Mineral Rights Disputes in Texas

There was a time in North Texas when buying real estate was pretty much cut and dried and on the level. Ironically, it is what is happening below the surface that is giving headaches to all parties involved in a real estate transaction. This is mainly because of mineral rights disputes, which elevates a domestic issue (buying a home) to commercial litigation over who owns who.

To understand why commercial litigation comes into the picture, it is necessary to understand the impact of the natural gas found in Barnett Shale, both in economic and real estate law terms. It will also explain why homeowners are now practicing rigorous due diligence when tracing the ownership of property they are considering buying.

Barnett Shale is the site of what is considered the largest reservoir of onshore natural gas in the US and is located under Fort Worth, Texas. The location of Barnett Shale, which is in urban areas such as Dallas-Fort Worth Metroplex, has necessitated the negotiating of mineral rights with landowners. It is possible for drilling operations to be done with minimum damage to the surface area (although not always), and the landowners are paid for the lease of the land as well as royalty for whatever a particular well produces. Sounds simple enough, right? Well, not really.

Mineral rights are not necessarily tied in with surface land ownership. This means that it is entirely possible for a parcel of land to have two owners: the surface land owner and the mineral rights owner. Prior to Barnett Shale, very little notice was given to tracing the ownership of mineral rights, which were often severed from the surface land title and not included when the surface land changed ownership. This can lead to mineral rights disputes. For example, let us say a surface land owner agrees to rent out the mineral rights to a mining company, presuming ownership of the mineral rights. And then the actual owner of the mineral rights disputes the contract. This can lead to a pretty heated commercial litigation, especially if the area turns out to be lucrative.

This state of affairs is by no means limited to North Texas, Barnett Shale or natural gas. Many parts of Texas have yielded commercially-viable deposits of coal, oil and other fuel sources, and have become the focus of mineral rights disputes.

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