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I actually signed a mineral rights waiver yesterday w/ a different builder/lender, although I believe they have to offer just compensation for damages, etc. I'd have to digest it again to be sure.
Stoneridge was the builder, but I looked yet again and could not find anything in their contract concerning mineral rights. The mineral rights form was from the lender (Supreme) and doesn't seem to really cover ownership, but more of property damage reimbursement tied to discovery on the property. Basically, if you strike oil in your backyard, keep your mouth shut and they don't want to know about it. However, drilling is not permitted per our HOA, so for me it was a non-issue and I honestly never gave it much thought before this thread concerning mineral rights.
Rights do not seem to actually be conveyed or retained in any of the documentation I signed, unless I am just having trouble deciphering the legal jargon.
I am not sure where you got this information, but it was not from any research into the real property laws of the State of Alabama, or any real property law, for that matter. That full answer is much more complicated than that stated in your post, (or can be stated in this response). In short, if not specifically excepted in the deed, the mineral rights are included in any conveyance of a “fee simple” interest in real property. To clarify, if you view ownership of real property as a “bundle of sticks,” then “fee simple” includes the entire “bundle.” In order to transfer or convey less than the entire “bundle of sticks,” the seller has to “reserve” some of the sticks, or keep some of them and not transfer or convey the entire bundle. For example, if the seller transfers the property but wants to live there until she dies, then she “reserves” a “life estate” to the property; i.e., less than the entire bundle of sticks. In the Huntsville-Madison County market, it is most certainly the exception that any seller reserves the mineral rights (part of the bundle) in the deed.
Finally, it seems your logic is somewhat circular. If a particular seller reserves the mineral rights in his contract and deed, then presumably that seller believed that he had the mineral rights to start with, which means when he purchased the property the mineral rights were conveyed with the property. Which, according to this post, just does not happen. So in the end, the post begs the same question, why does a particular seller reserve mineral rights if there is nothing to reserve?
I got that information from a discussion regarding it at a closing with a closing attorney. Go search the probate records and actually READ some of the deeds...
Just pulled a RANDOM deed, from Woodland Homes, from the Madison Probate records....."This conveyance is subject to subdivison restrictions, utility, drainage, and sewer easements, and minimum setback lines if any, applicable to the aforesaid record appearing of property in the Office of the Judge of Probate of Madison County, Alabama. THIS CONVEYANCE IS ALSO SUBJECT TO ANY PRIOR RESERVATION, SEVERANCE OR CONVEYANCE OF MINERALS OR MINERAL RIGHTS." I sold a resale Woodland this past year, so I thought I would look up their deed, and the deed conveyed to the seller when they purchased. On the seller's deed from the sale from Woodland, it had the above verbiage. On the deed from the seller to my client, it did not. It had subject to restrictions, setbacks, blah blah. The seller could not convey mineral rights.....but on the same token they did not SEVER them in the new deed....but does that mean my client owns them because its fee simple and mineral rights are NOT referenced in the deed so its assumed they own the mineral rights? No.
This verbage is pretty typical on many deeds...not EVERY deed, but a good bit of them, just different wordsmithing. My point was this is not an oddity or just DR Horton being "greedy"....its pretty common.
And since you ARE schooling everyone on AL Property Law, you might want to remember that deeded ownership DOES NOT MEAN IT IS FILED IN PROBATE. The filing of deeds in probate just makes said ownership PUBLIC....it does not void the deeded ownership in any way if someone is out there holding a 100 year old deed to a property (or mineral rights on a property which is very often the case) someone else THINKS they own. Two words: TITLE INSURANCE.
In a nutshell, a seller cannot convey the "sticks" as you call them when they themselves do not own those "sticks"....and that is the case many times in regards to mineral rights. Sellers typically do not "reserve" these rights for that reason alone....and DR Horton probably has that in their contract because their contract covers A LOT since it is basically adapted from one they use nationwide (i.e. it is not written specifically for our market like our local board contract). Its not "circular thinking"....that is probably standard verbiage to apply to properties all over the US, regardless of IF they actually hold the deeded interest to mineral rights of said property or not. Understand?
As for the article about lenders "demanding" deeds with mineral rights.......I have never, ever, EVER had that come up neither here nor in Florida.....EVER.
Stoneridge was the builder, but I looked yet again and could not find anything in their contract concerning mineral rights. The mineral rights form was from the lender (Supreme) and doesn't seem to really cover ownership, but more of property damage reimbursement tied to discovery on the property. Basically, if you strike oil in your backyard, keep your mouth shut and they don't want to know about it. However, drilling is not permitted per our HOA, so for me it was a non-issue and I honestly never gave it much thought before this thread concerning mineral rights.
Rights do not seem to actually be conveyed or retained in any of the documentation I signed, unless I am just having trouble deciphering the legal jargon.
I have this too.
The builder (Valor) does not own nor make any claims towards any mineral rights to my property. But Supreme has this clause in my loan docs - and this is exactly what the attorney said in jest in front of everyone --- "if you strike oil in your backyard, keep your mouth shut".
