I owned a home and 5 acres with mineral rights to 2.5 of them in Conway county Arkansas. I had to let the property go back to the bank as deed in lieu. We had the rights leased at that tme. I am wondering if we still own those rights.
I am not an attorney, but I would think not. You would lose them in a foreclosure and this should be the same.
The leasing company is still sending us infi and now we are getting inquires on selling the rights. So I was just wondering.
I would guess they are making offers w/o running any title, when they update title it would show up and you might be obligated to pay it back. I would suggest you contact an attorney in your state who is familiar with real estate law and oil and gas law.
I agree with Mr. Loesch. The offer you received was probably from a mass mailing and they would verify title before paying you anything. If they did pay you, the sale paperwork would have likely contained a clause where you agreed to warrant and defend title.
A very smart attorney told me one time that, at least in Texas, one can buy a piece of property with a thirty-year mortgage, sell any portion of the minerals or royalties the very next day, and then, almost thirty years later, miss the last mortgage payment and if the house goes into foreclosure the bank can go back thirty years in time and retrieve those minerals and/or royalties that had already been severed by the homeowner, sold to somebody else, and perhaps re-sold a number of other times! Obviously, this is an extreme example that probably would never happen in the real world, but it makes the point: even 30 years later, a bank CAN "clawback" a mineral interest, at least in Texas. This would not apply if the Seller had obtained a Partial Release of Lien from the bank BEFORE selling the minerals or royalties, or if the mineral or royalty conveyance had been conducted BEFORE the loan was taken.
I have seen more than a few leases lately where the lessor agrees that the lessee can redeem his mortgage or make payments, so I would assume that it happens in other states also.
If the mineral was severed then you probably need a title search - minerals often did not convey and thus may have never been in the original mortgage.
Yes, that's true, if the minerals had been severed BEFORE the mortgage was signed, OR if the Mortgagor never owned the minerals, OR if the Mortgagor did own the minerals but they were not mortgaged (only the surface was), then yes, the minerals could not be "clawed back" by the bank in a foreclosure proceeding.