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Discussion Starter #1
We are purchasing an additional 41 acres of property adjoining us. The sellers are retaining all mineral and gas rights.
My question is in the event of the sellers death [God forbid] would the mineral rights transfer back to us or would they transfer to the sellers heirs?
I am meeting with our attorney this week and will ask him but thought I would ask this knowledgeable bunch. It does not say anything about this in the sales contract. Just that they are keeping the mineral and gas rights.

My thoughts are that if the sellers think they might profit down the road from a gas well while they are alive [there is a lot of gas drilling in our area] great, but I think all rights should transfer back to us if something would happen to them.
 

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If they also have an attorney (who is worth his salt), I'll be willing to bet that the contract will read that the mineral/gas rights will be retained and transferred to his heirs in the event of his death. Of course you can always try to have this re-worded in your favor........but be advised that this could be a DEAL-BREAKER if you decide to force the issue. Just depends on how badly you want the land or how much they wish to sell it. :shrug:
 

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Unless their are special phrases used the minireal rights are passed to the heirs. It is property and it goes to the heirs unless you are mentioned in the will to get them.
 

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Discussion Starter #4
Yes, they also have an attorney. The situation is a difficult one. When we purchased the original property [10 acres with house and outbuildings] 4 years ago. The sellers [there were friends of ours, note I said were]. Had agreed to sell us the 10 acres that we would purchase through conventional financing and do a land contract for the additional 41 acres with a balloon payment after 5 years. We did not have this in writing as they were friends.
Once we bought the initial 10 acres they went back on the land contract agreement.
Last year they again said they would sell the land. This time they did have a sales contract written and there was nothing about retaining gas rights. Due to unforeseen circumstances with financing we were late on the closing date by one day. The day we were late the rescinded the agreement. I did have financing in place, we were approved. Last year there was heavy interest from the gas companies and I know they backed out thinking about the all mighty dollar.
We confronted them about this a couple months ago. They proclaim to be born again Christians now so I said if you really are what you say you are you will step up to the plate and do what you agreed to and keep you stupid mineral rights. So that is how the new contract for the land is. We called them on what should have been ours from the beginning. We would have NEVER bought this place for 10 acres. It was the additional land that we wanted.

I want the land but at the same time I feel that if something happens to them we should have the benefit of what was promised to us from the beginning.
 

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Probably a little late now but I would ask that the minerals rights revert to you upon their deaths, unless there happens to be production, then it would go to their heirs until any production ceases, then revert to you. OR 50% upon their deaths IF there is production and the remaining 50% reverting to you upon production ceasing.

You probably don't have any leverage to accomplish this gain, but it still might be worth a try.
 

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I agree. Too late now.

You agreed to a contract with no mineral rights. You will now have to pay more for those rights.

Than again, miracles do happen.

Jill
 

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Who is responsible for surface ground contamination, groundwater, once any mineral/gas work commences, and if you want to sell the parcel in the future will any problems be on the land title, will any problems from others make it unuseable or unsaleable?
 

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fordy said:
....................Only foolish folks sell their mineral rights . ,fordy
fordy, you are a wise man....

and a corollary to that saying would be.......... only foolish folks ever get their mineral rights back...

Having mineral rights under lease in an operating unit, is like having a money machine. Once they're sold off for a pittance, a lot of folks see the light and realize they sold/gave away, whatever, something a minimum 5x the worth of the surface land. I've got some royalty that paid a hundred bucks an acre for a couple years. The land was sold for 500$/acre! Thousand bucks an acre/year just for minerals!

back to OP...
I'm sorry, but your royalties (check that! they were never in your possession, so you can't have something you never had in the first place) will never revert back to you. Unless the current owners are fools. Doubtful their children would give em away either.

It's almost impossible to run up on a Rube these days that'll sell land & minerals... One of my 2nd cousins sold his place next to mine (after promising me he'd sell it to me... whatever)... 100 acres, and in the fine print his purchaser (land lawyer), included the royalties. He sold the land for 600/acre... 60K! The royalties pay the current owner 10K+ each year.
 

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Wont hurt to ask for them to revert to you after a specific time or upon death .
BE SURE To point out to them that they will beLIABLE FOR TAXES on the part of the estate(mineral rights) that they retain and they might WANT to limit that by only retaining the rights a certain period (20?years) unless production is taking place.
 

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You broke the contract so they had the right to do what they did. I don't know what the born again christian statement has to do this. I'm sure in the same situation you would have done what they did. Just get over it.

Nancy
 

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Yep, once gone in a legal contract they are pretty much gone. One positive note though, if they drill on that parcel of land, they'll use up several acres in that operation with the derrick and associated equipment, water pond, etc, and you might be paid a fee for occupying the surface area. It won't be much, a fellow near here had no mineral rights, but when they drilled they paid him 28,000 dollars and restored the land pretty much to it's original condition when they left, less a bunch of topsoil on about an acre and a half. He was happy, they didn't hit oil and he was the only one to gain from the venture.
 