The response proves my point- unless the mineral rights have been reserved in the chain of title, they convey with the property. The Woodland Homes deed simply says “subject to any prior reservation… of mineral rights.” In other words, if there was such a reservation, then the deed does not convey the mineral rights. If there wasn’t such a prior reservation, then the mineral rights were conveyed—that particular deed was not reserving the mineral rights. The “prior reservation” point is what makes the issue complicated. As I said in my original response to your post, this is much more complicated than you are suggesting and much too complicated to explain here. Nevertheless, while my response to your post admittedly does not deal with all of the issues, it is a correct, albeit general, statement of the law. Your post likewise does not deal with all the issues, but it incorrectly states the law. As for your statement about the public record and title insurance, I have neither the time nor the inclination to correct all of the inaccuracies. While you should refrain from giving out legal advice, the truth is, if people actually take legal advice from you, then they deserve what they get.
As a side note, I graduated from law school over 20 years ago, *** Laude, and I have closed over 10,000 transactions.
Quote:
Originally Posted by LCTMadison
I got that information from a discussion regarding it at a closing with a closing attorney. Go search the probate records and actually READ some of the deeds...
Just pulled a RANDOM deed, from Woodland Homes, from the Madison Probate records....."This conveyance is subject to subdivison restrictions, utility, drainage, and sewer easements, and minimum setback lines if any, applicable to the aforesaid record appearing of property in the Office of the Judge of Probate of Madison County, Alabama. THIS CONVEYANCE IS ALSO SUBJECT TO ANY PRIOR RESERVATION, SEVERANCE OR CONVEYANCE OF MINERALS OR MINERAL RIGHTS." I sold a resale Woodland this past year, so I thought I would look up their deed, and the deed conveyed to the seller when they purchased. On the seller's deed from the sale from Woodland, it had the above verbiage. On the deed from the seller to my client, it did not. It had subject to restrictions, setbacks, blah blah. The seller could not convey mineral rights.....but on the same token they did not SEVER them in the new deed....but does that mean my client owns them because its fee simple and mineral rights are NOT referenced in the deed so its assumed they own the mineral rights? No.
This verbage is pretty typical on many deeds...not EVERY deed, but a good bit of them, just different wordsmithing. My point was this is not an oddity or just DR Horton being "greedy"....its pretty common.
And since you ARE schooling everyone on AL Property Law, you might want to remember that deeded ownership DOES NOT MEAN IT IS FILED IN PROBATE. The filing of deeds in probate just makes said ownership PUBLIC....it does not void the deeded ownership in any way if someone is out there holding a 100 year old deed to a property (or mineral rights on a property which is very often the case) someone else THINKS they own. Two words: TITLE INSURANCE.
In a nutshell, a seller cannot convey the "sticks" as you call them when they themselves do not own those "sticks"....and that is the case many times in regards to mineral rights. Sellers typically do not "reserve" these rights for that reason alone....and DR Horton probably has that in their contract because their contract covers A LOT since it is basically adapted from one they use nationwide (i.e. it is not written specifically for our market like our local board contract). Its not "circular thinking"....that is probably standard verbiage to apply to properties all over the US, regardless of IF they actually hold the deeded interest to mineral rights of said property or not. Understand?
As for the article about lenders "demanding" deeds with mineral rights.......I have never, ever, EVER had that come up neither here nor in Florida.....EVER.
The response proves my point- unless the mineral rights have been reserved in the chain of title, they convey with the property. The Woodland Homes deed simply says “subject to any prior reservation… of mineral rights.” In other words, if there was such a reservation, then the deed does not convey the mineral rights. If there wasn’t such a prior reservation, then the mineral rights were conveyed—that particular deed was not reserving the mineral rights. The “prior reservation” point is what makes the issue complicated. As I said in my original response to your post, this is much more complicated than you are suggesting and much too complicated to explain here. Nevertheless, while my response to your post admittedly does not deal with all of the issues, it is a correct, albeit general, statement of the law. Your post likewise does not deal with all the issues, but it incorrectly states the law. As for your statement about the public record and title insurance, I have neither the time nor the inclination to correct all of the inaccuracies. While you should refrain from giving out legal advice, the truth is, if people actually take legal advice from you, then they deserve what they get.
As a side note, I graduated from law school over 20 years ago, *** Laude, and I have closed over 10,000 transactions.
Hold up....I am not, nor do give legal advice..... My post was addressing the fact that this is NOT limited to ONE builder nor ONE seller. I also simply pointed out that the majority of the time, DR Horton does not even HOLD the mineral rights to RETAIN. If I had a client who wanted to be assured mineral rights were conveyed with a property they were considering, I would recommend they speak to an attorney PRIOR to contract to ensure that the seller of the property actually COULD convey those rights.....as I do not do title abstracts and I would assume that a title abstract would be needed to discover who owns any mineral rights on a property. Correct?
And you stated (what I may not have expressed clearly) EXACTLY the point I was trying to make. The Woodland deed.....there is NO reservation of mineral rights on said deed, yet it states "prior reservation"....so if somewhere out there someone is holding a valid, deeded interest to mineral rights on that property, Woodland cannot convey them. If not, they can. That's the problem...and I think we both agree on that.
