Agent shall audit the parcel information to ensure that all of the
proposed property rights are properly identified, valued and listed to be acquired, and that all of
the requirements are addressed and agreed upon by all parties (See Title & Closing Parcel
Checklist). Using the parcel information, the Agent should determine:
• Type of Acquisition (Partial or Total) (Fee or Easement)
• Acres or square footage to be acquired
• Excess land identified
• Acquisition in the name of the State, County, or City
• If Easement acquisition - what purpose
• Temporary Easement needs
• Underlying fee to be acquired
• Access rights to be acquired
• Access Location Points
• Entrance information
• Location of Acquisition (i.e. Section, Township, Range, Quarter Quarter (¼ ¼) or
Subdivision, Block, Lot)
• Possible tenants
• How the dollar amount is to be allocated
The Agent shall also review the purchase agreement submitted by the Right of Way Acquisition
Unit to ensure consistency and accuracy regarding the following items:
• County, Project, Parcel, Route
• Seller names and marital status
• Location of proposed acquisition (brief legal description)
• Access Rights acquired
• Payment amount and Performance terms
• Land by Fee Title to whom and acres/square feet
• Underlying Fee Title and acres/square feet
• Permanent Easement for "purpose", to whom and acres/square feet
• Fencing (see Fence Payment Schedule)
• Buildings/Improvements acquired
• Items salvaged back to owner
• All applicable clauses including tenant, temporary easement, entrance locations, etc.
• Proper signatures and acknowledgements, including notary stamp
• All appropriate attachments
NOTE: If any information is found to be incorrect or missing as a result of this audit, notify the
Title & Closing Production Coordinator immediately.
Using the information from the audit described above, the Agent may start filling out the
necessary fields on the Audit and Control Sheet for the parcel, which is then transmitted to the
Right of Way Payment & Audit Unit, along with the purchase agreements and breakdowns, for
the Right of Way Director's approval and signature.
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At this time the W-9 Form from the seller is given to the Title & Closing Production Coordinator
for delivery to the Office of Finance and entry into the Accounts Payable System. The Agent
shall review the W-9 Form to check that all of the necessary information is provided and the
form is complete (see W-9 Form Guidelines).
Each original approved agreement (with breakdown attached) is given to the Right of Way
Payment & Audit Unit to be stored in the Right of Way records room for retention. An electronic
version of each approved purchase agreement is kept in the electronic parcel file (see
ProjectWise File Guide), and a copy is also provided to the seller.
Once the owner's purchase agreement has been recorded, the Agent shall order a title update.
Depending on the nature of the proposed acquisition, an Abstract continuation may be required
instead of an updated Report of Ownership and Liens (see Title Update Requirements).
The title update, to be furnished by an approved abstractor, brings the title information current
through the date of the recording of the agreement. Once received, the Agent shall perform a
final title determination and review. If an Abstract continuation is required, the Agent shall
transmit the updated Abstract to the General Counsel Division of the Department, requesting a
Title Opinion.
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Using the information obtained through the title review and parcel audit, the Agent drafts the
conveyance document, which contains the following segments: (Also see Example below)
1. Heading: This contains required instructional information for the County Recorder and Auditor
under the Iowa Department of Transportation logo. The Heading must be no less than three (3)
inches from the top of the page to be acceptable for recording.
2. Title: Title of the conveyance/form of conveyance.
3. Consideration: The consideration amount is the total value of the lands, rights in land or
improvements being acquired and conveyed and does not include damages. For Deeds conveying
property, this amount determines the amount of transfer tax collected by the County Recorder.
4. Grantor: The party selling the property, including marital status. The name(s) of the grantor
must be precise and in accordance with the title evidence shown in the title review.
5. Granting Clause: The statement of the interest in land to be conveyed. This clause is modified
for the specific type of conveyance (i.e. Quitclaim Deed or Easement). It also includes the
Grantee, which is the purchaser of the property or buyer. This is normally the State of Iowa, but
it may be a City or County depending on what is prescribed in the acquisition agreement and
parcel audit.
