A warranty deed guarantees clear title to a piece of real estate. Mineral rights add complexity to a warranty deed because mineral rights can be, and often are, separated from surface real estate. Mineral rights grant the holder the right to develop mineral resources, oil and gas, often at a profit. As such, mineral rights are valuable real property. A title deed is used to transfer mineral rights; the warranty guarantees that the person transferring the rights, the grantor, has clear title.
In Texas, as in most Western states, mineral rights were severed from surface rights, beginning in the late 1800s. Sometimes, the government retained mineral rights while selling surface real estate. Other times, private parties severed rights granting another entity the right to develop the mineral resource. All mineral right transactions rely on a deed. Several transfers of mineral rights, often in rural areas, may have occurred over time confusing title to the property.
A mineral rights deed specifies the land area over which the mineral rights lie and the share of resources owned, but most importantly the deed shows who the prior owner was. Mineral right transactions are part of the public record, similar to the sale of a house. A deed is filed at the county government office. Historically, county clerks may have recorded mineral rights in a different record book than the deed book for surface property; probably because the mineral rights are separate from the surface estate.
The warranty deed specifies that the grantor of mineral rights has clear title, demonstrating that there are no liens, or covenants on the rights. When the deed title is transferred the warranty ensures the grantee clear rights to develop and produce the mineral resource. In Texas, as in most Western states, it is sometime difficult to trace mineral rights ownership through historical records. For example, deceased persons may have sold mineral rights unbeknownst to heirs who assume the underground resource is still part of the estate; these heirs will try to sell the estate to a new buyer. The transaction will be recorded with a deed but later the mineral rights holder can show up intending to extract oil. The new buyer will not have recourse unless a warranty deed for mineral rights showing clear title and transfer along with the surface property had been recorded.
Attorney's Title Opinion
In Texas, a warranty deed for mineral rights can be replaced by an attorney's title of opinion to provide clarity for property transactions. An attorney's title of opinion is written by an attorney, who after searching historical county records and other sources of information, wills, public land transactions, etc., determines the correct owner to the mineral rights, which suffices as the warranty deed to provide legal assurance of clear title.
Any property transaction in a mineral-rich locale should have detailed descriptions of the property being transferred in the deed. Do not assume that mineral rights are being conveyed along with surface real estate.
Diane Bacher is a certified business energy professional with more than 16 years of experience in the environmental and energy sector. She has written numerous data and regulatory compliance reports for industrial, financial, educational and information-technology clients. Bacher's publications include the New Jersey Technology Council's "Tech News."