At the outset: I understand and acknowledge that any advice I get here is not legal advice. I also understand and acknowledge that even if you are a lawyer, you are not my or my cousin's lawyer and are commenting only your opinion in this matter. Thank you!
Info: Cousin is in escrow for a new construction home on a 7000 sq.ft lot in Placer county (CA). When she requested the preliminary title report, she realized that the builder had already severed the mineral rights and conveyed these rights to it's own subsidiary. There is also additional interest held by / reserved by a private party from 71 years ago. The following are excerpts from the preliminary title report:
***EXCEPTING THEREFROM, an undivided 1/4 interest in and to all oils, mineral and other hydro-carbon substances lying in or under said land, as reserved by XYZ and ABC, husband and wife, in Grant Deed recorded on February 2, 1953, in Book XXX, Page XXX, Official Records; *
EXCEPTING THEREFROM, any and all (i) oil rights, (ii) mineral rights, (iii) natural gas rights, (iv) rights to all other hydrocarbons by whatsoever name known, (v) geothermal heat rights or geothermal substances that may be produced from the property described above, (vi) water rights and claims or rights to water and (vii) all products derived from any of the foregoing (collectively, “Subsurface Resources”), and the perpetual right to drill, mine, explore and operate for and produce, store and remove any of the Subsurface Resources on or from the property, including the right to whipstock or directionally drill and mine, from lands other than the property, wells, tunnels and shafts into, through or across the subsurface of the property, and to bottom such whipstocked or directionally drilled wells, tunnels and shafts within or beyond the exterior limits of the property, and to redrill, retunnel, equip, maintain, repair, deepen and operate any such wells or mines, but without the right to drill, mine, explore, operate, produce, store or remove any of the Subsurface Resources through or in the surface of the property or the upper five hundred (500) feet of the subsurface of the property, as granted to Blah, Inc., a Colorado corporation, in deed recorded in the Office of the County Recorder of Placer County;**
Rights incidental to the ownership for the use and development of the mineral rights reserved in Deed executed by XYZ and ABC recorded February 2, 1953, Book XXX Page YYY of Official Records.
Google found articles that basically say it would be nearly impossible to sell this property or refinance (especially with Fannie or VA loans) eventually but these are from over 10 years ago. What is troubling is the private party's supposed rights to all minerals found in or under the land.
1. Does this mean that if the heirs or whoever inherited these rights could just randomly waltz in and start digging up my cousin's yard or the builder's subsidiary could just set up an oil rig there?
2. Will she face any difficulty eventually selling or refinancing this home?
3. Do their reserved rights cause the possibility for them to interfere with her quiet enjoyment of the property, especially if the heirs of the couple or whoever owns the rights have rights to minerals found in (the surface) of the land?
4. Should she just pass up this house? It sits on expansive soil with ground water seepage noted at 9ft so she was already concerned.
TIA for your feedback. Much appreciated.
Info: Cousin is in escrow for a new construction home on a 7000 sq.ft lot in Placer county (CA). When she requested the preliminary title report, she realized that the builder had already severed the mineral rights and conveyed these rights to it's own subsidiary. There is also additional interest held by / reserved by a private party from 71 years ago. The following are excerpts from the preliminary title report:
***EXCEPTING THEREFROM, an undivided 1/4 interest in and to all oils, mineral and other hydro-carbon substances lying in or under said land, as reserved by XYZ and ABC, husband and wife, in Grant Deed recorded on February 2, 1953, in Book XXX, Page XXX, Official Records; *
EXCEPTING THEREFROM, any and all (i) oil rights, (ii) mineral rights, (iii) natural gas rights, (iv) rights to all other hydrocarbons by whatsoever name known, (v) geothermal heat rights or geothermal substances that may be produced from the property described above, (vi) water rights and claims or rights to water and (vii) all products derived from any of the foregoing (collectively, “Subsurface Resources”), and the perpetual right to drill, mine, explore and operate for and produce, store and remove any of the Subsurface Resources on or from the property, including the right to whipstock or directionally drill and mine, from lands other than the property, wells, tunnels and shafts into, through or across the subsurface of the property, and to bottom such whipstocked or directionally drilled wells, tunnels and shafts within or beyond the exterior limits of the property, and to redrill, retunnel, equip, maintain, repair, deepen and operate any such wells or mines, but without the right to drill, mine, explore, operate, produce, store or remove any of the Subsurface Resources through or in the surface of the property or the upper five hundred (500) feet of the subsurface of the property, as granted to Blah, Inc., a Colorado corporation, in deed recorded in the Office of the County Recorder of Placer County;**
Rights incidental to the ownership for the use and development of the mineral rights reserved in Deed executed by XYZ and ABC recorded February 2, 1953, Book XXX Page YYY of Official Records.
Google found articles that basically say it would be nearly impossible to sell this property or refinance (especially with Fannie or VA loans) eventually but these are from over 10 years ago. What is troubling is the private party's supposed rights to all minerals found in or under the land.
1. Does this mean that if the heirs or whoever inherited these rights could just randomly waltz in and start digging up my cousin's yard or the builder's subsidiary could just set up an oil rig there?
2. Will she face any difficulty eventually selling or refinancing this home?
3. Do their reserved rights cause the possibility for them to interfere with her quiet enjoyment of the property, especially if the heirs of the couple or whoever owns the rights have rights to minerals found in (the surface) of the land?
4. Should she just pass up this house? It sits on expansive soil with ground water seepage noted at 9ft so she was already concerned.
TIA for your feedback. Much appreciated.
Statistics: Posted by Zillions — Sun Aug 11, 2024 2:59 am — Replies 0 — Views 218