6. Statement of Rights Granted: This is the introduction to the Legal Description.
7. Legal Description: Generally, the Land Surveyor provides the legal description which
specifically describes the land that is the subject of the transaction and it is inserted in the
document here. The Legal Description will begin with the general location of the property (¼ ¼,
Section-Township-Range; or Lot, Block, Subdivision, City) and refer to the Acquisition Plat
prepared which is attached as the last page of the conveyance document. The remainder of the
Legal Description is usually constructed as a metes and bounds description, which will
commence at a known point then traverse the boundary of the property through a series of angels
and distances which mathematically describes and encloses the property. The Legal Description
may also be described as a division of the rectangular survey system. This method of description
is particularly applicable when an entire property is being acquired or when a portion of a lot or
block in an urban subdivision is being acquired. In the case of a total acquisition, the description
used in the Abstract should be used.
8. Merger with Agreement: The Purchase Agreement and its corresponding recording information
are listed here with a statement that the conveyance is given in fulfillment of the agreement. All
the conveyance documents are also listed here, which helps link all the conveyance documents
and the agreement together as one parcel.
9. Footer: This is located at the bottom of each page of the conveyance instrument (except the plat
exhibit). It contains important reference to the project, seller name, parcel number and page
number.
10. Damages: The amount of damages is listed here - it is not subject to transfer tax.
11. Exemption: This is a statement of the Declaration of Value Exemption. On smaller deed
transactions, where the consideration (shown in Item 3 above) is under $500.00, or if the type of
conveyance is an Easement, it may also include an exemption from paying transfer tax.
NOTE: The Iowa Department of Transportation is NOT required to furnish a Declaration of
Value or Groundwater Hazard Statement with its conveyance documents (see IC Secs. 428A.1,
428A.2 & 558.69).
12. Warrants of Title/Release of Dower: This is standard language contained in every conveyance
document and protects the interest of the grantee.
13. Date of Instrument: The date the parties sign the conveyance.
14. Signature Block: This must include the typed or printed name of the signor, their title (if not an
individual) and must be signed in blue or black ink.
15. Acknowledgment: This is to be completed by the person notarizing the grantor's signature. It
must include the State and County where the conveyance was signed and the date on which the
grantor signed. The Notary Public then signs the document and affixes their seal. Every
conveyance document must be notarized for it to be recorded.
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The Department normally acquires and accepts several types of conveyances. The rights or
interests to be acquired determine what form of conveyance should be used. Also, the type of
seller, the seller's relationship to title and the type of interest to be acquired are all factors that
determine the type of conveyance document to be employed. The most common forms of
conveyance are:
Warranty Deed - A deed in which the grantor warrants the title against defects
arising at any time, either before or after, the grantor obtained his interest in the
land. It assures that the grantor is the true owner, has the right to pass title and
guarantees the title to be merchantable. This is the most common type of deed and
is used to convey fee simple interests of any type.
Quitclaim Deed - A deed in which the grantor is merely transferring and releasing
to the grantee whatever interest the grantor has in the property, if any. The grantor
does not warrant the title. This type of deed is normally used when the question of
adverse possession arises or when acquiring interests from public agencies.
Access Rights Deed - A deed in which the grantor only transfers their right of
access to real estate, usually from prescribed Station to Station. NOTE: When
access control is acquired along with fee title in the name of the State, these rights
are included in the language of the deed (see Access Control Clauses).
Easement - This type of conveyance grants the right to use property for a specific
purpose for an unspecified length of time - thus making it permanent. The grantor
allows the grantee use of the land for this specific purpose, but retains fee title to
the land, referred to as Underlying Fee. An Easement for Public Highway is the
most common form of easement used by the Department, but there are others,
such as Flowage Easement and Permanent Utility Easement that are used as well.
Easements must be executed with the same formalities as any deed and are valued
the same as a fee taking.
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TITLE CLEARING
In addition to preparing conveyance documents, the Agent shall obtain the necessary documents
required to clear title to the land acquired per Iowa Land Title Standards and current Right of
Way policy and procedure. Items necessary for title clearing will be identified in the title review
by the Agent or shown in the Title Opinion provided by the General Counsel Division.
