Surface & minieral rights to land from 100 years ago, how do you reasearch?

[David Pennington]

I am purchasing a 3acre lot an hour outside Dallas which not only fails to convey mineral rights, but also gives "appurtenant rights to use the surface of the land" to someone back in 1925. 

I plan on splitting this land into two 1.5 acre lots as there is enough road frontage, but I'm concerned that someone could show up and want to start drilling in the backyard.

I think someone wanting to drill is unlikely for the following reasons:
- the original owners are probably dead and the ownership is split between inheritance to multiple people
- the lot is too small for them to mess with
- there is only a single active well/pump within 30 miles from what I can see online. This is not a good area for drilling.
- the lot is very close to the city limits and might be included within the next few years
- the rights were from a larger 40 acre tract that were from a larger 80 acre tract that were from a larger....

Nevertheless, I am curious if anyone has recommendations on how to research this?

(apologies for the misspellings in the post title)

[Jonathan Greene]

This is like a quiz for everyone who got their real estate license and then never thought about appurtenant rights. It's definitely something you want to resolve and really title should be able to resolve it prior to closing as part of the closing process.

If you are looking for a resource who might be able to help, look up Jon Jasniak. He bought a town in Texas (yes, the whole town), but started with land and may have dealth with this issue.

[Bruce Lynn]

It's not necessarily something to resolve or fix or perhaps even research, unless a lender won't lend on it because you don't own the surface rights so would not finance permanent structures there.  In Texas the minerals are superior to the surface rights typically.  In some places we often think not to worry about them, but we find out later that there are minerals people want.  So for example Leon county is a hotbed of activity right now.   If we find Lithium somewhere, that may also be a hot topic like it is in SW Arkansas right now.   You can hire a landman to research if you desire.  Maybe $400 a day or so depending on your county.  I think the trick is if what they tell you what you already know, what do you do about that?  It is very common to not own the mineral rights to many parcels of land as they were separated long ago.  We often say you want to retain the surface rights to run with the land.  Have you discussed with your title company?  Might also talk to underwriter at a lender to see what they say.

Some cities prohibit wells in the city limits.

3 acres is probably big enough for a well pad and a tank battery.

Did you pay cash with no title search?

[David Pennington]

Thanks for the feedback. I'm paying cash and currently in the options period and going to talk with the title company on Monday. The mineral rights don't bother me as much as them being combined with the surface rights. Once this is two 1.5acre tracks I don't really want to put a house on one/both and then find a drilling truck showing up to install a pump in the backyard.

[David Pennington]

The contract I could find says the following:

```
...together with the right of ingress and egress at all times for the purpose of mining, drilling and exploring said land for oil, gas and other minerals, and removing the same therefrom.

And said above described land being now under an oil and gas lease originally executed in favor of [Oil Company], Chicago and now held by [Oil Company] it is understood and agreed that this sale is made subject to said lease, but covers and includes of all the oil royalty and gas rental or royalty due and to be paid under the terms of said lease.

It is agreed and understood that of the money rentals which may be paid to extend the term within which a well may be begun under the term of said lease is to be paid to the said [purchaser], and in the event that the said above described lease for any reason becomes cancelled or forfeited, then and in that event, the lease interest and all future rental on said land, for oil, gas and mineral privileges shall be owned jointly by [owner] and wife and [purchaser] each owning & interest in all oil, gas and other mineral in and upon said land, together with interest in all future rente.

This sale is made for and in consideration of the sum of Ten Dollars, cash in hand paid, the receipt of which is hereby acknowledged.

To have and to hold the above described property, together with all and singular the rights and appurtenances thereto in anywise belonging unto the said [owner] heirs and assigns forever, and we do hereby bind ourselves, heirs, executors and administrator to warrant and forever defend all and singular the said property unto the said [purchaser] heir and assignee against every person whomsoever lawfully claiming or to claim the same or any part thereof.
```

[Jay Hinrichs]

before you go down the rabbit hole to far as @Bruce Lynn mentioned see if the jurisdiction were the lots are located will even allow a surface operation within their zoning code or that lot size.. thats the first thing I would do.

