Conveyance of Mineral Rights in Louisiana Purchase Agreements

Question:

 I represent the sellers in a transaction and they want to reserve the mineral rights.  Do I put a “0” or a “100” in the blank for mineral rights?

Answer/Recommendation:

Since we live in an oil-rich geographic location, mineral rights can be a very litigious area.  So, its important that the real estate agent explain to his or her client how to properly reserve or convey mineral rights.

The answer to the above question depends on which Contract the agent is using.  Is the agent using the “Louisiana Residential Agreement to Buy or Sell” or the “Agreement to Purchase and Sell – Lots or Vacant Land”?

  1. Louisiana Residential Agreement to Buy or Sell

If the agent is using the standard Louisiana Residential Agreement to Buy or Sell promulgated by the Louisiana Real Estate Commission, then the language concerning mineral rights reads as follows at lines 31-32:

“______% mineral rights owned by SELLER are to be reserved by SELLER.”

The key word here is, “reserved.”  In this case, if your seller clients want to reserve mineral rights, you would put “100” in the blank (conversely, if your seller clients want to convey mineral rights, you would put “0”).

  1. Agreement to Purchase and Sell – Lots or Vacant Land

If you are using the standard “Agreement to Purchase and Sell – Lots or Vacant Land,” the language is quite different and reads as follows at line 86:

“Seller shall transfer to Buyer ___% of the mineral rights and/or royalty interest, if any, currently owned by seller.”

The key word here is “transfer.”  When using this form, if your seller clients want to reserve mineral rights, you would put “0” in the blank (conversely, if your seller clients want to convey mineral rights, you put “100”).

 

It is highly recommended that all agents carefully read the language concerning conveyance of mineral rights.

For any questions concerning this email, please contact me at rye@tutentitle.com.

H.L. “Rye” Tuten, III, is a Title Attorney/Real Estate Closing Attorney and Owner of Tuten Title & Escrow, LLC.  Formerly assigned by RICE Insurance to defend real estate agents throughout Acadiana, much of his more than nine years’ litigation experience is with real estate concerns.