My question is… I made a offer on a property and happen to know that the property I’m buying has mineral oil rights. The house is a Probate property which the owner pasted away and I’m waiting for a court date to submit my offer. How can the seller and I come into an agreement for the mineral rights if the owner is deceased? What rights do I have as the new property owner? One thing I know is that the beneficiary has the right to keep the mineral rights or pass it along to the new buyers and we both have to come into a agreement. In this case the seller is deceased, how can I obtain those mineral rights?
One element of this question is that of determining what value you decide to place on the mineral rights, ie, how much you want to offer the beneficiary. Mineral rights value will vary within a wide range. Location, size, whether there has ever been an oil and gas lease on them… all these things matter. Like any transaction, many things are negotiable. Do your homework.
If the probate is open and the executor has not transferred the rights away already, then the arrangement is made through the executor. In Texas, for example, most independent executors need no additional authority from the probate court to make such a transfer, but in Louisiana, for another example, you would need court authority.
Rights to property will reside somewhere. If the owner is deceased, the mineral rights typically flow immediately to his estate. There are ways around this or course, like a right of survivorship, etc.
It is always useful when asking questions to name the state where the minerals are located.
So when do you check with the oil company about the transfer of mineral rights through probate when they are already drilling on your property? My dad died three years ago. The land was split by a probated will equally between my brother and me. I checked with the county register, and there are 3 entries. Ist, the signed 5 year mineral lease (producers 88) from my dad with an end date of Nov 2010, 2nd, the letters of testament appointing me personal rep, and 3rd, the transfer of the real property to my brother and me. No mention of the mineral rights in the will or the probate. We have been paid for the surface rights and assume the mineral rights will follow. But you know what happens when you make assumptions. The section is in ND. Thanks for your thoughts.
Mr. Awsumb,
I am not familiar with more or less commercial forms of leases in North Dakota. Most contemporary lease forms do provide that no change or transfer of ownership will be binding until such time as the current leaseholder is provided with copies of the documents transferring title.
This is an instance where the owner of the minerals is responsible for their management.
Do look at your particular lease form and contact the oil company and find out what type of documentation they require. I would think that providing a certified copy of the transfer from the estate into you and your brother would be sufficient.
ken awsumb said:
So when do you check with the oil company about the transfer of mineral rights through probate when they are already drilling on your property? The section is in ND. Thanks for your thoughts.
NOT LEGAL ADVICE
Dear Ms. Gladstone,
Whatever mineral rights the Decedent owned to the property that you want to purchase will be transferred to you, assuming that he or she did not sever them in a Mineral Deed before dying, bequeath them to somebody else in the Will, or otherwise alienate them. You don’t have to enter into any special negotiations for the mineral rights with the Executor or Administrator. As soon as you buy the surface, you get whatever minerals correlate to that property.
Sincerely,
Philip Wynne
I am new to this sight and could any one help me with this?
My uncle owned 80 acers of land and the mineral rights in 1913,my uncle and his two brothers filed mining claims on my uncles 80 acers, would this be a seperation of minerals, ,as my uncle lost the land to a judgement forcloser in 1917.would they still owen the minerals ritghts.or would the seperation have to be in a deed form. as there intention was to seperate the minerals from the land by filing of the mining claim and thouht that they would never lose them.
NOT LEGAL ADVICE
Dear Mr. Carter,
First of all, I do not know what a “mining claim” is, so I have no way of knowing whether or not that is equivalent to a Mineral Deed. My guess is “No.” And, unless there was a release of lien filed by the financial institution that later performed the foreclosure, the minerals would revert to the bank anyway.
I consulted a very smart oil-and-gas attorney in Houston a year or two ago about this very matter. He told me that, at least in Texas, if A owns a piece of land and the minerals beneath it, executes a Deed of Trust to B, executes a Mineral Deed selling the minerals to C without getting a release from B for the mineral estate, and then is foreclosed upon by B, the minerals go from C to B, and from B to whoever becomes the new owner out of the foreclosure process.
So I posed to this attorney an obviously extreme example. I said, “For argument’s sake, let’s say A buys a piece of property and executes a Deed of Trust to B as collateral for a thirty-year note, then the very next day A sells the minerals to C. Then, A goes along making his payments for twenty-nine years and eleven months, but for whatever reason A just cannot make that last mortgage payment, so B forecloses on A and sells the property to D. Are you saying that D is now the owner of the minerals to this tract, not C, even though C ‘bought’ the mineral rights almost thirty years prior to that?” The lawyer said, “That is exactly right.”
So I guess the lesson is that if you are in the market to buy mineral rights instead of leasing them, you better get a warranty deed from the seller and a release from any lienholder or holder of any note for which the minerals are collateral or partial collateral.
Sincerely,
Philip Wynne
Walter B Carter said:
I am new to this sight and could any one help me with this?
My uncle owned 80 acers of land and the mineral rights in 1913,my uncle and his two brothers filed mining claims on my uncles 80 acers, would this be a seperation of minerals, ,as my uncle lost the land to a judgement forcloser in 1917.would they still owen the minerals ritghts.or would the seperation have to be in a deed form. as there intention was to seperate the minerals from the land by filing of the mining claim and thouht that they would never lose them.