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When we bought our farm, the sellers retained the mineral rights until their passing, then they revert to us. There are lots of gas wells in the area, so people there know what they are worth.
 

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Around these parts, land with mineral rights is more expensive than land without mineral rights. In essence, if you buy land without mineral rights and later on you want and have the opportunity to obtain the mineral rights, you buy those rights from the owner of the rights. Why should someone give you the mineral rights for free?
 

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You had a chance to buy the property with the mineral rights. The transaction failed to take place because of YOU, not them.

They are under no obligation to sell you the mineral rights. Or anything for that matter. Oral discussions mean absolutely nothing. You seem to think that these people owe you something. They owe you nothing.

If you think the mineral rights revert to you after their passing, dream on. This will occur ONLY if its written in the sales contract. I doubt they would put such a foolish clause in the contract.

Be aware that they are free to sell, donate or do whatever with the mineral rights at any time.
 

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Discussion Starter #16
Hoop said:
You had a chance to buy the property with the mineral rights. The transaction failed to take place because of YOU, not them.

They are under no obligation to sell you the mineral rights. Or anything for that matter. Oral discussions mean absolutely nothing. You seem to think that these people owe you something. They owe you nothing.

If you think the mineral rights revert to you after their passing, dream on. This will occur ONLY if its written in the sales contract. I doubt they would put such a foolish clause in the contract.

Be aware that they are free to sell, donate or do whatever with the mineral rights at any time.
The transaction failed because the appraiser did not do HIS job in a timley manner. By the time the apprasel was done and all the paper work it went past the closing date by 1 day. If we wanted to be sticklers on this the contract also said contingent on attorneys schedules and we could have pursed this but choose not to.

In my day when some one gives their word that should be enough. PERIOD. These people were not strangers, they were so called friends and if a friend tells you they will do something that should be enough. We learned the hard way that everything has to be in writing.

I will meet with our attorney Thursday.
 

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Hoop said:
You had a chance to buy the property with the mineral rights. The transaction failed to take place because of YOU, not them.

They are under no obligation to sell you the mineral rights. Or anything for that matter. Oral discussions mean absolutely nothing. You seem to think that these people owe you something. They owe you nothing.

If you think the mineral rights revert to you after their passing, dream on. This will occur ONLY if its written in the sales contract. I doubt they would put such a foolish clause in the contract.

Be aware that they are free to sell, donate or do whatever with the mineral rights at any time.

Well said Hoop.

Tracy, you seem to be having trouble understanding the reality of this situation. They owe you nothing. It was your responsibility to get your ducks in a row, re the appraiser. You don't have any leaverage. You would do well to get over it and not make it difficult during any future negotiations.
 

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if the oil co. wants to lease your rights hold out for a better price then lease
if you dont sign they will take you to court on eminent domain then they will give you what they want, people 5 miles from here was offerd 500.00 an acre they said no, after a battle in court they got 35.00 an acre
 

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Sorry Tracy, but you are out of luck. The mineral rights are property and can be sold with the land or not - it's totally up to the seller.

Just because you think the mineral rights should revert to you upon their death doesn't mean a thing.

My guess is, that when the "deal" was originally made, there wasn't any drilling in your area. Now gas companies have come in leasing the mineral rights to drill for gas, and probably putting in gas wells right and left. (That is what has happened around here.)

Around here, most gas wells seem to produce on average $300.00 / month per well. That $3600.00 per year sure can come in handy!!!!

You now have to decide if you want to buy the remaining property without the mineral rights or uproot and go elsewhere. Even if you do buy the property and it is leased to a gas drilling company, doesn't mean they will drill. (I've seen plenty of land leased, and then drilling isn't done due to previous wells on adjacent property not producing much.)

If this is gas drilling you are talking about, drilling for gas doesn't really take up much room. Initially for clearing, building a holding pond, and preparing the drilling sight they might take up 1 acre. After drilling is done, you have some pipe sticking out of the ground, usually a tank for holding efluence from the well, and some metering equipment. Once drilled, the actual gas well doesn't take up much property at all.

I'm wondering what your intentions are to get the mineral rights. Are they to prevent drilling so your dream, homestead property isn't "spoiled", or would you "cash in" like your ex-friends might?

And fordy is correct, I don't think I would ever sell the mineral rights to property I own. (Of course, it take a miracle for me to decide to sell any property to begin with!)

Sorry, Tracy, you missed the boat and nothing can be done about it.
 

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Personally, I wouldn't buy land without mineral or gas rights. Do you somehow *have* to purchase this additional land? If not, don't bother. There's better deals to be had elsewhere. Even if that means selling the 10 acres you currently have.
 
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