Special Warranty Deed - "Reservations from and exceptions to conveyance and warranty"

Law & Legal
1

Hello,

I purchased a house in the Barnett Shale in Texas through foreclosure in 2009. The previous owner had signed a gas lease and the unit has now gone into production. I signed a lease in June of 2010. I have read and heard from many sources that banks do not reserve mineral rights through foreclosure. I have had someone from the gathering company and the leasing company tell me that the mineral rights were conveyed to me. Now, there is a new landman with the leasing company (who has given me incorrect information before) saying that the the special warranty deed separates the mineral rights from the surface rights of my place:

"Reservations from and Exceptions to Conveyance and Warranty:"

Grantor covenants that it is seized and possessed of the said land and has a right to covey it, and warrants the title against the lawful claims of all persons claiming by, through, and under it, but not further otherwise.

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The following reservations from and exceptions to this conveyance and the warranty of title made herein shall apply.

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1. All easements, rights of way, and prescriptive rights whether of record or not, pertaining to any portion(s) of the herein prescribed property (hereinafter, the "Property");

2. All valid oil, gas and mineral rights, interests or leases, royalty reservations, mineral interest and transfers of interest of any character, in the oil, gas or minerals of record in any county in which any portion of the Property is located;

3. All restrictive covenants, terms, conditions, contracts.......etc.

4. All presently recorded instruments (other than liens and conveyances by, through or under the Grantor).........etc.

5. Ad valorem taxes, fees and assessments, if any, for the current year and all prior and subsequent years..........etc.

6. Any conditions that would be revealed by a physical inspection and/or survey of the property.

It's very hard for me to decipher legal mumbo-jumbo, but it seems to me that if they were reserving the mineral rights, they would also be reserving any easements, taxes, rights of way, etc. How can the grantor reserve easements and rights of way?

Are these reservations and exceptions to protect the grantor from a title issue resulting from a previous owner's claim mineral rights? Or does this clause in fact reserve the mineral rights for the bank's ownership?

Any help would be greatly appreciated.

2

Dear A,

Others may disagree with me, but my call is that the reference to an existing lease is simply that. Not a mineral reservation. If the seller wanted to reserve the minerals, he would have. However, if there are any leases in effect covering all or a portion of your property, you are on notice of their possible existence and should act accordingly.

This is very common language and is used to preserve the warranty of title.

3

Buddy,

Thanks for your response. I think you just nailed what I was trying to say.

Thanks again,

Adam

4

It has been my experience that when Real Property is being conveyed and a title insurance policy is issued to the buyer by the seller, the title company and the title policy do not warrant the minerals only the surface. This is usually always shown on the title policy. So read your title policy from the bank.

Most of the time the banks want you to warrant things when you borrow from them. But when you buy from them they don't to warrant a damn thing!


A said:

Buddy,

Thanks for your response. I think you just nailed what I was trying to say.

Thanks again,

Adam