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We Know Mineral Rights and Renewable Energy - Title Research in Texas

We Know Mineral Rights and Renewable Energy - Title Research in Texas

The topic of mineral rights in Texas is a complex subject with standards and regulations varying from county to county. Mineral rights do not always belong to the actual land property owners. That is very important information which is critical when a client is considering buying or selling a piece of property. Usually mineral rights refer to the deposits of minerals that are static under the ground such as coal, metal ores, stones, sands or salts. Then there are the fluid minerals such as oil and natural gas. Property owners that have mineral rights may sell, lease or donate the rights to individuals or companies. Any mineral interests can be owned by governments, property owners or corporations.  

Types of Mineral Properties

There are three types of mineral properties: unified estate, severed or split estate and fractional ownership. Unified estates are ones where the surface and mineral rights are not severed or split. The severed or split estate describes a circumstance when mineral and surface ownership are separated. Usually this occurs when the original owner of the mineral rights bequeaths the land to their descendants. In Texas, a large number of properties exist where corporations own the mineral rights under a family's land. In a split estate, the owner of the mineral rights has the right to develop those minerals, regardless of who owns the surface rights. Fractional ownership means two or more entities own the mineral rights, i.e., multiple children or grandchildren.  

Leasing the Mineral Rights

Sometimes the owner of mineral rights will lease the rights to a company for development. Leasing is a way for the property owner to obtain some revenue to offset costs of maintaining the property. In most cases there are term limits in lease agreements and specified circumstances when the minerals may be extracted. It is important to have the title search and research about the property before advising the client about a transaction.  

Know the History of the Property and Mineral Rights

A buyer or seller of property must consider the mineral rights before conducting the transaction. Comprehensive title searches provide current owner information as well as the history of the property ownership and the original land grants. Providing title abstracts of all discoveries obtained through a title research of a property is part of the solution you can offer clients. It is important to review the documents supporting all kinds of transactions and conditions of the property. These include monetary and tax liens, past due property tax information, or property owner association assessments, restrictions and easements. Items that will be important to your client as part of the title abstracts will include: original land information; lot and block diagrams; subdivision restrictions; history of the property; recorded deeds; recorded mortgages; legal actions/suits filed; and a plat map

Renewable Energy Sources

The focus on renewable energy is increasing. The well-known renewable energy sources in Texas include solar power and wind power. These sources are continually being replenished and emit little greenhouse gases or pollutants. There are other forms of renewable energy that are being harvested today. Organic sources such as wood, wood waste, municipal solid waste, landfill gas, biogas and biofuels are in abundant supply today and are often used to produce energy for communities and industries. In many areas of Texas, water or hydropower is utilized. Also, geothermal energy from the Earth's matter and radioactive decay provides a source of heat and electric power. Because these are continually created, harnessing the energy is important to the environment. And in some cases, it proves to be more efficient and less costly. Fossil fuels like coal, oil and gas are non-renewable and take hundreds of years to form. Biogas is produced from sources like livestock waste, landfills, wastewater sludge, food waste and other organic waste operations and can be utilized for multiple energy sources. Renewable energy sources that are part of the property's subsurface mineral rights are subject to scrutiny in title searches and abstracting.  

Solar Energy Surface Estate Rights

Texas has two types of property rights defining land areas: the mineral estate and the surface estate. When clients are considering purchasing or leasing land for a solar farm, it is important to explore the regulations in each of the Texas counties. Solar facilities are considered to be a surface estate, or above ground. The owners of the mineral rights below ground may want to explore the potential for drilling or extracting the minerals found there. That could cause issues with the solar farm's operation. It is best for solar project developments to access the mineral estate rights through agreements to avoid conflicts with mineral rights owners. Creating a surface rights waiver that has a clause waiving all rights to use the surface for exploration, testing, general access and production is extremely important. When researching the title of the property, a client that is interested in a piece of property needs to have an expert determine who owns the mineral estate, the risks involved and solutions to reducing the risks. There are numerous entities within the mineral estate: the owner, the lessee, the executive tenant and the royalty owner. It is imperative that all documents and agreements must be signed by every owner and lessee.  

Are There Wind Energy Rights?

Because of a lack of laws regarding wind rights, it is best to use mineral rights inspections as a starting point. With comprehensive title searches of the property along with the history, solutions can be created to assist the client building wind farm developments and the property owners so that all are satisfied with the arrangements. Leasing land for development is most likely beneficial to both the owner and lessee. Like with other types of surface estates, the wind estate can be split into multiple owners. Currently Texas laws side with the subsurface mineral rights owners in any form of disputes rather than the surface land owner. Because of this situation and the lack of laws governing wind rights, many sellers withhold the wind rights on land sales. By adding clauses in the sales contract, sometimes the wind rights will not be conveyed with the property. If another entity owns the mineral rights underground there could be additional disputes.  

Know Your Rights

In conclusion, renewable energy sources such as wind and solar must be researched and reported in the same way other mineral rights are examined. And you can find that information with accurate and comprehensive title searches and abstracting reports. Since the rule of capture may vary, it is best to consult experts that have the knowledge and experience to provide the information needed in any industry or with the development of renewable energy sources.  

Hollerbach & Associates – We Know Texas Better

Hollerbach & Associates provides the most accurate and in-depth title research and abstracting solution. Our experts in the area of land title services can assist with every possible industry factor in land transactions. From alternative energy and oil and gas to mortgage and real estate to transportation, let our associates assist with your land title needs and project goals.

Hollerbach & Associates has served Texas property owners since 1985. Our associates are experts in title research of all 254 Texas counties. We are not only multi-generational Texas residents, our professional and skilled staff have spent more than 30 years mastering Texas land and title research – a unique and constantly changing landscape. We are the trusted source for our clients who are involved in real property transactions – whether that involves traditional buying, selling and developing or venturing into newer areas like renewable energy. 

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