Do You Know How To Determine Mineral Rights Ownership?
March 9, 2016
The state of Texas is comprised of beautiful land that is rich in many natural resources, such as oil, natural gas, and other valuable minerals. Many property owners have wealth beneath the surface of their land that can be sold to companies interested in drilling or mining for those minerals. Before the sale of mineral rights or royalties can occur, it is necessary to confirm ownership of those mineral rights, since the owner of the land is not always the owner of what lies beneath it.
Mineral Rights Ownership and Land Ownership
In Texas, land can be sold with or without all mineral rights if the seller of the land wishes to retain such rights. Landowners, while retaining ownership of their property, can also sell their mineral rights. Because who owns the resources beneath the land surface affects the ability to sell mineral rights or royalties and drill for minerals, it is necessary to determine who actually owns the minerals before any transaction can occur.
The first place to begin when attempting to determine who is the legal owner of the mineral rights on any property is to refer to the property title. Since most properties in Texas are sold with some kind of acknowledgment of mineral rights in the ground, that information can usually be traced via property titles. The transfer or non-transfer of mineral rights should be documented within the title to state that the current property owner, or someone else, is the owner of ground minerals. Title copies for this research can be obtained from the appropriate county clerk’s office.
Chain of Title
Unfortunately, obtaining one title is not always sufficient to confirm mineral rights ownership. Since often times titles are written without mention of mineral rights, or incorrectly stating ownership, it is necessary to construct a “chain of title” to prove actual ownership. A chain of title is basically a paper trail that goes as far back as there are any titles. This can be researched for a property, so that ownership of mineral rights can be established from the beginning and then followed through on all subsequent sales of the property.
Gaps in the Chain
In the best case scenario, there is documentation of mineral rights ownership throughout the history of a property. Yet this is not always the case, and gaps in the chain where there is either no record of ownership or questions as to how an owner obtained rights do appear. When this happens, research must be extended to include other official documents, such as past tax filings, divorce and inheritance records, and other public records regarding the sale of mineral rights. This is done until all the gaps can be filled.
Title searches to determine mineral rights ownership are required before any transaction involving the sale of mineral rights or royalties can occur. When there are gaps present in the chain of title, it is best to work with either a good title search company or an experienced mineral royalties company, both of which can expedite the process of determining ownership of mineral rights!
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