Affidavits
In some cases, an Affidavit of Surviving Spouse or an Affidavit of Possession may be required to
provide clear evidence of title prior to the seller transferring property. These are not very
common.
Easement Holders
When property is encumbered by an easement (other than for public/utility purposes), it is
necessary for the Agent to ensure that the property acquired is released from the encumbrance of
the easement. A Partial Abandonment of Easement or Quitclaim Deed executed by the easement
holder should be used to accomplish this release.
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DISBURSEMENT OF FUNDS
Each approved purchase agreement specifies one or more payment dates. These dates refer to
specific days on which the seller has agreed to tender rights in land or title to the land. The State
has agreed to tender payment in return for the rights or title. These dates control the scheduling
of payments.
Conveyance Payment
Generally, once all the executed conveyance documents have been returned to the Agent, and all
title clearing requirements have been satisfied, the Agent may prepare voucher(s) for payment.
Attention and consideration must be given to any special payment instructions contained in the
acquisition agreement or requested by the seller. Consideration must also be given to any co-
payees to be named on the warrant and any proceeds paid to other parties pursuant to title
clearing requirements.
Possession Payment
Occasionally, payment of a portion of the total contract consideration is contingent upon the
seller surrendering possession of the premises. These payments are handled by the Right of Way
Property Management Unit and usually involve buildings, houses or other improvement that
must be inspected prior to payment. Also, if payment of real estate taxes is required, usually the
County Treasurer is named as a co-payee on this possession check.
CLOSING FORMS
Upon completing the conveyance payment voucher(s), the closing agent shall also prepare and
secure a Closing Statement and Allocation of Proceeds Statement from the seller, if required.
Closing Statement
A Closing Statement is required for all transactions involving the purchase of real property. The
values shown on it are determined by the appraisal and acquisition information provided. This
Closing Statement breaks down the gross proceeds of the sale into Real Estate and Damages.
Real Estate: Any land acquired (by either fee or easement for public highway) is
part of the Real Estate consideration. In addition, any buildings or improvements
are also included in this category. The salvage value of any improvements to be
retained by the seller is also shown on the Closing Statement and subtracted from
the value of said improvement.
Damages: Other items not considered real estate are listed as Damages on the
Closing Statement. These may include payment for fencing, crop reservation,
temporary easement areas and cost to cure items.
The date the Agent signs this form is considered the Closing Date, and in most cases, it is the
date the Agent completes the conveyance payment voucher(s). This date must be accurate, as it
is very important for tax reporting purposes. A copy of the Closing Statement is submitted to the
Title & Closing Production Coordinator for entry into the 1099 tax reporting system (see 1099
Reporting Requirements). The sellers are also provided a copy, as they will use this information
when they file their income tax returns.
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Allocation of Proceeds Statement
If there are multiple fee owners (except in the case of married couples), or if there is a contract
purchaser, an Allocation of Proceeds Statement is necessary for tax reporting purposes. This
statement specifies how much of the gross proceeds of the sale each seller will be claiming on
their taxes. This form is required by the IRS and is sent to each seller for completion at closing.
Once all of the completed Allocation of Proceeds Statements have been returned to the Agent,
they are submitted to the Title & Closing Production Coordinator for entry into the 1099 tax
reporting system.
POSSESSION
Designees of the Department may enter the acquired property and proceed with the project after
payment has been made to the seller or as specified in the Purchase Agreement. If no separate
Possession Payment is required, and the Purchase Agreement specifies that the total contract
consideration is to be paid "on possession and conveyance," the date of possession is three (3)
business days after the warrant has been mailed to the owner.
In some instances, the seller may agree to grant "Immediate Possession" which will be specified
in the acquisition agreement. In these cases, the possession date is the effective date of the
approved agreement.
