Replies to This Discussion

Permalink Reply by Mac Davis on March 25, 2010 at 12:45

IANAL - I Am Not A Lawyer

The lease sounds like a valid concept. However, there are lots of weird gotchas in the law, especially mineral law. Be sure that the lease purchase agreement clearly spells out that they're not getting any mineral rights. Be sure that you're not obligated to sell before the mineral date.

I wonder if you should allow some sort of extra time in the actual sale date to allow for any delays in the true expiration time. For instance, is it the day the sale closed, or the day that the county clerk finalized the paperwork for the sale 10 years ago? What does the paperwork actually list for the date?

Plus watch out for any non-mineral gotchas in a lease-purchase agreement. For instance, who pays the taxes?

Permalink Reply by Florida Ginnie on March 24, 2010 at 13:49

Thanks Harold, so.......which way can i sell the surface to protect the maybe minerals? Lease -option? Thanks

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Permalink Reply by Skip Peel - Mineral Consultant on March 24, 2010 at 13:30

Pardon me for misunderstanding. When we discuss "leasing" here on GHS, it's about minerals. I think you could do as you say with a lease-purchase contract. However that question is best put to real estate professional. Not landmen.

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Permalink Reply by Florida Ginnie on March 24, 2010 at 13:43

No problem.....But are the realtors educated enough to do this? I mean If I tell them my intentions, like i just did to you, explaining I do not want to sell now i want to keep the property in my name and just do lease -option to buy for one year? Then i can see if there is no production if i get the minerals reverted to me.Then I can close the deal and hold minerals that where reverted back to me, and sell and record the surface (land) only to these people that did this lease-option to buy with me. That way I do not loose a buyer for the land if the minerals do not come back to me i will still have a deal and money with these people. I just do not know Louisana laws and when I tried several attorneys I get no-where on this issue. I guess I will call some realtors tomorrow see what more i can find out. Like when someone does a deal like this does it get recorded? thanks a bunch

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Permalink Reply by Florida Ginnie on March 24, 2010 at 13:59

already did tell buyer they said no problem. Thanks

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Permalink Reply by Florida Ginnie on March 24, 2010 at 14:07

Great thanks very much. Will do research and phone calls, before I sign anything, for i am all about the writing, but not the Louisana laws. Take care

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Permalink Reply by Henry on March 24, 2010 at 23:53

ALongview,
"...a contract must be in writing to be enforcable." Is this really true? Aren't there any number of so-called implied contracts? E.g., when you eat at a restaurant, you don't sign anything saying you will pay at the end of the meal. This is an implied contract. Of course, a complex transaction, if not in writing, might be difficult to prove in court. But, if one has witnesses to the oral agreement wouldn't that suffice?

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Permalink Reply by Florida Ginnie on March 26, 2010 at 6:21

oral witness is water not on paper with signatures and dates and in attorny's office and notarized signatures.

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Permalink Reply by Mac Davis on March 24, 2010 at 21:47

The real estate agent will tell you whatever is most likely to get their commission paid. They may not deliberately lie, but they have no skin in the deal once they get paid. If they're wrong, you're the one who's out of luck.

Even a reasonably good real estate lawyer may not know the intricacies of the mineral laws.

You'll need a good lawyer who knows real estate and mineral law to get the "right" answer. Even then it might be risky. Even the lawyer may be wrong, but you are still the loser.

How many acres are involved?

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Permalink Reply by Florida Ginnie on March 25, 2010 at 4:16

just 10

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Permalink Reply by Mac Davis on March 25, 2010 at 13:17

Try and estimate what the value is to you for the mineral rights. You'll have to make some guesses for what royalty payments will be over the life of the property. I looked at some property in a better part of the play and my best estimate was that the mineral rights would pay out $80,000 an acre over the next 20 years. Unfortunately, this is very uncertain due to fluctuating gas prices, uncertainty of long term production rates, etc. However, $80,000 was my best guess for the "average" payout. It could be $0, it could be MUCH more. That's the number I used for my own planning purposes. If I get nothing from it, it won't be the difference between me starving and being comfortable.

Make your best guess. I'd take a wild stab at $40,000 per acre in your area, but that's truly a WILD guess, especially because there's not a lot of wells nearby.

Also figure out what you think it will cost you to simply wait. Yes, you may lose the sale you have in the bag right now, but what do you think you could sell it for in 2011? Is the offer really good, or could you probably sell it in 2011 for a similar price?

It would be useful to find out if there's any leasing activity in your section. If no one is leasing in your area, that makes it even more unlikely there will be production in your area before Feb 2011. In theory, you can look up leasing info at the courthouse, but I don't know how hard it is to find on your own. You might want to at least find out if there's a lease on your own property.

Would one of the smarter guys confirm this statement, please: "If the current mineral owner leases before Feb 2011, and there is no production, the lease becomes invalid in Feb 2011."

I'd be REALLY leery of taking any advice from the real estate agent or the title company. They concentrate on getting the sale done. If you find out later you don't own the minerals you think you do, it's no skin off their nose. The title company, in particular, is biased toward protecting the buyer, not the seller.

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Permalink Reply by Stacey Avant on March 25, 2010 at 3:48

If you dont own the minerals, then you cant sell them. You only own the surface rights, so thats all you can sell. If you wait til Feb 2011 and there is still no production, then the minerals become yours. Then, you can sell the surface rights, but reserve the minerals. Make sure you have a reservation of the minerals in your sales deed. Then, you hold them for 10 years. That is the only way it will work, but right now, you cant sell what you dont have. And, if the current mineral owner leases the minerals, you may never get them.

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