Austin real estate property doesn't convey with mineral rights? (Howe: houses, neighborhood)

[texan2yankee]

We found out through the title company a single family home we are contracted to purchase in Austin doesn't convey with mineral rights. We have been told by our real estate agent this is standard language in all Austin real estate transactions and the city of Austin owns the mineral rights to all residential property.

Does anyone know if mineral rights are routinely not conveyed with residential houses? This is a concern to us. Any advice or experience would be appreciated.

[TexasHorseLady]

The standard contract is promulgated by the Texas Real Estate Commission, not the City of Austin. There is an addendum (as Texas Association of Realtors form) that is specifically to be used if the mineral rights are going to be reserved by the seller. However, the seller may not own the mineral rights; they may have been sold or withheld prior to the current owner buying the property. Developers usually retain the mineral rights. Did the title company say exactly why the mineral rights don't convey? (I'm guessing the seller doesn't own them, if the addendum in question wasn't used.)

Unless the City of Austin purchased all of the mineral rights, I wouldn't think they'd own them. But now I have to go research it!

This is usually not a big issue in the Austin area for homes in subdivisions. In fact, I've not had a closing in which it was an issue. Much bigger in the DFW area.

[texan2yankee]

thank you so much, TexasHorseLady! We asked the title company and they know nothing about who owns mineral rights, but said there is an ordinance in Austin that drilling is prohibited which should protect us from having someone drill in our backyard. We were surprised our real estate agent said a question about who owns the mineral rights to the real estate they were purchasing had never been asked of her.

We also have been asking our agent if the outbuildings were permitted. Our agent said the title company would address that, which they did not. Spoke with the title person who said they had nothing to do with whether proper permits were pulled on the buildings. How the heck do we know they were built with city approval and protect ourselves from having a city inspector potentially show up at our house and say they aren't and we must either tear them down or pay to have them meet code, etc? These outbuildings are 1/3 of the sq footage we are paying for so not an insignificant amount of money.

[centralaustinite]

Originally Posted by texan2yankee

We also have been asking our agent if the outbuildings were permitted. Our agent said the title company would address that, which they did not. Spoke with the title person who said they had nothing to do with whether proper permits were pulled on the buildings. How the heck do we know they were built with city approval and protect ourselves from having a city inspector potentially show up at our house and say they aren't and we must either tear them down or pay to have them meet code, etc? These outbuildings are 1/3 of the sq footage we are paying for so not an insignificant amount of money.

You can check with the City yourself about permits! I always did when I was looking at real estate.

http://austintexas.gov/department/on...ools-resources

[texan2yankee]

Originally Posted by centralaustinite

You can check with the City yourself about permits! I always did when I was looking at real estate.

Online Tools & Resources | Planning | AustinTexas.gov - The Official Website of the City of Austin

Thank you centralustinite! I will try and find out online. We are unsure which section to search at the website you provided but will try to get some info and report back here.

So appreciate you both helping us. we are floundering a bit.

[texan2yankee]

We found the permits for outbuildings in the 1980s.

[austin-steve]

Originally Posted by texan2yankee

thank you so much, TexasHorseLady! We asked the title company and they know nothing about who owns mineral rights, but said there is an ordinance in Austin that drilling is prohibited which should protect us from having someone drill in our backyard. We were surprised our real estate agent said a question about who owns the mineral rights to the real estate they were purchasing had never been asked of her.

We also have been asking our agent if the outbuildings were permitted. Our agent said the title company would address that, which they did not. Spoke with the title person who said they had nothing to do with whether proper permits were pulled on the buildings. How the heck do we know they were built with city approval and protect ourselves from having a city inspector potentially show up at our house and say they aren't and we must either tear them down or pay to have them meet code, etc? These outbuildings are 1/3 of the sq footage we are paying for so not an insignificant amount of money.

I'm confused about the outbuildings being " 1/3 of the sq footage we are paying for". Normally, there is no value in outbuilding, sheds, etc as that is not heated/cooled space. A buyer may view the outbuilding as a "positive", but in most instances, the exact same house would have sold for the exact same amount without the shed or outbuilding, so it's not worth anything really. Under a certain size, no permit is required. I think it's 120 sqft, but you'll need to research it.

The mineral rights are of no value to you, or anyone else, in a residential subdivision in Austin. The lots are too small to be drilled. I suppose horizontal drilling could theoretically happen, way beneath the surface under your home. But what would they be drilling for in all that limestone?

Steve

[texan2yankee]

Some permits appear not to be pulled. More research needs to be done to find out if permits can be obtained and the property can be conveyed with proper permits.

The work is significantly more than a small shed, steve. I have been told by one Austin code enforcement officer today that the if a person buys a house, it is the current owner who is responsible to bring the work into compliance if permits weren't properly obtained by previous owners.

As to mineral rights, steve, you obviously have never lived on a ranch in Texas. Oil companies have and do enforce their rights to drill on personal property when they own mineral rights on the land, regardless of the land owners feelings about it.

[centralaustinite]

I think that Steve is confused over the idea that you are paying for outbuildings as if they are part of the sq footage of the main property, that is not how things usually work, unless it is heated/cooled space.

And yes, technically the current owner is responsible for bringing a property into compliance regardless of when the unpermitted work was done -- but code compliance is complaint driven in Austin, so enforcement isn't likely -- unless you apply for a permit to do more work, once the City sees it, you have to bring everything into code.

I have slowed/scuttled several deals over the lack of permits or having open permits on houses. No reason you should have to deal with it -- however, if the work is decades old and similar to work done to many houses in the neighborhood (like unpermited garage conversion) AND it is in the desirable neighborhood, you might lose out to another buyer who isn't concerned with such details, it does happen.

[texan2yankee]

This property and improvements are heated/cooled buildings.

The code enforcement officer said what you said above, centralaustinite. If a city inspector sees something that is out of compliance or unpermitted when inspecting a remodel or pulling a new permit for example, a homeowner can't obtain permits for the new work and would keep an owner from remodeling a kitchen for instance or a bath, etc until the unpermitted work is in compliance or removed.