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APPENDIX A (Checklists/Guidelines/Brochures)
Title & Closing Parcel Checklist (A-1)
Fence Payment Schedule (A-2)
W-9 Form Guidelines (A-3)
Title Update Requirements (A-4)
Access Control Clauses (A-5)
Release Requirements (A-6)
1099 Reporting Requirements (A-7)
ProjectWise File Guide (A-8)
APPENDIX B (Examples/Samples/Templates)
Report of Ownership and Liens (B-1)
Audit and Control Sheet (B-2)
W-9 Form (B-3)
Title Opinion (B-4)
Warranty Deed - Individual (B-5)
Warranty Deed - LLC (B-6)
Warranty Deed - Corporate (B-7)
Quitclaim Deed - Individual (B-8)
Quitclaim Deed - LLC (B-9)
Quitclaim Deed - Corporate (B-10)
Court Officer Deed - Individual (B-11)
Court Officer Deed - Corporate (B-12)
Access Rights Deed - Individual (B-13)
Access Rights Deed - LLC (B-14)
Access Rights Deed - Corporate (B-15)
Trustee Warranty Deed (Inter Vivos) - Individual (B-16)
Trustee Warranty Deed (Inter Vivos) - Corporate (B-17)
Trustee Warranty Deed (Testamentary) - Individual (B-18)
Trustee Warranty Deed (Testamentary) - Corporate (B-19)
Individual Trustee's Affidavit (Inter Vivos) (B-20)
Corporate Trustee's Affidavit (Inter Vivos) (B-21)
Individual Trustee's Affidavit (Testamentary) (B-22)
Corporate Trustee's Affidavit (Testamentary) (B-23)
Purchaser's Affidavit (B-24)
Easement for Public Highway - Individual (B-25)
Easement for Public Highway - LLC (B-26)
Easement for Public Highway - Corporate (B-27)
Trustee Easement for Public Highway (Inter Vivos) (B-28)
Trustee Easement for Public Highway (Testamentary) (B-29)
Flowage Easement (B-30)
Permanent Utility Easement (B-31)
Bill of Sale - Individual (B-32)
Bill of Sale - LLC (B-33)
Bill of Sale - Corporate (B-34)
Release of Real Estate Mortgage (B-35)
Partial Release of Mortgage (B-36)
Easement Priority Agreement (B-37)
Satisfaction of Judgment (B-38)
Affidavit of Surviving Spouse (B-39)
Affidavit of Possession (B-40)
Partial Abandonment of Easement (B-41)
Closing Statement (B-42)
Allocation of Proceeds Statement (B-43)
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Appendix A-1
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Appendix A-2
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Appendix A-3
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Appendix A-4
Reports should be no less current than six (6) months prior to the seller's execution of the acquisition agreement. For
minor acquisitions under $5,000.00, an updated report is not necessary if the previous report indicates that the
property is not encumbered, however, online resources should be checked prior to closing to ensure no new
encumbrances or title changes have appeared of record.
For "temporary easement only" acquisitions under $5,000.00, a report is not required. However, online resources
should be checked prior to closing to ensure no title changes have appeared of record.
ABSTRACTS:
• Total Acquisition
In the case of a total acquisition, the acquisition agreement shall require delivery of an abstract on all but
minor parcels. For this purpose, a minor parcel is any parcel (except an urban lot) where the land to be
purchased is of one acre or less or where the appraised fair market value of the land is $10,000 or less.
Abstracts shall also be obtained on any minor parcel containing excess land. Extraordinary circumstances
should be discussed with the Supervisor.
The Agent shall have the abstract updated by a local abstractor after execution of the acquisition agreement,
and the abstract will be retained by the DOT after closing.
If the seller cannot provide an abstract, the Agent shall request a Root of Title Abstract from the abstractor,
which will be retained by the DOT after closing.
• Partial Acquisition
In the case of a partial acquisition, the acquisition agreement shall require delivery and loan of an abstract
where the transaction totals $75,000.00 or more. Abstracts shall also be required for transactions of lesser
amounts where the parcel contains excess land.
The Agent shall have the abstract updated by a local abstractor after execution of the acquisition agreement,
and the abstract will be returned to the seller after closing.
If the seller cannot provide an abstract, the Agent shall request a Root of Title Abstract from the abstractor.
After closing, the seller will be given the option to receive the abstract, after paying 50% of the cost of the
abstract to the DOT.
