The Importance of Title Research with Renewable Energy
What is Title Research?
Property title searches are typically conducted when real estate is being purchased, sold or leased. It is crucial to understand the chain of ownership on property before any real estate transaction is made. Comprehensive research will uncover information about current and previous owners and if the property can legally be sold or leased. Discovery of any liens, pending lawsuits, unpaid taxes, leases, easements, mortgages or other outstanding issues or restrictions could impact the transfer of ownership. This includes reviewing deeds, divorce cases, county land records, bankruptcy records, probate records and other financial judgments potentially attached to the property. A clear property title search confirms there are no outstanding issues that could crop up after ownership has been transferred.
Renewable Energy Sources
The most commonly known renewable energy sources are solar power and wind power. Other lesser known forms of renewable energy are being harvested as well. Organic sources such as wood, wood waste, municipal solid waste, landfill gas, biogas and biofuels are used to produce energy. Water or hydropower is being utilized today as well as geothermal energy derived from the Earth's core. Variable renewable energy sources are those that have a fluctuating nature, such as wind and solar. Controllable renewable energy sources include dammed hydroelectricity, bioenergy or geothermal power. Renewable energy sources that are part of a property's underground mineral rights are subject to title searches.
Renewable Energy Considerations in Title Searches
Title research for land that is or could be used as a renewable energy source is an essential component of the process for purchasing or leasing plans. Just like with purchasing a home or real estate, this includes verifying land ownership, identifying encumbrances or restrictions, and ensuring compliance with Texas laws. It helps ensure legal clarity, financial security, and compliance, ultimately enabling smoother project execution and fostering confidence among investors, stakeholders, and communities. As renewable energy projects, such as solar, wind, and hydropower, often require significant land use, investment, and regulatory approval, proper title research helps identify potential legal issues. If the land is actively being utilized for farming or ranching, care must be taken on how allocation for solar or wind farms will affect the property owner's business concerns.
Solar Energy Facilities Are Considered Surface Estates
When prospecting the opportunities of purchasing or leasing land for a solar farm, the regulations of each Texas county must be examined. There are two types of property rights defining land areas: the mineral estate (below ground) and the surface estate (above ground). Solar facilities are considered to be part of the surface estate. If the owners of the mineral rights to a piece of property decide to drill and extract the substances found there, it can affect the solar farm's function. It would be prudent to purchase or lease the mineral estate rights at the time of implementing the solar farm operation. Another option would be to create a surface rights waiver limiting the rights to mineral drilling. Our expert title researcher will determine who owns the mineral estate and the surface estate and any risks associated with either. There could be numerous working partners to a mineral estate: the owner, the lessee, the executive tenant, and the royalty owner. Transactions should be legal and signed by whichever entity is involved.
Wind Energy Farms Are Considered Surface Estates
Unfortunately, there are limited regulations in Texas regarding wind energy. As with solar energy farms, it is best to conduct title searches for who owns the mineral rights. In Texas, the mineral estate is the dominant estate for any disputes between the surface and mineral owners. Any future subsurface plans to drill and possibly extract minerals from the property could be hindered by a large number of energy wind mills. Additionally, it is possible that property owners will reserve the wind rights when a property is sold or transferred. An expert researcher will be able to determine who owns the mineral rights and if surface estate wind rights are mentioned in the legal documents.
Importance of Title Research in Renewable Energy
When purchasing land or planning development areas for wind, solar or other renewable energy facilities, a comprehensive title search is an important first step before committing to a sale or development. Legal ownership of the property and mineral or surface rights can be determined which will avoid disputes over land rights. Any existing claims or legal issues associated with the property itself or mineral and surface rights will show up in a comprehensive title search. Analyzing the history and current aspects must be conducted to facilitate financing and investment. Knowledge of Texas laws will assist in complying with local regulations. Identifying environmentally sensitive areas or liabilities, such as contamination or protected wildlife habitats is a necessary component of a title search.
Contact Hollerbach & Associates for Comprehensive Title Searches
Hollerbach & Associates knows Texas better and has served Texas property owners since 1985. Our associates are experts in title research of all 254 Texas counties. Our professional and skilled abstractors have spent more than 30 years mastering Texas property and title research. This includes extensive research of all types of renewable energy and the associated complexities. Our property transaction services department can assist with obtaining title searches and provide important due diligence for your clients.