How does it work with oil, gas, and mineral rights in regards to selling property?
I am trying to sell vacant land and I have someone asking whether the OGM’s come with the property.
To be frank, is there a reason that they wouldn’t come with the property?
I can tell you that in Texas when a seller sells a home or vacant property the standard contract calls for the buyer to receive all rights that the seller has- even if they are not named. If later on solar or air rights become valuable then they would have also passed. But years ago several landowners sold all or most of their mineral rights and since the seller does not own them the buyer would not receive them.
Tracking down who owns mineral rights in Texas involves a separate search than a title insurance policy or title search. It involves a guy called a "land man". They search thru the records and determine who owns what. Our title companies here have specifically said they will not guarantee who owns any mineral rights. Your state may have a different setup.
Some people here when they sell their property they keep the mineral rights (and maybe have to sell the property a little cheaper to offset it).
February 25th, 2010 at 6:24 am
Yes – they’re owned by the state, and there are other controls over what you can do with a property.
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February 25th, 2010 at 6:30 am
I can tell you that in Texas when a seller sells a home or vacant property the standard contract calls for the buyer to receive all rights that the seller has- even if they are not named. If later on solar or air rights become valuable then they would have also passed. But years ago several landowners sold all or most of their mineral rights and since the seller does not own them the buyer would not receive them.
Tracking down who owns mineral rights in Texas involves a separate search than a title insurance policy or title search. It involves a guy called a "land man". They search thru the records and determine who owns what. Our title companies here have specifically said they will not guarantee who owns any mineral rights. Your state may have a different setup.
Some people here when they sell their property they keep the mineral rights (and maybe have to sell the property a little cheaper to offset it).
References :
February 25th, 2010 at 7:16 am
You can reserve the mineral rights when you sell your property. The new owner wants to know if you are reserving them or allowing them to transfer to the new owner.
I know in parts Pennsylvania there is a huge natural gas field called the Marcellus Shale. The owner of the mineral rights has the right to grant Oil, Gas and Mineral Leases and has the right to share in production from a producing oil or natural gas well.
I always recommend reserving the mineral rights. Since property is valued independently of mineral rights, reserving them should not affect the sale of the property. It is a simple process to reserve them, you simple add a mineral reservation clause to the conveying document.
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Petroleum Landman
February 25th, 2010 at 7:42 am
Holy smokes! If you are the current mineral owner, you’d be smart to hold onto them. Previous owners of your property may have reserved part or all of the minerals before they sold the land. So, the only way to be sure is to run the title back to its ‘patent.’ Leases are currently being negotiated in PA (between mineral owners and oil companies) and certain aspects of he lease can result in a little or a lot of cash for you.
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