Mineral Rights and Surface Rights in Oklahoma — Do What Your Client Wants
If you have been following my blogs, you know I am passionate about my clients getting the mineral rights — putting the chocolate cake back under the icing.
I showed property this week in Osage County, Rogers County, Tulsa County, Okmulgee County, Okfuskee County, and Pittsburg County to two different sets of clients.
In every case the realtors said the minerals did not come with the property, that the sellers were only selling the surface rights.
However, when meeting and speaking with the sellers directly, in half the cases the sellers owned the minerals and were willing to convey the minerals with the property. These sellers had minerals that werenot in production. When they sell with the “old” Oklahoma contracts used by GTAR, these sellers will be conveying the entire bundle of rights — whether or not the realtors know what that bundle of rights contains or not. The attorneys will be probably be using a General Warranty Deed conveying the entire chocolate cake in fee simple or even if unbeknownst to them there is a piece or two already eaten out of the cake or not, they are planning to sell 100% of what they have, thereby conveying the property through a General Warranty Deed.
However, one seller this week refused to sell the minerals because the gas under his land was being produced and he wanted his descendants to get the little royalty checks in the future. His land had been unitized already. That particular property was out in the country near McAlester where a lot of gas has been being produced in the last few years. My buyers were comfortable with not getting the minerals because they loved the house and the land. They did not seem to really understand that just because the property is already being produced doesn’t mean the D6 dozers and drilling rigs won’t come onto the property in the future. If they had bought that place they would only have been purchasing the icing on the cake because the seller wanted to sever the mineral estate from the surface estate, making the minerals personal property.
We couldn’t get the deal together anyway, and so the minerals ended up being a moot point. In the offer I put: “Seller shall retain 100% of the minerals under this property.” To me that language using the “old” Oklahoma contract still being used by GTAR would allow the buyers to acquire the entire bundle of rights without the minerals, while still retaining air and water rights and any other rights that go along with the surface.
There is no way I will use a “Surface Only” contract. Thankfully, the Greater Tulsa Association of Realtors (GTAR) has not approved the use of the new Oklahoma contracts.
Nevertheless, if I have a Single-Party Broker’s agreement, I am legally bound to obey my clients and do what they want, even if I think it is not in their best interest. You bet in such a case that I will be documenting that I inform them of the negative consequences of not getting the mineral rights.