DEPARTMENT OF THE TREASURY 

EXECUTIVE OFFICE FOR ASSET FORFEITURE 

DIRECTIVE NO. 3 

DATE: March 23, 2017 

SUBJECT: Occupied Real Property Subject to Civil or Criminal Forfeiture, and Post-Forfeiture 

Occupancy 

1. PURPOSE. This Department of the Treasury Execulive Office for Asset Forfeiture (TEOAF) Directive 

No. 3 establishes Treasury policy for occupied real property subject to civil or criminal forfeiture, including: 

(a) when the general rule of occupancy applies; (b) when the seizure or real property prior to the entry of 

a final order of forfeiture is permissible; and (c) the limited circumstances in which the removal of 

occupants may be sought. This Directive also provides guidance to agencies seeking to obtain 

occupants post-forfeiture, and establishes preferred methods of eviction when removal is warranted. 

2. SCOPE. This Directive applies to all seizing agencies participaling in the Treasury Forfeiture Fund 

(TFF) and TE OAF. 

3. POLICY. Except in limited instances and with judicial approval, the Civil Asset Forfeiture Reform Act 

of 2000 (CAFRA) generally does not allow the seizure of real property prior to the entry of a final order of 

forfeiture. See 18 U.S.C. § 985(d)(1) and (2). CAFRA mandates that, as a general rule, the United 

States allow owners or occupants of real property subject to a pending forfeiture action to remain in the 

property. See 18 U.S.C. § 985(b)(1)(B). 

4. SEIZING AGENCY RESPONSIBILITIES. The seizing agency is responsible for: arresting property 

subject to forfeiture; serving notice; filing complaints and lis pendens as needed; determining when it is 

necessary to enter into an occupancy agreement and entering into, and overseeing, such agreements; 

ensuring that occupants of real property comply with the terms of this Direclive and any applicable 

occupancy agreement; determining non-compliance with any occupancy agreement, and seeking 

removal of occupants as necessary and/or seizing property upon proper coordination with the applicable 

United States Attorney's Office (USAO). 

5. GUIDANCE. 

A. The General Rule of Occupancy in Civil Cases 

(1) Arresting real property without taking actual possession 

Pursuant to CAFRA, the Government initiates a civil forfeiture of real properly by filing a complaint for 

forfeiture and posting a notice of the complaint on the property. The seizing agency or other authorized 

officer must also serve the property owner with notice and a copy of the complaint.' See 18 U.S.C. § 

985(c). This process establishes the jurisdiction of the Court. The simultaneous filing of a complaint and 

a lis pendens should also occur to prevent the transfer or encumbrance of the real property subject to 

forfeiture. 

1 Per CAFRA, 18 U.S.C. § 985(c)(3), the court does not need to issue an arrest warrant in rem if the post and walk 

process has been followed. 
(2) Requirements for the general rule of occupancy in civil cases 

As a general rule, existing occupanls of real properly (occupants who existed prior lo the Government's 

knowledge of, or interest in, the occupied properly) subject to forfeiture shall be permitted to remain in the 

properly prior to the entry of a final order of forfeiture. When this general rule applies, the seizing agency 

shall enter into an occupancy agreement with any existing tenant(s) or owner(s) upon taking custody of 

the occupied property, which shall be no later than 5 business days from the custody dale. (See 

Attachment A for a sample occupancy agreement.) The terms of an occupancy agreement should 

specify that occupancy shall cease once the property is finally forfeited. In limited instances and subject 

to approval by TEOAF's Real Property Team, an occupancy agreement with an existing tenant may be 

extended beyond the dale of entry of a final order of forfeiture if the interests of the Government will be 

served. 

As a general matter, tenants will not be sought post-forfeiture since TEOAF's primary objective is to 

promptly sell, rather than rent, forfeited properly. However, subject to the approval of TEOAF's Real 

Property. Team and in limited instances, a seizing agency may permit post-forfeiture occupancy for new 

tenants. (See section 5.D. below.) 

(3) General terms of occupancy agreements 

Whether occupants come into existence before or after real property becomes subject lo forfeiture, or 

after real property has been finally forfeited, all occupants must comply with the following requirements: 

(a) Maintain the property, including but nol limiled lo keeping the premises in a slate of good repair or in 

the same condition as existed al the time of seizure, paying for all utilities or other expenses related to the 

properly incurred while occupying said property, and continuing to make any monthly payments due to 

lienholders or timely rent payments to the properly custodian if the occupants are tenants; 

(b) Refrain from engaging in illegal activity; 

(c) Ensure that continued occupancy does not pose a danger to the health or safety of the public or a 

danger to law enforcement; 

{d) Ensure that continued occupancy does not adversely affect the ability of the Government to manage 

the property; 

(e) Allow the Government to make reasonable periodic inspections of the property with adequate and 

reasonable notice to the occupants; and 

(f) Agree lo vacate within a reasonable lime, usually 30 to 60 sixty days, upon notice from the 

Government that the property is forfeited by a final order of forfeiture, or some other reasonable date or 

timeframe to be established by the Government. 

