Greeting All,
Years ago my siblings and I inherited percentages of mineral rights in Grimes County, TX. Current leases have brought consistent but declining royalty income. There is now an interest to transfer ownership share from one sibling to another family member. Can some one give me guidance of the process required? Is is simply filing a form with the County Clerk or a more complex process. Consideration will be minimal required ($1). Thanks
Scott McKee
You have them sign a Mineral Deed before a Notary Public conveying all of their right, title, and interest together with rights of ingress and egress in all oil, gas and other minerals in, on and under the land so described in the mineral deed. You will need a legal description of the land.
After the mineral deed is executed, it should be filed in the Office of County Clerk, Grimes County, Texas. They will charge you a filing fee.
As for the consideration, just put Ten Dollars and other valuable consideration. There is no requirement that you state the exact amount that will be paid for the interest.
The grantor/seller is the only one who needs to sign it, and acknowledge their signature before a Notary.
Dave,
Thanks for the quick reply. Does the Mineral Deed have to be written by an attorney or is there a standard form that can be used to produce the document? The parties involved are not Texas residents.
Scott McKee
No, not really. Try this:
MINERAL DEED
STATE OF TEXAS
COUNTY OF GRIMES
The undersigned Grantor, for and in consideration of the sum of Ten and No/100 ($10.00) Dollars, and other valuable consideration, in hand paid by ____________________________,
(ADDRESS), Grantee, the receipt of which is hereby acknowledged, does hereby grant, sell, transfer, assign and convey unto said Grantee, his heirs, successors and assigns, all of my right, title and interest in all oil, gas, and other minerals, in, on, and under the following described lands:
(PUT LEGAL DESCRIPTION HERE.)
together with the right of ingress and egress at all times for the purpose of mining, drilling, exploring, operating and developing said lands for oil, gas and other minerals, and storing, handling, transporting and marketing the same therefrom with the right to remove from said land all of Grantee's property and improvements.
To have and to hold the above described property and easement with and singular the rights, privileges and appurtenances thereunto or in any way belonging to said Grantee herein, his successors and assigns.
Witness my/our hand the ______day of June, 2013
_____________________________________
(Grantor/Seller)
ACKNOWLEDGEMENT
STATE OF ______________________
COUNTY OF __________________________
This instrument was acknowledged before me on the ______day of _________, 2013, by ______________________________. (GRANTOR)
____________________________________
Notary Public in and for the State of _________.
Thank you!
Your'e welcome. That might fly, but remember, you get what you pay for. :)
Dear Mr. McKee,
There are more moving pieces to your questions than first appears. Be careful of those first impressions.
"Current leases have brought consistent but declining royalty income."
In addition to describing the acreage, it would be wise to identify the wells by API number and set a date and time certain as to when the effective date of the transfer is, such as "7:00 A.M. on the first day of the month following the execution of this agreement." You will likely need to execute a transfer order proffered by the Operator or oil buyer.
"...transfer ownership share from one sibling to another family member."
If the other family member is currently married, there is something called a presumption of community in Texas, which presumes all properties acquired after marriage, subject to certain conditions, are considered community in nature. If the property is to treated as separate, then the consideration could be love and affection and titled gift deed and have words or gift in the granting clause and define the grantee as "Joe Blow, his separate and paraphernal property." To really capture the ring, then the spouse of the grantee could execute the deed as a proforma grantee which states that she relinquishes or quits any claim to the property conveyed.
Here is a little known item that must be taken care of. If the effective date of the transfer is July 1, for example, then what is to be done with the accrued but not paid income on production and sales prior to July 1st? Well, those funds not real property, so you would need a Bill of Sale to capture those funds, if that is what the family member wants.
"Current leases..."
Finally, since there are existing leases, the operator will make no changes to its records unless the transfer and notice is completed as required in the lease. Read the lease to find out the procedures on changes of ownership.
Homemade transfers are a great source of revenue for attorneys to unravel the Gordian knot that can be created. You will have to make your own decision as to which way to go.
Also, it is really a smart idea the Grantor grant to the Grantee a limited power of attorney in order to effect the transfer of the properties that are the subject of this conveyance (like division orders, transfer orders, etc.)
I will say this, the unauthorized practice of law statute in Texas basically winks at landmen practicing their craft. Once they move out of that arena, then the landman is playing on the home field of trial lawyers.
It was taken word for word off a mineral deed that has production on it. I didn't make it up, so it's not homemade.
Where does it fail?
Who was practicing law? I just gave him a general example of what a Mineral Deed might look like, and told him that as far as free advice goes, he gets what he pays for. It's up to him if he wants to hire a lawyer or not. I never told him not to. I said that the example "might fly". I never warranted anything.
I would think the instrument would be effective on the date of execution. The transfer of royalties would occur within a reasonable time after they inform the operators of the transfer of ownership.
I don't agree at all that the names of the wells would need to be on the mineral deed. I very rarely see that.
