Hi, I’m looking to purchase and build on some land in Montgomery County, TX and was looking for recommendations on who to reach out to for questions and document review.
There were a bunch of old leases (from a larger pool of land) found during the Title Commitment (Schedule B) and I want to make these won’t negatively affect me in the future or affect the ability to get any type of construction/mortgage loan. There hasn’t been O&G activity on the surrounding land/pooled lease in 35+ years.
If you have any thoughts or Landman recommendations please let me know. Thank you!
Welcome to the forum. It is smart to be looking into this before you buy, many folks don’t. You didn’t mention how many acres are involved and where you are in the purchase process, which can make a difference. Ideally the status of surface control is something to ask about before a contract is signed.
Regarding the old leases on Sch. B, ask the title company to email you copies. If they are beyond their primary term and not “held by production” they have expired. If they are beyond their term and the seller has no knowledge of production you can request they sign an Affidavit of Non-Production that will allow the title company to delete them from the commitment.
If you haven’t aready, a starting point would be asking the owner if they own the mineral interest in the property, or if not whether they have surface control. That could be through a waiver of surface use in their acquisition deed or other recorded documents signed by prior owners of the property.
If the person you are buying from does own all or part of the minerals and will be retaining that interest, or they otherwise have surface control of the property, then you’ll want to have waiver provisions included in your acquisition deed.
If they don’t own minerals, have surface control, or knowledge about who controls the minerals and surface use of the property, then researching the chain of title may be required to establish who does. Maybe that can be accomplished through a couple of hours digging in the deed records at the County Clerk’s office. If you are buying a piece of what originally was a larger tract that will make the research harder.
If it turns out the mineral interest got severed from the surface years ago the mineral ownership and related surface control may now be spread between mutiple parties. Determining who has that control and obtaining a recordable waiver of surface use may be the only sure solution.
To give a little more context, the land that I’m looking to purchase (currently under contract) is ~5 acres that was part of a 40 acre O&G/Mineral lease. From what I’m able to see on public maps, it looks like only one dry hole was drilled on the leased acreage 35 years ago (north of the land I’m looking to buy). Based on the Warranty Deed from when the current landowner purchased the land 20 years ago, I don’t believe the mineral rights were conveyed to the current owner.
Some of the old leases in the Schedule B documents (~8-10 old contracts dating back to the 60’s) indicate that there is an option to defer operations for a fee and that is the main issue I’m trying to figure out. I want to understand what rights/claims (mainly on the surface) any future operator might have. Would also like to know who the current mineral rights owner is or if they ever revert back to the land owner. So I was looking to hire a Landman on short notice to help figure this out.
Do you think an Affidavit of Non-Production still applies in this case?
Please let me know if you (or anyone reading this) have any recommendations. Thank you again for your reply
It sounds like the old leases should have expired and what an Affidavit of Non Production would accomplish would be getting them removed as exceptions to the the title commitment.
The main issue would still be surface control. Regardless whether the property is currently leased if you don’t have surface control there would be no assurance whoever holds the minerals couldn’t at some future date sign a new lease potentially leading to operations that could be detremental to you.
I’m assuming what you are saying about the current owners acquisition deed not conveying minerals means it included a reservation by that seller, or made reference to a previous mineral reservation earlier in the chain of title. If the deed was silent regarding minerals that means any interest held by the party signing the deed would have passed to the party you are buying from.