Deed verbage and Federal Land Bank help

I’m trying to help my parents out with some land that they are selling. The land is in Arkansas, no current leases, etc. My grandfather bought the land in the late 30’s from the Federal Land Bank (St. Louis, I believe), and after both my grandparents died about 15 years ago, my father and Aunt decided not to go through probate, so they both own undivided 1/2. The deeds from the FLB says that they reserved 1/2 minerals when selling to my grandfather.

  1. Since the land was never deeded over to my father and aunt, they are having to execute separate Warranty Deeds to the new purchaser. It was agreed in the contract to withhold 1/2 mineral rights, with the intent to reserve 1/2 of whatever my relatives owned. The deed the lawyer drew up states that an undivided 1/4 mineral interest was being reserved, and I am wondering if standard (such as it is) deed wording is to specify the ACTUAL percent being reserved, or a RELATIVE amount of whatever the seller actually owns. I’ve read many, many discussions about lawsuits brought about to interpret what the reservation means, even when it appears clear, it seems that it can be challenged if it deviates from “usual” understandings and percentages in use (i.e. 1/8 is a “usual” royalty reservation, but 1/3000 would not be, and so should refer to a mineral reservation, even if the deed states it’s a royalty reservation.) I’m guessing the best advice is to make it absolutely (is that possible?) clear in the deed what is being reserved (e.g. “Grantor is reserving 1/2 of all mineral rights they may posses, if any, in …”) True? Don’t they have a right to make the lawyer (who knows virtually nothing about minerals) word the deed anyway they wish pertaining to the minerals?

  2. Since the land is currently held by my father and aunt in an “undivided” state, thus the minerals also, would the existing deed’s wording of “undivided 1/4” reservation pertain to both (i.e. my father and aunt both will retain a combined 1/4 interest), or since both deeds they are to sign state the 1/4 is reserved does that refer to each separately reserving 1/4? Wouldn’t be a good idea for them to also split up the minerals, after the land sale, to separate the “undivided” state into each of their estates?

  3. When researching this several months ago, I SWEAR I read somewhere online that the Federal Land Bank is currently returning mineral rights that had been previously been reserved to landowners in Arkansas, and all they have to do is notify them (pay like $1 or something) and the Land Bank would quitclaim the rights to the current owner. I now can’t find that ANYWHERE in my searches. Is this true, or did I dream this up? I thought I saved the page out, but now can’t find it.

  4. Would it be better to reserve mineral rights or royalties - this land is not close to any production of any hydrocarbons, past or current, nor really any other minerals for that matter, but one never knows what will be found in the future. My advise to them is since you do own some of the rights, might as well retain whatever the buyer will agree to.

Thanks in advance for any and all help with these questions, and feel free to offer any other help you may see fit.

Proper conveyance and reservations are really state specific. There is plenty of "general" conveyance rules, but each state may have a slight variation on the specific language required for proper conveyance.

This has a wealth of information. This should be the bank that has assumed the assets of the former FLB from St. Louis.