Buddy brought up a valuable point about the exact time of the sale or transfer, and specifics regarding the current production. There was a thread a few weeks ago about a person who bought land with active production and because the gas company takes 90 days to transfer ownership, the new owner lost out on several thousands of dollars of royalties because it was not specified in the closing documents about that issue and how the accumulated royalties between closing and the official change of ownership was to be handled.
It's something to consider, but in this case you have family members who want to make an amicable transfer of ownership. They can probably work that distribution out, pertaining to the overlap. Scott McKee can confirm this, but from what I gathered, they want to keep things as simple as possible.
Amicable is an assumption. But I certainly hope that things work out well. Anytime family, money, and property are involved, things have the potential to really get nasty. I hear those stories at least once a week through my job.
I would be willing to bet there are some families who still like each other. From the description he gave, it sounds like it would be amicable, and that any overlap could be agreed upon, and now he can even tweak the example deed I gave him if he feels the need.
It seems apparent that Buddy never addressed anything to anyone other than Scott McKee and his whole message was in the spirit of being helpful. If ANYONE took it as an affront to them personally, they're really not reading his message with clarity. Try backing off and take a deep breath. Quit messing in other people's business. I'm sure you have plenty on your plate to take care of.
Yours,
Wes Luke
Gentlemen,
Thank you for your thoughtful words. The transfer is between my brother and our single parent. Any effective date overlap is of minor concern. Our primary concern in to generate the proper document to execute this transaction. Thanks again
Scott McKee
Bless you Scott, and may the transaction go smoothly.
Yours,
Wes Luke
I saw nothing in Scott's posting that would warrant Cotten discussing unauthorized practice of law. Scott was just asking some questions, but then again, I see nothing in any of my postings that would warrant even the mention of "playing on the home field of trial lawyers". I wasn't giving legal advice. I was just explaining to Scott the concept of the Mineral Deed in abstract terms, and then I just grabbed one that happened to be within arm's reach, and copied it. I'm sure it was basic and cursory, and that it could be beefed up. I thought that was a given.
In any event, it was very evident and also apparent, that the comments about unauthorized practice of law, were directed at me, and not Scott. No, make that misdirected.
Wes Luke said:
It seems apparent that Buddy never addressed anything to anyone other than Scott McKee and his whole message was in the spirit of being helpful. If ANYONE took it as an affront to them personally, they're really not reading his message with clarity. Try backing off and take a deep breath. Quit messing in other people's business. I'm sure you have plenty on your plate to take care of.
Yours,
Wes Luke
I'm sure you'll find a way to come to grips with it. The practicing of law comments were not directed at anyone. Of course, if you feel guilty about something it might seem that it was. : )
Yours,
Wes Luke
Buddy makes some good points. Also check your lease, as I have seen some leases which gave the Lessee a right of first refusal or have mandatory notice provisions.
Buddy Cotten said:
Dear Mr. McKee,
There are more moving pieces to your questions than first appears. Be careful of those first impressions.
"Current leases have brought consistent but declining royalty income."
In addition to describing the acreage, it would be wise to identify the wells by API number and set a date and time certain as to when the effective date of the transfer is, such as "7:00 A.M. on the first day of the month following the execution of this agreement." You will likely need to execute a transfer order proffered by the Operator or oil buyer.
"...transfer ownership share from one sibling to another family member."
If the other family member is currently married, there is something called a presumption of community in Texas, which presumes all properties acquired after marriage, subject to certain conditions, are considered community in nature. If the property is to treated as separate, then the consideration could be love and affection and titled gift deed and have words or gift in the granting clause and define the grantee as "Joe Blow, his separate and paraphernal property." To really capture the ring, then the spouse of the grantee could execute the deed as a proforma grantee which states that she relinquishes or quits any claim to the property conveyed.
Here is a little known item that must be taken care of. If the effective date of the transfer is July 1, for example, then what is to be done with the accrued but not paid income on production and sales prior to July 1st? Well, those funds not real property, so you would need a Bill of Sale to capture those funds, if that is what the family member wants.
"Current leases..."
Finally, since there are existing leases, the operator will make no changes to its records unless the transfer and notice is completed as required in the lease. Read the lease to find out the procedures on changes of ownership.
Homemade transfers are a great source of revenue for attorneys to unravel the Gordian knot that can be created. You will have to make your own decision as to which way to go.
Also, it is really a smart idea the Grantor grant to the Grantee a limited power of attorney in order to effect the transfer of the properties that are the subject of this conveyance (like division orders, transfer orders, etc.)
I will say this, the unauthorized practice of law statute in Texas basically winks at landmen practicing their craft. Once they move out of that arena, then the landman is playing on the home field of trial lawyers.
Best of all things,
Buddy Cotten
Mineral Manager
Like I said, nothing Scott said would warrant any of Cotten's comments regarding the unauthorized practice of law.
Um, let's see. Before Cotten came on, it was just Scott and I. Not too hard to figure out who Cotten was misdirecting his comments at. In fact, I would even say that it was apparent.
Dear Mr. Luke,
The UPL statement was directed at someone. It was directed at me, nobody else. I take great care to stay on my side of line.