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Do You Own Your Minerals?

By carrillojm65344, Sep 6 2016 10:26PM

By: Stephen L. Parker.

With the resurgence of oil and gas production in Texas at the turn of this century, savvy real estate buyers and sellers know the inclusion—or exclusion—of the mineral rights can be a valuable bargaining chip. Most sellers, however, do not know exactly how much of the minerals they actually own. Unlike a house and the land upon which it sits, buyers are not able to visually inspect the minerals, and title companies do not insure the mineral rights.

Consequently, when a seller does not reserve all the minerals in a real estate transaction, buyers often do not know how much of the minerals they acquire, if any. Often during closings, buyers ask their title agents how much of the minerals they received, and their answers are usually somewhere along the lines of the title company does not insure the minerals, but you can hire an attorney to check for you. Unlike the surface estate, the minerals are intangible and often severed, sold, forgotten, and devised into multiple fractions. Most buyers would not consider buying one-half of a house, but buying one-half of the minerals is common.

Determining who owns the minerals on a tract of land requires research all the way back to the first transaction from the State of Texas to include all mineral reservations and conveyances. For example, I once saw a reservation for one-half the minerals on a tract of land from the 1920s in Wise County, and while the grantor likely intended to reserve any future gold or silver found on the property, it was a valid reservation of the oil and gas. Understandably, title companies do not have the time or resources to do this type of research for each of their countless monthly closings. This is something we can do, however. As a seller, knowing how much of the mineral estate you own puts you in a better bargaining position. And as a buyer, knowing whether a tract of land includes the minerals is particularly important because the mineral estate is dominant to the surface estate. Please let us help you answer with confidence the next time someone asks you whether you own your minerals.

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