Land Buying Do's & Don'ts...

[Gale Hawkins]

We had a sales contract to purchase a farm which stated that we would have all mineral rights to the property. At closing I read the newly prepared deed and found that one company owned coal rights, a second company owned gas rights, and a third company owned oil rights. Finally, there was a restriction on timber rights also. This was all a complete surprise!

We did not sign the closing documents and said these issues needed to be resolved to our satisfaction. It took about 3 weeks and we obtained releases from all parties regarding mineral rights and the timber restriction removed. After everything was straightened out we did in fact close on the property and have had no problems at all. We did elect to purchase title insurance for the property.

I suggest you use a good real estate attorney to look after your interests.

That was a good job of protecting your future assets and reminds us all to read before we sign anything.

 

[buck12]

Beware of unrecorded easements. If there are trails on the property, one of your neighbors may have an unrecorded easement - which, under the right set of facts - is just as enforceable as a recorded easement.

Good luck!

Please explain more as to unrecorded easements. I have not heard of this before and would like to know more because one day soon I hope to purchase more land.

 

[Gale Hawkins]

What is an unrecorded easement?

 

[SBB]

The web site that Gale Hawkins linked to is a good explanation of an unrecorded easement. It will vary state to state, but the easiest example is someone who drives over a neighbor's property over a long period of time can create the legal right to continue to do that. That legal right won't appear in a title search and it is not extinguished just because the neighbor's property is sold. If this is something that you are concerned about before you buy property, the first thing you should do is just look to see if it appears anyone is making use of the property you want to buy and/or ask the seller if that is happening. Then compare what you see/hear with what's recorded on the title. In my part of the country (and I suspect it is like this in most places) standard title insurance won't protect you from an unrecorded easement, but you can purchase an "extended" title policy that will. You'll most likely need to get a survey done to purchase an extended policy.

 

[R_Walter]

If the mineral rights don't convey and you are located on a potential oil&gas reservoir, then you could have drilling rigs and derricks on your property w/o any recourse.

 

[jayste]

If the mineral rights don't convey and you are located on a potential oil&gas reservoir, then you could have drilling rigs and derricks on your property w/o any recourse.

Or they could be next door drilling under you.... Which I guess could be good as to not have the surface problems.

 

[sweettractors]

Well fella's,

After further research, I'm please to find that: There are no restrictions, easements, utility problems, access issues, or privacy issues.

A few positives learn are that the neighbors are good people (only 3 families). The property is on a dead end street. It borders a super fertile bottom, with 500 acres of land locked government owned public land (locked by the 3 families & the proposed property). This gov land was bought up to conserve the wetlands in this bottom. The property & gov land have excellent deer, duck & turkey hunting (important to me).

Now for the negatives found. The price is at the upper level of what I am willing to spend. Also, the mineral rights are tied up for the next ten years. I was prepared for this though because every single family in the Parish in which I live has their minerals leased due to the haynesville shale gas field which was found 3 years ago. Its the largest natural gas discovery in this nation's history. Due to this, land is becoming harder & harder to find, because families are getting rediculous royalty checks & not needed to sell land. So I feel like I need to make it happen now or the opportunity might not arise for a long, long time.

Thanks for all the help fella's, JY.

On the positive side, Is there royalty payment to come to you yearly on the gas lease rights. If they drill a well during the lease period, you can probably get free gas in your home and shop out of the deal. The standard gas lease here in Ky gives the land owner 1/8 share of what is produced. This could be a chunk of change for you in the future. We have 14 gas wells on our property and it is not that big a deal to work around them with our implements, The state usually makes them put up a substantial bond for any possible property damage Ken Sweet

 

[MarkV]

I was also wondering if they just had the mineral rights or the right to come do test wells and set up a full production well on the land. That would make a big difference in the aesthetics of my place and how I felt about it.

MarkV

 

[R_Walter]

On the positive side, Is there royalty payment to come to you yearly on the gas lease rights. If they drill a well during the lease period, you can probably get free gas in your home and shop out of the deal. The standard gas lease here in Ky gives the land owner 1/8 share of what is produced. This could be a chunk of change for you in the future. We have 14 gas wells on our property and it is not that big a deal to work around them with our implements, The state usually makes them put up a substantial bond for any possible property damage Ken Sweet

Not if, as he said, the mineral rights do NOT convey!!!

 

[sweettractors]

Not if, as he said, the mineral rights do NOT convey!!!

I just recently bought a 32 acre tract and the previous owners lease conveyed to me. This tract has a monster gas well on it in the Black Shale formation. Ken Sweet