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View Poll Results: Should home builders tell their buyers that mineral rights on the new property are not included in t
Yes 17 77.27%
No 5 22.73%
Maybe 0 0%
undecided 0 0%
Voters: 22. You may not vote on this poll

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Old 10-09-2013, 08:19 PM
 
Location: Beautiful Northwest Houston
6,290 posts, read 7,494,183 times
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Did you know when you buy your spanking new house, that may have been custom built for you, on land that you paid for, that your builder may have, and probably did retain the mineral rights under your home sweet home?

"homebuilders and developers have been increasingly—and quietly—hanging on to the mineral rights underneath their projects, pushing aside homeowners' interests to set themselves up for financial gain when energy companies come calling. This is happening in regions far beyond the traditional American oil patch, which has a long history of selling subsurface rights."

Builders secretly hoard mineral rights under property

Publicly traded companies that engage in the practice include the Ryland Group, Pulte Homes and Beazer Homes, according to oil and gas attorneys and public land records.

D.R. Horton, the biggest U.S. homebuilder, is a heavy user of the practice. The Fort Worth, Texas, company has separated the mineral rights from tens of thousands of homes in states where shale plays are either well under way or possible,

What do you think about this practice ? Did you ask if the mineral rights were included when you bought your house?
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Old 10-09-2013, 08:38 PM
 
Location: League City, Texas
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The last two houses we bought (within last 15 years) included clauses in the closing papers stating mineral rights weren't included in the sale. Since both had minute lots, we didn't think it a big deal. But I would be interested as to how they do this with larger lots or acreage.
What would've happened to Jed Clampett (I know--not in Texas)if he hadn't had mineral rights?
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Old 10-09-2013, 10:31 PM
 
Location: Austin, TX
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This is pretty much common knowledge to anyone at all informed about property transactions. The mineral rights have often been severed many years prior to the developer selling you the land.
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Old 10-09-2013, 10:42 PM
 
Location: Wonderland
67,650 posts, read 60,867,486 times
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In Texas, it's very common knowledge that mineral rights very rarely convey with the land - and in fact, if they do, then expect to pay quite a bit for them.

And yes, I did ask about mineral rights before I bought my house - and I would have been absolutely gobsnockered if I'd been told they DID convey. It's a very rare thing to be able to pick up mineral rights along with a new property purchase in the state of Texas (as well as other states with similar structures when it comes to mineral rights - Arkansas for example).

In fact, the developer probably didn't even get a chance at the mineral rights - they're probably split into microfractions by about 120 great great great nieces and nephews of the original owners at this point.
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Old 10-10-2013, 12:27 AM
 
Location: Beautiful Northwest Houston
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Quote:
Originally Posted by KathrynAragon View Post
In Texas, it's very common knowledge that mineral rights very rarely convey with the land - and in fact, if they do, then expect to pay quite a bit for them.

And yes, I did ask about mineral rights before I bought my house - and I would have been absolutely gobsnockered if I'd been told they DID convey. It's a very rare thing to be able to pick up mineral rights along with a new property purchase in the state of Texas (as well as other states with similar structures when it comes to mineral rights - Arkansas for example).

In fact, the developer probably didn't even get a chance at the mineral rights - they're probably split into microfractions by about 120 great great great nieces and nephews of the original owners at this point.
I think it should be a mandatory acknowledgement weather it is common to sever the rights or not. Development of those rights can adversely affect the value of your property and very few people would ever think about asking prior to purchasing a home. Especially the newbies from out of state.

I have some experience with mineral rights from the other end. I own a small mineral interest in South Texas that I do receive a small royalty for, from time to time, whenever the accrued amount exceeds $25 which may happen once a year, then of course I get a similar check for the rental as well. And you know what ? I have no idea who owns the surface rights, but from what I understand it is still undeveloped property. I am one of those Great great ,great nephews you speak of. lol

I get offers constantly from gas producers who send me what I call warranty deed checks for a couple hundred bucks to sign over rights to whoever. So there is interest in these rights, and I doubt my many relatives who are joint owners in this property know, or care that we may be hurting somebodies resale value by developing those fields. So I do think buyers should be made aware of these possibilities....
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Old 10-10-2013, 03:51 AM
 
Location: Central Texas
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Not sure what you mean by "mandatory acknowledgment" whether it is common to sever the rights or not. Could you clarify?

