Mineral Rights on a Installment Contract

Status
Not open for further replies.

mksanders

New Member
We purchased our land from an individual and signed an installment loan for which we are making monthly payments. Recently natural gas and oil has been found in our area and the gas companies have gotten all the land owners whose land joins our property to sign contracts for leasing and royalties. The individual that we have our loan is in the process of signing with the gas company and our land will be included. We had talked about trying to get another loan to pay our loan off (our interest rate is really high) and take advantage of the profit to be made when they start drilling in one month. However, when I checked our loan agreement it reads:

Upon payment of the entire debt with interest when due, together with all taxes, assessments and insurance premiums due hereafter, SELLER will convey to BUYER the above described property by WARRANTY DEED. Seller hereby reserves royalties, mineral rights, oil and gas rights.

To me this means that the individual we are buying the land from is the only one that will forever be entitled to any profit made from the drilling, even after we pay our land off. Is this true?
 
I'm not a lawyer but I do know if the mineral rights were not included in the sale contract,they aren't and likely will never be yours!

"Seller hereby reserves royalties, mineral rights, oil and gas rights."
That means exactly what it says,the seller retains the minerals,and royalties from those minerals,forever! I can't believe the seller did not make that clear to you when you purchased the property.Most people who sell property on which they own mineral rights,don't sell the rights along with it.That also means they can drill a well in your back yard or dig up your garden if they so desire and you will have no say in it! You might be entitled to some reimbursement for damages on the property from the set up of the well site if drilling is actually done,but I'm not positive about that.You might want to check that out.
As I said,I am not a lawyer but I'm pretty sure I am right about this.
 
Status
Not open for further replies.

Ask a Question

Back
Top