B. Exception to the General Rule of Occupancy In Clvll Cases: Seizure of Real Property Prior to 

Forfeiture 

Seizure of real properly prior to the entry of a final order of forfeiture is permissible only when: 

(1) The Government notifies the court that it intends to seize the property prior lo trial and the court 

conducts a hearing in which the properly owner has a meaningful opportunity to be heard. See 18 U.S.C. 

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§ 985(d)(1)(8)(i). At such a hearing, the Government must establish probable cause to believe that the 

property is subject to forfeiture; or 

(2) The Government can show that exigent circumstances warrant the seizure. See 18 U.S.C. § 

985(d)(1)(ii). To establish exigent circumstances, the Government must prove that less restrictive 

measures such as a lis pendens or restraining order would not protect the Government's interests in 

preventing the sale, destruction or continued unlawful use of the real property. See 18 U.S.C. § 

985(d)(2). If the property is seized under exigent circumstances without a hearing, there must be a 

prompt post-seizure hearing. See 18 U.S.C. § 985(e). 

Agencies shall consult with the USAO prior to seeking seizure of real property. Generally, many of the 

factors that support seizure of real property prior to forfeiture would also support removal of occupants. 

C. Occupancy in Criminal Forfeiture Cases 

In most instances, a seizing agency shall enter into an occupancy agreement in accordance with this 

Directive upon entry of a prelimiriary order of forfeiture whenever real property is subject to criminal 

forfeiture. A separate occupancy agreement is not required, however, if a court has entered a protective 

order pursuant to 21 U.S.C. § 853(e), and the requirements set forth In the order include those set forth in 

the sample standard occupancy agreement. (See Attachment A) 

D. Post-Forfeiture Occupancy 

As a general matter, tenants will not be sought post-forfeiture since TEOAF's primary objective is to 

promptly sell, rather than rent, forfeited property. However, subject to the approval of TEOAF's Real 

Property Team and in limited instances, a seizing agency may permit post-forfeiture occupancy prior to 

disposal of the forfeited property. 

It is permissible to allow a tenant obtained post-forfeiture to enter into a privately drafted, standard lease 

agreement. However, if such an agreement is entered into, as opposed to the standard governmentdrafted occupancy agreement, it is the agency's responsibility to ensure that the interests of the U.S. will 

be adequately protected, and that any tenant agrees in writing, at a minimum, to comply with the 

requirements set forth in section 5.A(2)(a) through (f) of this Directive. The agreement may be drafted as 

an addendum to the privately drafted lease agreement, and should specify both the requirements of this 

Directive as well as potential penalties for any violation. Specifically, if these requirements are not 

complied with, a cause of action may arise pursuant to various federal statutes including 18 U.S.C. § 

2232, the penalties for which are a $250,000 fine for individuals and a $500,000 fine for corporations, a 

five year term of imprisonment or both. 

It is the seizing agency's responsibility to ensure that all tenants acquired post-forfeiture enter into an 

occupancy agreement prior to such tenants taking physical custody of a forfeited property. 

E. Removal of Occupants, Whether or Not the Property Is Seized or Forfeited 

Immediate removal of all occupants (regardless of whether the property is seized or forfeited) should be 

sought if there is reason to believe that failure to remove the occupants will result in one or more of the 

following: (1) danger to law enforcement officials or the public health and safety; (2) continuation of illegal 

activity on the premises; or (3) interference with the Government's ability to manage and preserve the 

property. 

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When seeking to remove occupants from seized or forfeited real property, removal should be based, 

whenever possible, upon Federal court orders or Federal laws such as 18 U.S.C. § 2232 or 18 U.S.C. § 

2233. In the event that such orders or laws are either inapplicable or not supported by the USAO, state 

eviction processes must be instituted and the agencies must comply with all state and/or local laws. 

