Are you a Texas veteran considering the purchase of land in Texas? Whether you plan to build a house on your land or use it for recreational purposes, pay special attention to the mineral rights and whether or not they are included with the sale of the land.
The Railroad Commission of Texas (RRC) states that “land ownership, under Texas law, includes two distinct sets of rights, or “estates,” — the surface estate and the mineral estate.”
The surface estate consists of everything on the surface and above the land. The mineral estate includes the minerals below the surface of the land. According to the RRC, “these two estates were initially owned by the same person and they may continue to be owned together by one person. However, in many areas of Texas, especially those where there has been extensive historical oil and gas development, it is common for the mineral estate and surface estate to be owned by different people. The division, or “severance,” of the mineral estate and surface estate occurs when an owner sells the surface and retains all or part of the minerals (or, less commonly, an owner sells the minerals and retains the surface). If an owner does not expressly retain the minerals when selling the surface, the mineral estate he owns automatically is included in the sale.”
If you buy land that does not include the mineral rights, it is important to know that Texas law states that the mineral lessees (oil and gas companies) have the right to manipulate the surface of your land, as much as “reasonably necessary”, for mineral exploration or production. For example, lessees can drill wells at any location, conduct seismic tests, or use surface and subsurface water for drilling and production operations. The surface estate owner cannot refuse these rights and there is often no obligation on the part of the lessee to restore the surface land to its original condition.
If you would like to learn more about mineral rights, Mr. Judon Fambrough, a real estate attorney and senior lecturer with the Real Estate Center at Texas A&M University, has written a very informative paper on this subject.
Buying land that includes the mineral rights is the best choice when possible. Should you purchase a tract of land using the VLB Land Loan program you can lease the mineral rights, however, certain conditions must be met.
There are many variables to examine when purchasing land in Texas and it’s important to do your homework before making a final decision. Consider how you would like to use your land and what things are most important to you. We will continue this blog series with more subjects including tax exemptions, deed restrictions, easements, utilities and more, so stay tuned.