How to reference mineral and royalty interests in TREC forms

How are mineral and royalty interests addressed in the TREC contract forms and the TAR commercial contract forms?

The TREC residential forms and the TAR forms are silent as to the reservation or exception of any mineral interests or royalty interests. Under those forms, the seller has, therefore, agreed to convey all interests in the property, including the mineral interests. If a seller wishes to retain any mineral interests at closing, the Addendum for Reservation of Oil, Gas, and Other Minerals (TREC 44-2) may be used to accomplish this. If a third party owns mineral interests, and the parties are using the TREC Farm and Ranch Contract, a seller may want to include that information in Paragraph 6E, Exception Documents. That way, those third-party interests may not form a basis for objection to title. Exceptions should be referenced by the specific recording data.

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8 Responses to How to reference mineral and royalty interests in TREC forms

  1. Gregory Lee Lacy says:

    That is interesting and helpful. Thanks.

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  2. glenn day says:

    On larger tract, say 10 acres or more, make a decision on water rights.

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    • Forrest Lunsford says:

      Property would be hard to sell if seller reserves water rights. Buyer would be crazy to buy property where water rights were reserved.

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  3. Jim duncan says:

    I think you all know how I feel about the LACK of advising buyer and sellers of the silent treatment of minerals by TREC and TAR who should put the public’s interest first.
    I hope that the current board and commission will correct this.
    I believe there is a mention of minerals in other contract forms.

    Surely the Residential Realtors should have equality.

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    • E. DuJardin says:

      I’m a farm and ranch Realtor, so minerals and mineral rights and reservations are forefront in our day to day business. I can’t remember the last time I wrote a “Residential” contract, but I do recall a title company once explaining that minerals aren’t an issue for a residential buyer because likely the mineral rights were reserved by the builder / developer, etc. I’m not saying this is true, just thought it was curious.

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  4. Cassandra Pearce says:

    I sell Land and Residential… With my Land Sales Large or small I always write in when possible for my buyers to get Water rights.
    With My Seller’s -Water rights are withheld- very often as Ranchers retain their water rights a lot in West TX. ( Sometimes it is only for a limited time like 8-10 years and sometimes retained period.) The Mineral rights – we are not attorneys who can do the entire search for a client and we should recommend our buyer or our sellers to seek a Mineral specializing attorney in my opinion if looking for the chain of Mineral rights. I was working with a buyer and seller’s did not retain mineral rights on the Form we have to retain and so a day after closing in the city on an acre my buyer received a knock on the door they wanted to know who owned Mineral rights- Turned out years and years earlier only 40% were ever owned and my Buyer received Minerals pay for the 60% as it automatically passed to Buyer as was not retained by Seller or seller’s along the years…
    If I represent a Seller in TX it is in my opinion … my Clients best interest to retain Mineral rights. (Different if I represent Buyer.)
    Hope this sheds some light….Attorneys know best on Minerals and Water rights…. Almost all my land sales have the buyer’s or sellers having also retained attorneys as a side note..strongly recommend when selling Land to Big Commercial companies or with big commercial companies..

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  5. Delecia Fuller says:

    To my shock – in a residential subdivision in a city limits – a residential home did have ownership to mineral rights that we found after the title commitment was complete. There was an existing lease. The were slant drilling to the Gulf of Mexico.

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  6. John McKenty says:

    I am a realtor as well as a Certified Professional Landman. I have represented buyers and sellers of both rural lands and subdivision lots when buying or selling both surface and/or minerals. The conveyance of minerals is issue that needs to be addressed by TREC in the Farm & Ranch Contract at a minimum. Minerals and water rights both can have significant value and to be silent on the issues, or rely on the agent to address them in the contract, is not in the best interest of the seller.

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