My buyer clients almost never care about mineral rights, perhaps because any income from the mineral rights to a normal lot would be tiny. Heck, they're tiny enough as my portion of the mineral rights on the old family farm here in East Texas in oil country - and mine is based on 40 acres and I'm a grandchild, no greats involved! For an idea, imagine all those great, great nieces and nephews multiplied by the number of families in a normal housing subdivision.

The Texas Farm and Ranch contract does reference mineral rights on the first page (2.F.) and has an addendum for it, but the 1 to 4 Family Residential Contract does not reference it at all. A concerned buyer could, of course, ask, but chances are that the rights were, as KathrynAragon said, gone long ago, or the developer paid a pretty penny for them.
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Old 10-10-2013, 07:06 AM
 
Location: Beautiful Northwest Houston
6,290 posts, read 7,494,183 times
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Quote:
Originally Posted by TexasHorseLady View Post
Not sure what you mean by "mandatory acknowledgment" whether it is common to sever the rights or not. Could you clarify?

My buyer clients almost never care about mineral rights, perhaps because any income from the mineral rights to a normal lot would be tiny. Heck, they're tiny enough as my portion of the mineral rights on the old family farm here in East Texas in oil country - and mine is based on 40 acres and I'm a grandchild, no greats involved! For an idea, imagine all those great, great nieces and nephews multiplied by the number of families in a normal housing subdivision.

The Texas Farm and Ranch contract does reference mineral rights on the first page (2.F.) and has an addendum for it, but the 1 to 4 Family Residential Contract does not reference it at all. A concerned buyer could, of course, ask, but chances are that the rights were, as KathrynAragon said, gone long ago, or the developer paid a pretty penny for them.
Mandatory disclosure, would be a better term. I'm saying who owns the mineral rights should be disclosed to the potential buyer. Future development of those rights is more of a concern than the distribution of some tiny royalty.

Home buyers should at least be able to research for themselves what any future development may mean for their new neighborhood, or what the likelihood of development is or may be
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Old 10-10-2013, 07:46 AM
 
Location: Austin, TX
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Quote:
I'm saying who owns the mineral rights should be disclosed to the potential buyer.
But that could change 5 minutes after you buy the property, or 5 years, or 20 different times over the course of several years.....
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Old 10-10-2013, 08:28 AM
 
Location: Beautiful Northwest Houston
6,290 posts, read 7,494,183 times
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Quote:
Originally Posted by Trainwreck20 View Post
But that could change 5 minutes after you buy the property, or 5 years, or 20 different times over the course of several years.....
What I would want to know is, is the guy who is selling me this property the owner of those rights, and if he is, why is he holding those rights. It would seem to me that there is a potential conflict of interest if he were to sell those rights, in the future, and possibly harm the value of the property he is selling me. I would also want to know if the mineral rights under my new home is currently under a lease agreement which would tell me there is an increased likelyhood of future exploitation of those rights.

I assume that every bit of land in this state is owned by somebody or thing, and likewise there are corresponding mineral rights to all that land. All this is part of the public record and would be easily attainable especially to a developer.

Once the property is sold the owner would be solely responsible for keeping up with any future conveyance of those rights.
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Old 10-10-2013, 09:05 AM
 
Location: Austin, TX
15,268 posts, read 35,622,212 times
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Well, generally speaking, if you are in a 'dense' development (i.e. you area 10' or so from your neighbor), the mineral rights will only be accessed remotely - horizontal drilling, in the case of oil, or not at all in the case of stone. As such, I don't find it very interesting as to who hold those rights. If you are on larger property, where on-site access is possible, then you should go out and find who holds the rights; however, I don't think that information needs to be 'paid' for by everyone, since most people don't really care/are unaffected. And it will have to be paid for, public record or not, just like the dozen or so other 'fees' that a title company/lender/etc charge during closing currently.

Especially in the counties, there are many, many other things that can affect your property - what if they build a chicken farm next to you? Or a rendering plant? or a Short circuit race track? Those are almost totally 'random', whereas you can pretty easily see if you are in the Eagleford or Barnett Shale areas
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