Drilling Rigs
Mineral Rights are a hot topic in Texas and specifically, Tarrant and Denton counties. Whether you are a Buyer or a Seller in these areas, you need to protect yourself. Here’s a map of the Barnett Shale area and other info http://blumtexas.blogspot.com/
In many cases, home owners don’t know if they own the mineral rights beneath their property. In the contract when you purchased your home, it may not have explicitly stated whether or not you were buying the mineral rights with the property. In contracts written by the Texas Association of Realtors, as of Dec 2008, there is not an explicit statement. However, if not stated to the contrary, mineral rights, if owned by the Seller, are considered part of the real property and do convey to the new Buyer.
What the Seller may not know, however, is whether or not the rights were transferred when they purchased the property, when previous owners transferred the property, when the original developer transferred the property to the first homeowener or whether one of the original land owners transferred or retained mineral rights when selling to later land owners or the developer! Who in the heck owns them???
Confusing? You bet! And the oil and gas representatives who contact the current homeowner and ask them if they want to sell/lease their mineral rights don’t know either! But before any checks are sent to anybody, they do the research, that may cost an individual $500-$1000 for a Title Company (Stewart Title, Hexter-Fair…) to do, to determine if in fact the current homeowner owns the mineral rights. If they don’t, the lease contract the current owner signed is null and void and they will try to find that actual owner of the mineral rights who can still lease/sell them and be paid an upfront check and royalties, even if they don’t own the home above it. Don’t worry, the activity is going on 1 mile below the surface and at some distance away from your home, regulated by your local city, and does not disturb or damage anything on the surface. If it is open land, that drilling platform can go anywhere, as long as it is not within that regulated distance from a home.
So, if you are a Buyer, you want to make sure mineral rights aren’t excluded in some special provision area. If not excluded, they are sold/conveyed with the property to you.
If you are a Seller, you may want to retain the mineral rights by putting a statement in the Special Provisions section, stating that the mineral rights, if any are owned by the Seller, are retained by the Seller. That way, if you own them, you keep them. If you don’t own them, you can’t sell them with the property. And it points out that you don’t know if you do. We have seen intense negotiations regarding mineral rights that have almost killed deals and neither the Seller nor the buyer even know if the Seller has them.
More on this topic later…I need to check and see if our current contract is going to be settled over the doggone mineral rights!