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

[two_bit_score]

Sorry about the delayed response fella's, been tied up at work. WOW, I did not expect this much response this quick!!! All of the replys have had great info in them. I was pleased to find that I've covered several of the issues already. But there are still things that I just learned in reading your reply's that I wouldn't have thought of, so that is greatly appreciated.

I was unaware that my location wasn't on my User tag. The Land is located in NW LA. Being in Louisiana there isn't any issues with snow. There is however tons of water down here. The other day I walked the land after several heavy rains & there were no drainage issues in the tillable land or homesite areas. The timbered section consists of ridges & drains that would be ideal for hunting, but not ideal for building anything. The 8 acres of tillable ground is all on a table top ridge, perfectly flat & has good loamy soil. The perk test for septic is the only thing I haven't a clue about. Also the legal things are alittle touch & go. The advice to get a real estate attorney will suit me well. I also talked to a loan officer with the Land Bank & he was more than insightful. Thanks to all for the tons of help, JY.

I'm jumping in a little erly maybe without reading all the posts so someone may address this before me. I don't know if you are 'from' the NW LA area or not but you may be in an area that is undergoing some extensive mineral exploratin. LA has some mineral rights laws that seem odd to me, being from Texas. But you should definately go in with eyes open in respect to that issue.

Even in LA the mineral estate is superior to the surface estate - meaning the mineral owner or his lessee can come on your property and explore for minerals and you cannot stop them. There are some limitations but not many on what they can do. Just be educated and aware of what you are buying.

I know several people who bought their little piece of heaven on eart in NE Texas years back and never gave a thought to not getting the mineral rights and now they have a gas well 600' from their back door running 24 hours a day with all kinds of traffic in and out of their property. Worst thing is the aren't getting paid a dime other than a little for 'surface damages'.

Edit: I see now after reading through the entire thread that you are 'from there' and well versed in the issues involved with the mineral rights. Good luck with your property purchase and hopefully the prescription will run and you may regain the minerals at some time and then lease at a good rate and terms after gas goes up to $11.00

 

[two_bit_score]

Eddie, very good information. The mineral rights are so often overlooked by anxious buyers, a decision that is regretted latter. I have always wondered why the mineral right owners do not have some obligation to a pay percentage of the property tax. ??

A mineral owner would say that they pay plenty of ad valorem tax once production begins.

 

[CubMon]

You may hold a piece of paper that says that you own the mineral rights but unless you are able fight the federal government lawyers and or a large corporation who desires to take them, you hold a worthless document. If the minerals were that plentiful or worth so much, taking them from you would be a game called "for the good of all". Welcome to the USSA.

 

[R_Walter]

The Homestead Act of 1909 was how many ranchers and farmers in the Western US came to own their own land. However, the mineral rights were not part of the deal then; the Act required a homesteader to perfect the mineral rights after taking title (deed issued by the Federal Gov't), usually only after five years of improvements had been made to their half-section. To perfect the mineral rights a homesteader had to pay $2 per acre (this amount varied in different parts of the West) and travel to the county seat to do so.

The county I live in (Rio Arriba County, NM) has the county seat in Tierra Amarilla. Back in 1915 this was 3 - 5 days one-way by wagon. Today it's almost 2 hrs by car from where I live in the county... about 90 miles.

Needless to say, for most dirt poor ranchers in the early part of the 1900's, the decision to cough up better than $600 plus travel for a week or more to perfect their mineral rights was a no-brainer. They didn't do it. This was well before the earliest large oil & gas discoveries in places like Oklahoma, Texas and so on. The result... in much of the West the mineral rights today lie with the Feds.

 

[txdon]

A mineral owner would say that they pay plenty of ad valorem tax once production begins.

In Texas also there is no tax until production begins! No expenses when there is no oil flowing. They probably sold the land for more than they paid for it, retained the mineral rights, pay no upkeep on the land, no land taxes, no risk, and no oil pump in their back yard. Could there be a better deal!!!

 

[two_bit_score]

In Texas also there is no tax until production begins! No expenses when there is no oil flowing. They probably sold the land for more than they paid for it, retained the mineral rights, pay no upkeep on the land, no land taxes, no risk, and no oil pump in their back yard. Could there be a better deal!!!

Hopefully the depletion deduction won't be completely eleminated either.

What you say is the reason everyone should really check out the mineral estate on the property they are considering.
When you have a small tract and wind up with a well location on it then throw in a pipeline easment you are pretty much shot.

But I do have to say all the new locations I've seen lately are not bad. What they will look like in 20 - 30 years is the question.

There are plenty of horror stories about how O&G companies have mistreated the land they have been on in the past. And if the landowner doesn't have the resources to hold them accountable they have shown that they won't step up and take care of the problems they cause, in most cases.

 

[CubMon]

Speaking of oil, that would be that nasty old 'domestic' oil that is hard to sell at a fair price.... tainted by the gov.

Ok, too far off topic....sorry.