We plan to sell our home in Breckenridge Estates in 2011... live in Sec 24, T16N R15 W.
now that Chesapeake has drilled the first well in our Section 24 lease. When we move it is my understanding we hold mineral rights on this property in perpetuity. Is this a correct assumption? I know in LA one can only hold mineral rights for 10 years if there is not an active lease in play. Thanks in advance for any info on this ... expect many with leased lands have the same question. Best wishes.
You need to specify in all your home sales documents that you retain 100% all mineral rights. Otherwise, you're probably selling the mineral rights and royalties. I'd be sure the documents also mention that the property is subject to a mineral lease.
Be careful to read any offers you get to be sure that they include the fact that the seller reserves 100% of the mineral rights.
This is another case where you probably want to have a lawyer review all the documents to be sure the mineral rights retention is done correctly. The mineral rights are almost certainly worth more than $10,000 per acre, and the lawyer should be able to review the documents for a lot less. The "standard" mineral rights retention clauses are not that complicated.
Be sure the mineral retention clauses are in the deed that gets signed at closing. Something like "100% mineral rights owned by vendor are reserved by vendor..."
The documents here are worth reading. There are several mineral rights provisions in the Louisiana mandatory 2010 Residential Agreement to Buy or Sell form.
If you use a realtor, they'll help you fill out the forms, but remember, the realtor isn't your lawyer and they have a strong financial incentive to make the sale happen, not necessarily to protect your interests. Don't trust your realtor. Don't trust your lawyer either, but figure out where their own financial self interests lie.
Be very careful to read each offer carefully before signing. It's easy to "flip" the wording on the form and change it from you keep the mineral rights to you sell the mineral rights. It should say "100% mineral rights owned by SELLER are to be reserved by SELLER." It specifies what percent you RESERVE, not what percent you SELL. Buyers (and some agents) will try to slip this by on you.
Even if the lawyer says it's OK, read it yourself, especially the mundane details of the data on the documents. Sometimes, they miss things, too.
True, if you know what to do. As long as you don't do something like sign a sales offer and not notice it includes mineral rights before it gets to the title company, if you know to ask the title company, check to be sure the paperwork is right, etc.
I think I understand a lot of the concepts, and I was still nervous. I could see several places in the process where you could make a bad mistake. Especially if you're not familiar with the process.
At one point, I read things backwards and thought I was selling 0% of the mineral rights, when in fact I would have been keeping 0% of the mineral rights, if I hadn't caught it in time.
I think those of us who know about such things don't realize how confusing the process is to a normal person.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More