We just changed the ownership of some family mineral rights from my name to an LLC we created. Everything is signed, and the oil companies we receive royalties from have been notified. Does anyone know if we need to file new deeds at the county for the new ownership name? I asked an attorney that prepared the paperwork for the LLC, and he said it really didn’t matter if we did it at the county or not. He went on to explain why, but it really didn’t make sense and didn’t sound right to me. Anyone have any insight into this?
Yes, you need to do a deed into the LLC. The LLC will not own the interest until it is deeded the interest. You and the LLC are separate owners.
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Thank you Tim. Now I need to find a reputable atty to do it. Thanks again!
Yes, file with EVERYONE. I use George Cowden in San Antonio.
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There are some very good Texas attorneys listed in the directories above.
Thank you for the information.
You should be able to file Quit Claim Deed(s) for your minerals into the LLC. It is a simple form that you can find examples of online. When we moved family interests into a business entity we drafted a quit claim from each individual into the company for each individual tract and submitted these to the county as well as any current operators. A full copy was also filed in the company records. This covers all your bases and provides a paper trail for everyone involved. Good luck!
I see it on here all the time, advice is always to get an attorney, like attorneys are omnipotent (I was one and disagree with it 75% of the time). Getting an attorney that knows oil and gas inside and out is the most important thing if you decide to go that route. If I were you, I would never use that attorney again with the advice given and I hope he didnt charge you much to create the LLC, as it takes several clicks of the mouse and 10-15 minutes on the internet to set one up. You dont need an attorney to file the deed from you into the LLC unless you like wasting money. You stated the attorney already prepared the deed, simply mail the deed to the county clerk or use their e-file system if they have one.
I am not an attorney and I am not a title attorney, but every good board certified real estate attorney I know says almost never use QC deeds in Texas. The way it has been explained to me is they are basically saying “I don’t know if I have interest in this property or not, but if I do, I am giving up any claim to it.” It doesn’t transfer ownership, just explains dis-ownership if that is a word. You want some kind of real deeds like a warranty deed to transfer ownership. Probably good idea to have it drafted by attorney or title company so it doesn’t get messed up and costly for the next generation.
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It is dangerous to use a full warranty as that can open you to consequences if it turns out that you own some lesser interest or that there is an NPRI or other burden that you did not know about. Warranty should be limited to by, through and under the grantor. Quit claim deed is fine as it means that you relinquish everything that you own in the described tract. However, be careful if you reference the county and end up transferring some other tract that you did not know that you own. If you are acquiring minerals, you want the strongest warranty language possible.
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BlackGold, I am a retired real estate lawyer, board certified in commercial real estate, and I agree with your advice. Your explanation of what a quitclaim really does is pretty accurate. Title companies won’t usually insure quit claim deeds used as conveyances. It’s the wrong tool for the job. If you don’t want to use a warranty deed, use a deed without warranty.
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Good point. In real estate sales in particular, often a generic quit claim deed will be integrated in the event the seller owns minerals they do not realize they own or doesn’t care to keep. This blanket form ensures transfer of any known/unknown minerals with the sale of a property.
That being said, our O&G attorneys have advised us over the years that quit claims are the easiest and most straightforward way to transfer minerals between trusted entities- in our case from individuals into a company owned by the same individuals. The quit claim deeds we have filed have clear and detailed descriptions of minerals held, their exact locations and the lineage of ownership from individual into our corporate entity. My recommendation above was based on it being a similar scenario but I should have clarified that while you can find example forms online, I would always recommend reviewing with a reputable O&G attorney before using it or any other document to determine if it is in fact a viable option as well as what language it should include to avoid any misinterpretation now or in the future.
This is a great discussion. Love to have everyone in the room at the same time (clients, lawyers, title folks) to discuss why people use or advise QC deeds and how they use them. It seems like the document is evolving from how it was perceived 40 years ago. I bet the language isn’t uniform.
Dan
Great Post! A Quit Claim Deed might put a CLOUD on your title in Texas.
I don’t think that the Oil Company will pay the LLC until the minerals are transferred into the LLC at the County Level. Waiting is only going to cause you an unwanted delay in getting your payments.
A QCD can transfer title given a sufficient granting clause. The original intent of a QCD was to remove strangers to a title, but that has modified over time. Professional note, never pay attention to the title on a document. Have a professional review the document for intent.
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