Good evening, my Mineral Minions! My sister received a P & S for minerals in Panola County (Texas). The letter mentions the standard “due diligence” clause concerning the Buyer. Furthermore, it mentions if said “due diligence” discovers any issues, then the Buyer will notify the Seller at least 3 days prior to Closing. Now to my first question:
If she signs these papers with an offer of X dollars and the Buyer’s due diligence finds that offer to be too high/too low, am I now obligated to accept the adjusted value (let’s call it Y)?
To my last question:
The P & S further states that "the Seller shall FedEx overnight both the unrecorded source deed and the unrecorded deed from the Seller to Buyer to Buyer." I sold my inherited mineral rights a few years back and merely signed the papers and after a prescribed time (Closing), I received the funds. At no time did I have to send any "Deed" to the Buyer. What would that look like? Is that just merely boilerplate contract lingo?
Thank you for your input,
Woody
As compared to my 1st question, I’m not sure why the 2nd question is clustered into one long section. Please forgive my awkward paragraph organization. Thank you.
Assuming that you and your sister each individually own undivided interests in the same minerals, you are each free to lease or sell or hold individually. You are in no way bound to any agreement which she signs. If she is the trustee of a trust which owns the minerals or has power of attorney for your minerals or some other such arrangement, then it will depend on the legal language of the controlling document. Your questions about the P&A should be presented to an attorney who can read the entire document, with all the interwoven language, and explain the legal implications before you (or your sister) sign. There is no truly standard or boiler plate language and a buyer will usually present a one-sided document in his favor. Same as with leasing agents who present an oil and gas lease. Your attorney can redraft and change the language to protect you. The wording of the deed should also be negotiated to make certain it is limited to the exact minerals and/or surface and no other assets and not giving a full warranty. You should never send an original signed deed or lease without an immediate exchange of the funds.