Cary Dietzmann

A Country Life Real Estate,LLC
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Mineral Rights?

May 10th, 2019

If your contemplating a rural property purchase in Texas, the ownership and status of that properties mineral estate will eventually come up.  You should memorize one thing in association with Minerals and a land purchase.  CONSULT AN OIL AND GAS ATTORNEY!

First time buyers of central Texas land for sale, often assume that the minerals under the parcel of land they wish to buy automatically "come with the land".  Nothing could be farther from the truth.  The minerals associated with a parcel of land are held as a separate "Interest" in the land that can, and have often, been previously severed from the land or "Surface Estate".

So when purchasing land you are dealing with two separate and distinct "ESTATES", the "Surface Estate" and the "Mineral Estate".

This means the "Mineral Estate" associated with the parcel of land you are interested in could have be previously severed from the "Surface Estate".  E.G. no minerals what so ever exist.  ZERO - 0 - NONE are available for negotiation.  or  The "Mineral Estate" could have been previously partially severed.  E.G. "Something" associated with the mineral estate may be available for negotiation.  or  The "Mineral Estate" could be 100% intact and available or not available for negotiation with the seller. 

Most landowners want to retain their mineral interests, while most buyers want to acquire as much of the mineral interests as possible... Notice I now refer to the Mineral Estate as "Interests" in reference to "Something" mentioned above.  That is because the Mineral Estate is composed of multiple Interests!  Examples include; (1) the actual minerals themselves, the Oil, Gas, Uranium, etc., (2) the royalties associated with those minerals, (3) Executive Rights associated with (1) and (2), and there is still more division of the mineral estate!  CONSULT AN OIL AND GAS ATTORNEY!

No matter the status of the Mineral Estate, if in tact, or severed from the Surface Estate, in Texas the Mineral Estate is the DOMINATE ESTATE!  Meaning the Surface Estate exists for the benefit and use of the Mineral Estate!!!!!

As a land buyer your primary concern is going to be in regards to "SURFACE RIGHTS" in association with the Surface Estate.  In general if their is an "Existing/Current/Active" mineral lease on a parcel of land, then most likely their are NO SURFACE RIGHTS available to be had...

This does not mean you cannot enjoy the land if you purchase it.  But it probably does mean you won't want to invest in a lot of $$$ improvements because the future impact of any mineral production could greatly detract from the improvements you made to the surface!

If the Minerals are important to your purchase decision, find out as much information about the mineral estate associated with the parcel of interest early in your property research.  You may need to hire a LANDMAN to research the true ownership of the mineral estate.

Visit - MINERALS, SURFACE RIGHTS, and ROYALTY PAYMENTS by Judon Fambrough, Senior Lecturer and Attorney at Law with the Texas A&M University Real Estate Center

As a Central Texas Farm & Ranch Real Estate Broker I have witnessed many misleading, confusing and often error filled  conversations between buyers and real estate practitioners regarding minerals.

They say if you hear something three times you remember it... CONSULT AN OIL AND GAS ATTORNEY!

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Disclaimer : The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Houston Association of REALTORS®

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