Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on November 12, 2020 at 2:31

Good morning, dot.  I don't recall anyone asking that exact question before.  I know it is possible to sell a share of undivided mineral rights.  I would think that the undivided surface ownership would not work without a partition agreement among all the owners of the undivided interest.  If a buyer wished to have use of the surface, that would not work without a partition to create a 100% ownership in the proportional acres.

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Permalink Reply by OLDDOG2020 on November 12, 2020 at 4:07

UPDATE:  I think I misread what Dot wrote.  I think she's saying she or her other members of the family are buying the property which is good.  Also, Skip im not trying to under cut you, just relaying what I just experienced.

"I would think that the undivided surface ownership would not work without a partition agreement among all the owners of the undivided interest. " - Louisiana law does NOT keep you from selling your undivided interest in the surface so you can sell your undivided interest without approval of other land owners.  

"If a buyer wished to have use of the surface, that would not work without a partition to create a 100% ownership in the proportional acres." - Correct.  

Dot and the other members should be concerned about the new owner buying it and having enough interest and money to take it to sheriffs sale.  In louisiana you have to have so much interest, I think its something like 17%, to take it to sheriffs sale. Anything less than that %age means you are safe unless the new owner starts buying out other members thus increasing his %age of ownership.

We had this happen to us several years ago when an uncooperative  family member sold 200 acres for 1000 dollars an acre with minerals and when the new owners sold it back to us it cost us 2500/acre without minerals.

I would suggest Dot and other family members approach the member wanting to sell and see if they could buy it or go through a partition before getting someone new involved that may not be a willing participant in working things out.

Notice:  Im not a lawyer but just went through this with our land.  Because we were working with cooperative family members things went very smoothly and everyone got what they wanted and were very happy, including the members who wanted out.  

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Permalink Reply by dot holloway on November 12, 2020 at 5:11

There are six of us and none seem to or can afford to purchase his part. Just want to keep it in the family. The % is low so don't think that would be a problem. Don't understand how I can purchase his part and just show a receipt. Need to know if  I have any legal steps to take. Like filing change of ownership with the court, and since it's undivided will I need a description of his part. It's not but 4.9 acres. 

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Permalink Reply by Skip Peel - Mineral Consultant on November 12, 2020 at 6:04

What is the value of that 0.81 acre interest?  Maybe $1620, 4.9/6 = .81 @ $2000/acre.  Is there royalty revenue currently?  If so a short term payout funded by royalty income might be modest enough for the other owners to afford.  Lots of moving parts here, dot.  Hard to be too specific without considering other issues.

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Permalink Reply by Steve P on November 12, 2020 at 7:56

in Louisiana, an effective sale of an undivided interest in land requires a deed, recorded at the Clerk of Court's conveyance records. If there are any improvements on the property (house, barn) then the sale of the undivided interest becomes more difficult.   My knowledge of Louisiana property law, but I recall any undivided owner can file for a "partition by licitation" which is the Sheriff's sale OLDDOG mentions.  It isn't clear to me if one can reserve and then maintain their mineral rights if the land is partitioned via sheriff's sale.

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Permalink Reply by Two Dogs, Pirate on November 13, 2020 at 3:10

I am not a lawyer but a landman that has to deal with this sort of thing all the time. He can sell you his interest in the property and reserve the minerals on his portion. You just need to have a deed in legal form with the property description drawn up and signed in front of a notary with two witnesses signing and file it with the clerk of court where the property is located. I would suggest that you have an abstract done with a title company or attorney to make sure he hasn't already sold his interest to someone else or incumbered his interest in some other sort of way. It is always best to have an attorney do this for you. A bill of sale is generally used for selling movables. You need to use a legal form like a Cash Sale Deed to do this transaction.

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Permalink Reply by Max on November 13, 2020 at 2:13

We went through this several years ago with my family.  Three of us stuck together and our attorney advised us to pool our money and take all the property to a sheriffs sale.  We didn't have enough money to purchase the properties, but we had enough to make someone else have to pay a fair price.  

We didn't have the sale because the attorney working for the others knew we were serious and convinced the other owners it would be better for them to partition the properties instead of taking a chance and having someone new come in and buy it.

Everything worked out for us.  A good attorney is worth a lot.

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Permalink Reply by dot holloway on November 13, 2020 at 2:20

appreciate all the information. probably best to get a good attorney and let him advise us. Things have to be so complicated. Ha! 

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Permalink Reply by full name on November 13, 2020 at 7:22

Had the same problem in the pre-shale days.  One relative pledged his undivided share against a loan without telling anyone and did not pay it back.  After it was all over we solved the problem by creating a LLC.  Everyone owns a portion based on the amount of property put in.  The property is deeded to the LLC and can not be borrowed against or sold to someone outside the LLC unless a majority agree.  No eternal valuation is required.  If one person wants to sell to another in the LLC, they can come to a price agreement and easily transfer the assets as a book entry in the LLC.  No additional deeds are required since all assets are in the LLC.  Also protects each individual against any lawsuits.  A good attorney can do this.

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Permalink Reply by full name on November 13, 2020 at 11:55

Make that Internal valuation. 

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