• Minor Acquisition
Abstracts may be required on minor parcels for either total or partial acquisitions when title to the parcel is
unusually encumbered. Such requests shall be supported by a judgment that the status of title is such that
normal closing procedures do not appear to give reasonable assurance of the receipt of a sufficient
ownership interest to support highway construction.
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Appendix A-5
ACCESS CONTROL CLAUSES
All rights of direct access between Primary Road No. ____ and grantor’s property abutting thereon in the ___¼ ___¼ Sec.
___, T__N, R__W, _____ County, Iowa, from Sta. __± (Property Line) to Sta. __± (Property Line), on the __ side.
All rights of direct access between Primary Road No. ____ and grantor’s property abutting thereon in the ___¼ ___¼, Sec.
___, T__N, R__W, _____ County, Iowa, from Sta. __± (Property Line) to Sta. __± (Property Line), on the __ side.
Grantee hereby permits access at Sta. ____ on the ____ side of Primary Road No. ____.
It is agreed between the Grantor and the Grantee that the access point located at Sta. ____, now identified as Sta. _____,
on the _____ side of Primary Road No. ___, reserved in a certain Warranty Deed /Condemnation Proceeding recorded in
the ___ County Recorder's Office on ____, 19__, at Book __, Page __ , is hereby eliminated, and conveyed in fee simple
title to the State of Iowa.
It is agreed between the Grantor and the Grantee that the access point located at Sta. ____, now identified as Sta. _____,
on the _____ side of Primary Road No. ___, reserved in a certain Warranty Deed /Condemnation Proceeding recorded in
the ___ County Recorder's Office on ____, 19__, at Book __, Page __ , is hereby eliminated, and conveyed in fee simple
title to the State of Iowa.
Grantee hereby permits access at Sta. ____ on the ____ side of Primary Road No. ____.
REVISION: Previously reserved entrance has a revised station number (not needed, but FIP):
Grantee shall continue to allow access at Sta. ___, now identified as Sta. ____, on the ____ side of Primary Road No. ____,
which was reserved in a certain Warranty Deed/Condemnation Proceeding recorded in the ___ County Recorder's Office on
____, 19__, at Book __, Page __.
It is agreed between the Grantor and the Grantee that the right of controlled access between Primary Road No. ___ and
Grantor's property abutting thereon in the __ ¼ __ ¼ of Sec. __, T__N, R__W of the 5th P.M., __ County, Iowa, acquired in
a certain Warranty Deed/Condemnation Proceedings recorded in the ___ County Recorder's Office on ___, 19__, in Book
___, Page ___, is hereby amended as follows:
Grantee hereby permits access at Sta. ____ on the ____ side of Primary Road No. ____.
No rights of direct access shall be permitted between Primary Road No. ____ and grantor's property abutting thereon in the
___¼ ___¼, Sec. ___, T__N, R__W, _____ County, Iowa.
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Appendix A-6
RELEASE REQUIREMENTS
• Total Acquisition
All mortgages, judgments and liens shall be paid in full out of the seller's proceeds and a released
of public record.
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Appendix A-7
NOTE: Gross Proceeds as shown on the Closing Statement, which includes abstracting payment.
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Appendix A-8
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Appendix B-1
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Appendix B-2
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Appendix B-3
W-9 Form
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Appendix B-4
Title Opinion
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Appendix B-5
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Appendix B-6
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Appendix B-7
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Appendix B-8
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Appendix B-9
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Appendix B-10
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Appendix B-11
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Appendix B-12
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Appendix B-13
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Appendix B-14
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Appendix B-15
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Appendix B-16
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Appendix B-17
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Appendix B-18
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Appendix B-19
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Appendix B-20
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Appendix B-21
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Appendix B-22
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Appendix B-23
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Appendix B-24
Purchaser's Affidavit
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Appendix B-25
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Appendix B-26
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Appendix B-27
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Appendix B-28
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Appendix B-29
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Appendix B-30
Flowage Easement
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Appendix B-31
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Appendix B-32
Satisfaction of Judgment
Affidavit of Possession
Closing Statement