Presented by Duncan Strickland. Giustina Persich

Transcription

1 Curing Title Defects Presented by Duncan Strickland And Giustina Persich

2 Inexperienced

3 Pompous

4 Lawyer Cares About Client

5 Two Faced

6 The Oil and Gas Lease is signed by only one spouse and the record indicates the covered property is the community property of both spouses TheTitle Title Attorney wants: a) A Ratification Agreement executed by the non signing spouse which ratifies, adopts and confirms the oil and gas lease signed by the other spouse. Concern: Unleased interest. Waive?

7 One or More of the Property Owners Are Married The Oil and Gas Lease is signed by only one spouse and there is no indication of whether hth the property is community or separate The Title Attorney wants: a) An investigation to determine whether or not any portion of the Subject Property is the Homestead of the spouses and/or, b) An Affidavit from a disinterested person stating whether either spouse used or occupied the Subject Property as homestead c) If the answer to either a) or b) is yes: A Ratification Agreement executed by the non signing spouse which ratifies, adopts and confirms the lease. Concerns: Unleased Interest Waive?

8 One or More of the Property Owners Are Married TheOilandGasLeaseissignedbybothspouses,butthe property appears to be the separate property of only one spouse. Title Attorney wants: a) An investigation to determine whether or not any portion of the of the Subject Property is the Homestead of the spouses; b)if the answer to a) is no: An Affidavit executed by the non owner spouse which disclaims any Homestead rights inandtothesubject Property. Concerns: Lease into a Stranger in Title Waive?

9 Co Tenancy Husband and Wife buy a piece of property along with a third party. The Grantees do not specify their ownership interest t in the Deed. All three parties sign the same oil and gas lease. Do all parties own a 1/3 interest each in the property? Or do the husband and wife own a ½ interest together as community property p and the other party owning the remaining ½ interest in the property? Title Attorney wants a) A Stipulation of Interest Agreement executed by all three parties, which stipulates to their individual ownership interest in the property Concerns: Incorrect payment of royalties li Waive?

10 Prior Oil and Gas Leases There are numerous oil and gas leases covering the Subject Property whose primary terms have expired due to time. There are no releases of these leases in the abstract. Title Attorney wants: a) An Affidavit of Non Production from two or more disinterested and credible witnesses having personal knowledge of the history of production of oil, gas and other hydrocarbons from the Subject Property; b) Obtain information from the Railroad Commission of Texas regarding wells located on Subject Property and lands pooled therewith (if the lease(s) provided for pooling), including the production history of such wells,includingwhetherornotthesewellsareplugged,orareactively producing. Concerns: Leasing the correct parties Waive?

11 Life Estates / Open Mine Doctrine Surviving spouse owns a life estate in the Subject Property. Her son owns a remainder interest t in the sameproperty, Surviving i spouse executes an oil and gas lease covering the land, but the son does not execute the lease nor any other lease covering the land. Title Attorney wants: a) A Ratification Agreement executed by the son which ratifies, adopts and confirms the oil and gas lease signed by his mother; b) A Stipulation of Interest between the two parties outlining the manner in which the royalty payments should be disbursed. Concern: Unleased Interest Waive?

12 Tax Certificates There are no Tax Certificates in the abstract Title Attorney wants: a) Obtain from all taxing authorities in the County that cover the Subject Property, Tax Certificates which show the status of the payment of county, state, school and other pertinent ad valorem taxes assessed against Subject Property; for all years up to and including the end of the year in which the subject lease was filed of record b) Should any taxes remain unpaid, ensure these taxes are paid. Concerns: Subject Property being sold at tax sale. Taxes/liens being superior to leases Waive?

13 Title cannot be traced back to a date where ownership was granted by a sovereign Title Attorney wants: Affidavits of Use and Possession from two or more disinterested people (who would be available to be called as a witness) with personal knowledge of the use, possession, occupancy, and claims li of the land for the past twenty five years Mineral Classification Letter from the Texas GLO Concerns Adverse Possession (longest SOL is 25 years in Texas) Priorreservation reservation ofminerals Mineral classification of the land Waive?

14 Scenarios Affidavit Title can be traced back to 1920 and no earlier Title can be traced back to 1920 and no earlier conveyance of the Subject Land can be found.