For what its worth, the deeds conveyed from Horton HSV to purchasers do not reserve mineral rights and actually do not reference them period on their deed....I pulled over 20 deeds from recent sales in the past two months of Breland homes. Yet cross reference those deeds and you will find a few that have separate DEEDMIN filed deeding those rights from Horton HSV to their energy holding. On many you don't....as Louis Breland retained any mineral rights in his conveyance to Horton HSV on the majority of those lots (or at least every deed I found between the two)....but then, did HE or someone else in the chain of title actually own those mineral rights re: had they been conveyed to him to convey to Horton in the first place? Maybe, maybe not.
I think you are confusing the point I am trying to make and I have confused the point you are trying to make....and I think that we both are stating the issue is complicated by the fact that many times these mineral rights have been separated out many, many, many years ago....and it may be referenced in the chain of title but that does not mean it is referenced on the purchaser's deed. Also that just because mineral rights per a contract are not conveyed or are reserved by the seller, that seller MAY NOT OWN THEM in the first place to reserve those right...so it becomes pointless verbiage in that case. That's the POINT I'm trying to make. DR Horton has "reserved" per the contract mineral rights on MANY properties that they themselves did not hold the rights to thus they cannot "reserve" them....nor could they convey them if that verbiage was struck from the contract between the parties.
But in regards to public filings, are you stating that it MUST be filed to be validated? Because that is how I read that statement. So you are saying that (for example) when a spouse executes a second deed at closing conveying part of their deeded interest to their spouse who is NOT on the mortgage or note for whatever reason, and they do NOT file that deed in probate (as the attorney cannot per their representation of the lender) that that spouse's ownership in that property is somehow not valid if they do not file that deed publicly (and this is exempting the agreements between the purchaser and the lender as that is another issue)?? Or what about when an owner gets married and executes a deeded interest to their spouse on a home they own that is NOT mortgaged.....not valid if they don't file it in probate? (I actually just closed a property where the spouse was holding a valid, UNFILED, notarized deed in her safe at her home that had been executed prior to her spouse's death on a property with no mortgage). So according to what your above statement indicates, her ownership may not have been "valid" because she has not filed her deed with the probate thus the general warranty deed conveyed to MY clients could be in question as well? Wow, and let's go even FURTHER that I am sure that would be a HUGE liability to the attorney (who is extremely highly respected) who handled that closing? That may not be what you intended to state, but that is the point I was making which you stated was erroneous, thus this is the conclusion that I have come to. Do you GUARANTEE on every single solitary deed you prepare for a closing that there is NO WAY there could POSSIBLY be any other ownership claims to a property out there? NO way?? Not even POSSIBLE??? See, that really seems like a HUGE limb to step out on from a liability standpoint, as I have NEVER EVER EVER heard those words pass an attorney's lips. I think most of the time attorneys can be "pretty sure" by examining records available to them but I have never had one state anything to the contrary.....in fact, most attorneys explain the title search, etc when going over the title insurance but generally preface that the title insurance is there to PROTECT them from a claim of ownership that may arise. Again, maybe I am just misunderstanding what you are stating and you are just misunderstanding the point I am trying to make....which is in NO WAY giving ANYONE legal advice....that is a HUGE stretch to make that statement.
Last edited by LCTMadison; 05-16-2013 at 09:16 AM..
DR Horton is indeed in NC, they set up shop to build the remaining homes in my subdivision, I would never buy anything from them. Technically I would never buy a new property, but especially not from them
I wouldn't buy a DR Horton house to begin with. I second what the OP said about them being the big, greedy builder that cuts corners...it's all about the share price and executive bonuses!
I tried to warn everyone when this happened. I live in a Breland community and DR Horton has already slashed prices and everyone is pissed off. Furthermore, we're unsure how everything is going to shake out because Horton supposedly said that they don't have any obligation to provide, enhance, maintain, etc. any of the amenities in the community.
I guess my home value is at the mercy of the stock price. Fortunately, we're not looking to move any time soon.
I tried to warn everyone when this happened. I live in a Breland community and DR Horton has already slashed prices and everyone is pissed off. Furthermore, we're unsure how everything is going to shake out because Horton supposedly said that they don't have any obligation to provide, enhance, maintain, etc. any of the amenities in the community.
I guess my home value is at the mercy of the stock price. Fortunately, we're not looking to move any time soon.
Ummmm....where are you at, because there was just a price increase across the BOARD of all Breland neighborhoods, and we are probably going to see another one due to increased costs for the framing packages (or so I have been told).
And in the deeds conveyed to DR Horton from Breland, it states that all maintenance company agreements and such stay in place, and also does not allow for Horton to change anything in regards to any neighborhood regulations.....so I am a bit confused.....
Ummmm....where are you at, because there was just a price increase across the BOARD of all Breland neighborhoods, and we are probably going to see another one due to increased costs for the framing packages (or so I have been told).
And in the deeds conveyed to DR Horton from Breland, it states that all maintenance company agreements and such stay in place, and also does not allow for Horton to change anything in regards to any neighborhood regulations.....so I am a bit confused.....
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