Own Minerals, but Selling the Surface? Things to Know

Do you own surface and minerals? Want to sell the surface, but keep the minerals? We outline below important things to know while working with your realtor and title company.

When you are selling real property the conveyance language you use is very important, especially in the scenario when you are selling the surface but want to keep or reserve the mineral interest. There are several types of deeds you can use to transfer real property from one person to another. For an overview of types of deeds in Oklahoma, you can read our post Types of Deeds.

We are going to focus on Warranty Deeds here. A Warranty Deed makes certain implied warranties that the real property is free from encumbrances, such as a mortgage, and that the person conveying the property will defend title against any claims.

If you use a realtor and title company to close on the sale of the property, they will almost always use a Warranty Deed. This is to reduce any risk to the person buying the property. Everyone wants to make sure that the person selling the property actually owns it and will fix any problems.

Most issues arise when it comes to the language used to reserve the mineral interest. There are a few ways you can reserve the minerals. We are going to include the most typical ways, but not the only ways to reserve the mineral interest. Most often the language reserving the mineral interest will be in the top paragraph as part of the conveyance language or along with the legal description using the following type of language:

• Less and except all oil, gas and other minerals

• Surface only

• Limited to the surface

Here is an example:

There is also language that can be misinterpreted as a reservation, but is really a limitation on the warranty. Remember the implied warranties discussed above in the Warranty Deed? Those warranties. When you see language, typically towards the bottom of the Warranty Deed after the legal description, that contains the following type of language, it is not a reservation of mineral interest.

Again, this is not a reservation of mineral interest. This is telling the person buying the property that I’m giving you everything I have less what I have already reserved or conveyed of record. You may be asking, why does this language exist?

Let’s look at an example. Ann owns all of the surface and minerals. Ann conveys 1/2 of the mineral interest to Bob. Then Ann conveys all of her interest less and except all oil, gas, and other minerals previously reserved or conveyed of record to Cathy. Ann is letting Cathy know that I’m conveying everything except what I may have already conveyed previous to this Deed, meaning the 1/2 mineral interest to Bob. In this example, Ann did not reserve any mineral interest and Cathy now owns all of the surface and 1/2 of the mineral interest (the other 1/2 mineral interest being owned by Bob).

Example 2: Doug owns all of the surface and minerals. Doug conveys all of his interest less and except all oil, gas and other minerals to Earl. Doug owns the mineral interest and Earl owns the surface.

We know the language above is nuanced, but that is why it is very important to review all of the documents prior to signing and ensure the Warranty Deed reflects your intent.