15 Scenarios Affidavit Title can be traced back to 1920 and no earlier conveyance of the Subject Land can be found. Title can be traced back to 1920 and no earlier conveyance of the Subject Land can be found and the minerals were reserved in a conveyance dated Sept. 28, 1941.

16 Scenarios Affidavit Title can be traced back to 1920 and no earlier e conveyance of the Subject Land can be found. Title can be traced back to 1920 and no earlier conveyance of the Subject Land can be found and the minerals were reserved in a conveyance dated dsept. 28, Title can be traced back to 1920 and no earlier conveyance of the Subject Land can be found and the minerals were leased on Sept. 28, 1941, and a well was drilled shortly thereafter.

17 Scenarios Affidavit Title can be traced back to 1920 and no earlier conveyance of the Subject Land can be found. Title can be traced back to 1920 and no earlier conveyance of the Subject Land can be found and the minerals were reserved in a conveyance dated Sept. 28, Title can be traced back to 1920 and no earlier conveyance of the Subject Land can be found and the minerals were leased on Sept. 28, 1941, and a well was drilled shortly thereafter. Title can be traced back to 1900 and no earlier conveyance of the Subject Land can be found.

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19 Scenarios Affidavit Title can be traced back to 1920 and no earlier conveyance of the Subject tland can be found. Title can be traced back to 1920 and no earlier conveyance of the Subject Land can be found and the minerals were reserved in a conveyance dated Sept. 28, Title can be traced back to 1920 and no earlier conveyance of the Subject Land can be found and the minerals were leased on Sept. 28, 1941, and a well was drilled shortly thereafter that produced for 20 years before it was plugged. Title can be traced back to 1900 and no earlier conveyance of the Subject Land can be found. Title canbe traced back to 1859 and no earlier conveyance of the Subject Land can be found.

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21 Title cannot be traced back to a date where ownership was granted by a sovereign Title Attorney wants: Affidavits of Use and Possession from two or more disinterested people (who would be available to be called as a witness) with personal knowledge of the use, possession, occupancy, and claims li of the land for the past twenty five years Mineral Classification Letter from the Texas GLO Concerns Adverse Possession (longest SOL is 25 years in Texas) Priorreservation ofminerals Mineral classification of the land Waive?

22 Scenarios Mineral Classification Patent was issued prior to Mineral Release Act of 1895 Landwassoldpriorto but Patent pursuant to the sale was not issued until after Witherspoon v. Green, 274 S.W. 170 (Tex. Civ. App. 1925) Patent was issued between and Mining Act of 1895 all school, asylum, and public lands Relinquishment Act of 1919 public lands with a mineral classification Patent was issued after Sales Act of 1931 Wintermann v. McDonald, 129 Tex. 275, 102 S.W.2d 167, reh g denied, 129 Tex. 286, 104 S.W.2d 4 (1937)

23 Deeds of Trust, mortgage, mechanic s liens, and materialman s liens TitleAttorney wants: A release, or a subordination of the lien (subordinating its secured interest in the land to the lessee s interest in the lease) Concerns Foreclosure of the lien could interfere with the lease Waive?

24 Scenarios Mortgages Lease was executed Jan. 1, Lien was executed in 2000 and is a 30 year mortgage (last payment is due ) ).

25 Scenarios Mortgages Lease was executed Jan. 1, Lien was executed in 2000 and is a 30 year mortgage (last payment is due ) ). Lease was executed Jan. 1, Lien was executed in 1978 and is a 30 year mortgage (last payment is due ).

26 Texas Civil Practice and Remedies Code Section states that an action for foreclosure of a vendor s, mortgage, deedd of trust, or voluntary mechanic s and materialman s lien must be instituted, or a sale made under a power of sale in a mortgage or deed of trust, within four (4) years after the cause ofactionaccrues. Exceptions: Section provides for a suspension of the statute of limitations for 12 months after the death of either the debtor or the lender. Section provides that a properly executed and recorded extension of the real property lien will keep the lien in effect for four years after the extended maturity date of the debt

27 Scenarios Mortgages Lease was executed Jan. 1, Lien was executed in 2000 and is a 30 year mortgage (last payment is due ). Lease was executed Jan. 1, Lien was executed in 1978 and is a 30 year mortgage (last payment is due ). Lease was executed Jan. 1, Lien was executed in 1980 and is a 30 year mortgage (last payment is due ). However, a First Amended Deed of Trust was executed Jan. 15, 2013 that replaced the original lien of $5 million with one of $10 million and provided for payments for the next 30 years.