Being an old land man I have dealt with a ton of mineral and water rights.. there is a lot to those buggers.. But out west here generally speaking surface mining on a small parcel simply will not be allowed in the current zoning code..  IN northern Ca we had a lot of steam wells where hereto for mineral rights were there but not that valuable or any value.. Until they figure out  how to slant drill.. these were big geothermal wells.

[David Pennington]

Thanks for the recommendation @Jay Hinrichs. The lot is outside of the city limits (just barely) so I'm only familiar with city zoning regulations, not county or state regulations. Do you happen to know what terms I should use to find these?

[Jay Hinrichs]

Quote from @David Pennington:

Thanks for the recommendation @Jay Hinrichs. The lot is outside of the city limits (just barely) so I'm only familiar with city zoning regulations, not county or state regulations. Do you happen to know what terms I should use to find these?

very simple go to the county planning department office show them the map and ask them if surface drilling is allowed in their zoning code.. I know Texas supposidly has veryy lax zoning but its an easy way to check.

[Scott Mac]

Do you expect wildcatters to show up in your backyard? 

They have ways now to know where the oil is under the ground that are more sophisticated than random wildcat drilling.

Maybe you could find a way to look into if there is any oil under your property.

https://www.youtube.com/watch?v=T0CwhJSKG-s

Good Luck!

[Dan H.]

I think what concerns you is more common than you seem to believe.   I do not believe I have mineral rights on any of the properties I own, but I share in mineral rights on property that I do not own and have active extraction and receive 2 monthly checks (different operators).   The extraction is on large land plots, not sure of exact size but likely at least 100 times bigger than your 3 acres.  In addition, the extracts minimize impact to the land owners meaning they are not near the home on the farm and can barely be seen from the home on the farm.

I think it is prudent you do your due diligence, but I suspect you will find that there is little risk from not owning the mineral rights and that the mineral rights come with surface rights.

Good luck

[Bruce Lynn]

@Dan H.  Actually here in Texas we can separate the surface rights from the minerals.  Very common.  Typical pad site is about 3 acres, but I've seen bigger and smaller depending on the well.  Shallow vertical oil wells can have pretty small pads, while some deep horizontal wells with multiple holes can have some probably 10 acres.

Minerals are superior to the land, so while not all that common, so someone who just holds the land, but does not have a good surface rights agreement could find a drilling rig in their backyard.  I've seen active pump jacks in the yard, but not sure who was there first...the well or the house.  So it can be something to be concerned about.  Many cities don't allow drilling in the city limits, or have restrictions, but outside city limits and especially outside the metropolitan areas, there are fewer restrictions on drilling sites.

[David Pennington]

I followed @Jay Hinrichs advice and checked with the county and they have no zoning regulations about drilling.

So it's possible someone could, however, it seems unlikely from everyone I can find, including the title company's . The original grants were for an 42acre chunk of an 82 acre lot. Since 1925 though the oil industry has moved on from this area and drilling isn't common here. Once this is split into 1.5acre lots and houses are built I doubt someone will try to find all the heirs and try to put a pad behind one of the houses.

It's possible, but seems worth the risk.

[Jay Hinrichs]

Quote from @David Pennington:

I followed @Jay Hinrichs advice and checked with the county and they have no zoning regulations about drilling.

So it's possible someone could, however, it seems unlikely from everyone I can find, including the title company's . The original grants were for an 42acre chunk of an 82 acre lot. Since 1925 though the oil industry has moved on from this area and drilling isn't common here. Once this is split into 1.5acre lots and houses are built I doubt someone will try to find all the heirs and try to put a pad behind one of the houses.

It's possible, but seems worth the risk.

 I would check with lenders though to make sure you dont get stuck and your buyers cant get an owner occ loan because of this.. Its probably oK but worth calling around and sharing your prelim title report with a lender AND their underwriter to get the thumbs up.. Same with a potentional construction lender thye will want to know there is a loan ready to go to take them out when you sell them.

[David Pennington]

> I would check with lenders though

That's a really good call-out. I will say this is one of several same-size plots split from a larger one and the others have been split in half the same as I'm planning. It's possible they had to find a cash buyer, but I think it's another point to this being mortgage-able.