(1) Danger to the health and safety of the public or to law enforcement 

Reason to believe that leaving occupants in possession will result in danger to the health and safety of 

the public or to law enforcement may be based upon any of the following factors: 

(a) Nature of the illegal activity: 

(b) Presence of weapons, "booby traps," or barriers on the property; 

(c) Information that occupants will intimidate or retaliate against cooperating individuals, neighbors, or 

law enforcement personnel: 

(d) Presence of serious safety code violations; or 

(e) Contamination by, or presence or, dangerous chemicals. 

(2) Continued use of the property for Illegal activities 

Reason to believe that leaving occupants in possession will result in continued use of the property for 

illegal activities may be based upon any of the following factors: 

(a) Nature of the illegal activity (e.g., repetitive drug sales; hide-out for persons at the property violating 

probation, parole, or bail pending trial on other criminal charges); 

(b) History of the property's and/or occupant's involvement in illegal activities; 

(c) Evidence that all occupants have been involved in the illegal activity; 

(d) Inability of non-participating occupants to prevent continued illegal activity; or 

(e) Failure of other sanctions to stop illegal activity. 

(3) Interference with the Government's ability to manage and preserve the property 

Reason to believe that leaving occupants in possession might undermine the Government's ability to 

manage or preserve the property may be based upon the factors set out above or information that the 

occupants intend to waste or destroy the property. 

Note: The above list of circumstances is not intended to be exclusive. Investigative agencies, their 

counsel, or the USAO may find other circumstances justifying immediate removal of the occupants based 

upon demonstrable and articulable information provided by credible sources. 

Where real property is not yet forfeited, and tenants are to be removed in accordance with this Directive, 

consideration should be given to executing an interlocutory sale of the property if it is in the best interest 

of the Government. Any outstanding liens and mortgages should be considered in this determination. 

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F. Rental Income 

If rental income is being generated prior to entry of a final order of forfeiture, such income shall be 

forwarded to the National Finance Center (NFC) through TEOAF's national seized real property 

contractor from the time the contractor takes custody of the property, absent any court order to the 

contrary. TFF participating agencies shall consult with the USAO to determine when a court order to the 

contrary has been entered, and should promptly notify TEOAF counsel and the contractor to ensure 

proper disposition of funds. 

Rental income generated after the entry of a final order of forfeiture shall also be forwarded to the NFC 

through TEOAF's national seized real property contractor. Except as noted in F(1) below, whether 

generated pre-or post-forfeiture, generally, any rental income received by the NFC will be treated as 

"forfeited miscellaneous property" for accounting purposes, absent a court order to the contrary. The 

proper accounting class codes to be used are IRS CC 881, USSS CC 882 and ICE CC 897. 

(1) Exception for Rental Proceeds Cases Subject to Transfer to the Fund for U.S. Victims of 

State Sponsored Terrorism (USVSST Fund) 

Pursuant to 42 U.S.C. § 10609, forfeitures from certain offenses involving state sponsors of 

terrorism must be deposited into t11e USVSST Fund, not the TFF. Accordingly, rental income 

collected, whether pre-or post-forfeiture, for real properties that were forfeited pursuant to 

such a violation shall NOT be deposited into the TFF. Rather, such funds shall remain in the 

Treasury Suspense Account (TSA) until a determination is made concerning whether they 

must be deposited to the USVSST Fund. 

i. Rental income maintained in the TSA pursuant to this section will be held in class 

code 773. This is the same class code for interlocutory sales and the rental 

income can be separately identified within this class code. 

ii. Agencies should consult with their agency counsel and TEOAF as soon as 

possible If they are working on a case for which the forfeited proceeds or rental 

income may be required to be deposited to the USVSST Fund, i.e. any case 

involving a state-sponsor of terrorism. 

6. AUTHORITY. 18 U.S.C. § 985; 31 U.S.C. § 9705; Treasury Directive 27-03, "Organizations and 

Function of the Office of the Assistant Secretary (Enforcement)"; Delegation Memorandum dated May 19, 

1995, "Technical Correction to EOAF Delegation of Authority"; and Treasury Order 102-14, March 24, 

2007, "Delegation of Authority with Respect to the Department of the Treasury Forfeiture Fund" (or their 

successor documents); 42 U.S.C. § 10609. 

7. INFORMATION CONTACT. Any inquiries pertaining to this Directive should be directed to TEOAF's 

Real Properly Team at (202) 622-9600. 

8. CANCELLATION. TEOAF Directive No. 3, "Seizure of Occupied Real Properly," issued on May 30, 

2014, is hereby superseded. 

9, EFFECTIVE DATE. March 23, 2017. 

/S/ 

John Farley 

Director, TEOAF 

ATTACHMENT A- Occupancy Agreement 

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