When residential and commercial real property and businesses are targeted for asset forfeiture, the potential net equity must be calculated. See Chapter 1 of the Asset Forfeiture Policy Manual. If the financial analysis indicates that the aggregate of all liens (including judgment liens), mortgages, and management and disposal costs approaches or exceeds the anticipated proceeds from the sale of the property, the USAO, or in administrative forfeiture actions, the seizing agency, must either (1) determine not to go forward with the seizure, or (2) acknowledge the potential financial loss and document the circumstances that warrant the seizure and institution of the forfeiture action.

In rare instances where preseizure planning is not possible, the seizing agency may be responsible for custody and maintenance of the property until the USMS has had an opportunity to conduct an analysis of the assets. The USMS must complete a preseizure planning questionnaire within 5 business days after the seizure or as soon as practicable given the nature of the information required. If the financial assessment indicates that the aggregate of all liens, mortgages, and management and disposal costs approaches or exceeds the anticipated proceeds from the sale of the property, the USAO must either (1) take action to dismiss the forfeiture action and to void any expedited settlement agreements (if any have been entered into), or (2) acknowledge the potential loss and document the circumstances that warrant the continuation of the forfeiture action.

In deciding how to proceed with the seizure and forfeiture of potential liability seizures during the preseizure phase in judicial forfeitures, the USAO in consultation with the seizing agency and the USMS (and in administrative forfeitures, the agent in charge of the field office responsible for the administrative forfeiture, or designee, in consultation with the USMS) must evaluate and consider the forfeitable net equity and the law enforcement purposes to be served in light of the potential liability issues and estimated costs of post-seizure management and disposition. See Chapter 1 of the Asset Forfeiture Policy Manual ("Net Equity Worksheet").

[updated May 2010]