Replies to This Discussion

Permalink Reply by Bobi Carr ("parker") on October 8, 2008 at 5:06

Kellie,

There are so many factors that exist in figuring out whether someone owns mineral rights or not, it would be cost prohibitive to have this as a requirement of closing.

But, if you had a contract to purchase and the developer did not acknowledge that he was reserving minerals but then changed the stipulations at closing, you need to
see an attorney, pronto. You may be able to have the sale rescinded.

But another scenario that might have happened is that the developer already divested himself of the minerals prior to signing your contract and was just acknowledging that fact to you at closing.

You need to ask the title company what the circumstances were before you do anything further.

I own property that the minerals were reserved in the 50's, it never came up in closing. I would have purchased the home with or with out minerals. If I would have
gotten them, that would just have been "lagniappe".

GOOD LUCK

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Permalink Reply by Grice on October 8, 2008 at 5:08

Only if the seller actually owns the mineral rights at the time of the sale. Should the seller not own the mineral rights, they would be under no obligation to disclose terms in which they are not a party to. This is where a proper title search should have been done, including mineral rights ownership. Often, a simple title search will not include research of mineral rights, but only the title ownership of the property. If you feel you have been misinformed, please consult a member of the legal profession.

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Permalink Reply by P.G. on October 8, 2008 at 7:07

All a seller has to disclose are material defects. And that may only apply to a home and not commercial property or vacant land. And also if the property was sold to you by an absentee owner, he may just claim he doesn't know anything about the property. Go to the Louisiana Real Estate Commission's website. They have the rules there about that stuff.

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Permalink Reply by WHuguet on October 8, 2008 at 9:07

IMHO, this area is rife with confusion.

People forget that the public records doctrine in Louisiana is a lot like buyer beware. You are presumed to know the prior title (it is public), although determining whether old servitudes (over 10 years) have been maintained can sometimes involve a lot of work and expertise.

As was previously stated, a lot of times the minerals (or a portion) may have been reserved 2 or more transactions back and are owned by other parties not a party to your sale. The typical sale includes language about selling all right, title and interest in Property, which would include any minerals the seller may own. This typically will not rise to the level of warranty vis-a-vis the minerals or provide a means of rescinding a sale. For example, I don't own the minerals under my lot even though my deed is broad in the granting clause because the minerals were reserved over 10 years ago and that servitude has been maintained by production. This is something that most people with prior servitudes simply have to accept.

However, there are scenarios that may play out differently, especially if the seller made representations he owned the minerals, the minerals were a "cause" or significant object of the sale, or situations where the seller transfers the minerals to an LLC he owns just prior to the sale, etc. All those cases will turn on their facts and what kinds of Buy/Sell Agreement and negotiations the parties had.

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Permalink Reply by barneyfife on October 8, 2008 at 9:14

Also to change your facts a bit, if the Seller conveys the surface and reserves lets say 1/2 of the minerals and does not note that the sale is made subject to prior mineral reservation, and further the instrument is a warranty deed, then the reservation will fail. This is due to the warranty and the assumption that the buyer is acquiring 1/2 of the minerals. The prior reservations exist, but the seller has warranted that the buyer is to receive 1/2 of the minerals, therefore he does at the Seller's expense.

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Permalink Reply by P.G. on October 8, 2008 at 9:41

If the seller fails to mention any minerals, then wouldn't the buyer get what ever the sellers interest in any minerals were? If the seller had no mineral rights to start with then the buyer wouldn't get them either, correct?

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