Selling surface property and keeping mineral rights

Surface Owner Issues
1

We are selling the surface property, but keeping the mineral rights. The property will be

listed with a realtor. What needs to be in the listing agreement and do we need to retain an

attorney to read all documents?

Thanks for any help

K. McCluskey

2

Check the listing agreement and see if there is a section that has a checkbox for mineral reservation. If there is not a checkbox, make sure it is included in special remarks or an addendum to the listing agreement. Make sure the reservation gets included in the listing agreement, MLS sales sheet, sales contract, and finally - the title policy and actual warranty deed.

If you currently live at the property you are selling the surface, make sure you notify the operator (if it is leased or producing) of your change of mailing address. Also the same goes for the county appraisers office (if you are in a state that taxes royalties / minerals for property tax).

3

Thank you, good info, didn't think of all of these.

Katie McCluskey

4

You should consider having an oil and gas attorney review the deed before it is executed and filed to make certain that the reservation language is correct. This should be done several days before closing, not as you sit in the title office at closing.

5

Thanks, another good suggestion.

Katie McCluskey

6

Katie,

Keep in mind, every State has different rules on separating surface & minerals, so I strongly suggest having an attorney review the closing documents and not relying upon the title company opinion.

Best of luck

7

Thanks again, now we know having an oil/gas attorney from the start is the best plan.

8

Katie,

Although I tell my share of attorney jokes, you are correct to involve an attorney from the start. More than once, my attorney has saved or made me money and I suspect their professional advice has more than paid for the fees I have paid.

9

I have seen several instances where the contract to sell reserved minerals, but the title company lawyer preparing the deed did not know what he was doing and conveyed the minerals away. Have your own attorney. Never rely on a title company or its attorney to prepare the documents unless you know them and they know what they are doing.

10

Elizabeth,

Please take the comments made seriously. In my long career, I've seen reserved mineral values decimated or taken to zero because of mineral reservation language. Including 6000 acres in your town. In order to retain control of mineral value over larger acreage, you should hire a mineral attorney to write the deed of transfer. A very wise investment in my experience. Preserving mineral rights values should be an objective not an afterthought.

Gary L Hutchinson

11

Don't EVER trust a title company, a realtor, or a bank to handle matters regarding the mineral estate correctly. They have almost no experience with mineral estates and in the case of realtors and banks literally do not care, they just want the deal closed. I had two cases in my field work where a title company screwed over the Seller by NOT including the mineral reservation in the deed. In one case, the mineral reservation WAS in the sales contract, so the title company had to submit a claim to their insurance company under errors and omissions. In the other case, it was NOT included in the sales contract although it had been "discussed," so the Seller was screwed (and last I heard was threatening to sue the title company).