28 Scenarios Mortgages Lease was executed Jan. 1, Lien was executed in 2000 and is a 30 year mortgage (last payment is due ). 1 Lease was executed Jan. 1, Lien was executed in 1978 and is a30 year mortgage (last payment is due ). Lease was executed Jan. 1, Lien was executed in 1980 and is a30 year mortgage (last payment is due ). However, a First Amended Deed of Trust was executed Jan. 15, 2013 that replaced the original lien of $5 million with one of $10 million and provided for payments for the next 30 years. Lease was executed Jan. 1, Lien was executed in 1975 and is a30 year mortgage (last payment is due ) and there is no recorded extension of said lien and your company is not the lien holder.

29 Heirs of a decedent cannot be determined or found Title Attorney wants: te tto ey a ts: Certified copies of the proper probate or administration of the estate of decedent or Affidavit of Heirship and Stipulation of Interest Receivership Lease Concerns Not knowing who owns what Not having 100% of minerals under lease Waive?

30 Scenarios Missing Heirs Mr. Adams died in 2000, at the age of 59. No probate or administration of the estate of decedent can be found, but an instrument was found containing a recital that he had several adult children when he died. Also, two people executed separate leases with a 3 year primary term with another oil and gas companyin2008,buttheleaseshavesince expired.

31 Scenarios Missing Heirs Mr. Adams died in 2000, at the age of 59. No probate or administration of theestateof decedent can be found, but an instrument was found containing a recital that he had several adult children when he died. Also, two people executed separate leases with a 3 year primary term with another oil and gas company in 2008, but the leases have since expired. If additional research doesn t produce any results, then a receivership lease may be sought under Section of the Texas Civil Practice and Remedies Code and the bonus and royalty must be paid into the clerk of the court.

32 Scenarios Missing Heirs Mr. Adams died Jan. 1, 2000, at the age of 59. No probate or administration of the estate of decedent can be found, but an instrument contained a recital that he had several adult children when he died. Two people executed separate leases with a 3 year primary term with another oil and gas company in 2008, but the leases have since expired. Additional research determined that he had four adult children, in, total, when he died, including the two who previously signed leases.

33 Scenarios Missing Heirs Mr. Adams died Jan. 1, 2000, at the age of 59. No probate or administration of the estate of decedent can be found, but an instrument contained a recital that he had several adult children when he died. Two people executed separate leases with a 3 year primary term with another oil and gas company in 2008, but the leases have since expired. Additional research determined that he had four adult children, in total, when he died, including the two who previously signed leases. Two options: Still do a receivership lease and have the bonus and royalty paid into the clerk of the court. Sign the two children you know to leases and treat the rest as nonleasing co tenants?

34 Scenarios Missing Heirs Mr. Adams died Jan. 1, 2000, at the age of 59. No probate or administration of the estate of decedent can be found, but an instrument contained a recital that he had several adult children when he died. Two people executed separate leases with a 3 year primary term with another oil and gas company in 2008, but the leases have since expired. Additional research determined that he had four adult children, in total, when he died, including the two who previously signed leases. First, sign the two children you know to leases Second, get an Affidavit of Heirship from the two children you know and others who know them all (and lease the children you didn t know before you record it) Get a Stipulation of Interest signed by all heirs

35 Federal or State Estate Tax Return TitleAttorney wants: Copy of Federal or State Estate Tax Return with Subject Land listed in the inventory of the estate and confirmation of payment Concerns Having foreclosure of the land void the lease Waive?

36 Scenarios Estate Tax Return Mr. Adams died Jan. 1, 2000, at the age of 59. The records regarding the probate proceedings of his estate do not include a federal estate tax return.

37 Scenarios Estate Tax Return Mr. Adams died Jan. 1, 2000, at the age of 59. The records regarding the probate proceedings of his estate do not include a federal estate tax return. Doesn t need to be recorded to be a perfected lien Valid for 10 years

38 Scenarios Estate Tax Return Mr. Adams died Jan. 1, The records regarding the probate proceedings of his estate do not include a federal estate tax return. Doesn t need to be recorded to be a perfected lien Valid for 10 years from date of death Mr. Adams died Jan. 1, The records regarding the probate proceedings of his estate do not include a federal estate tax return.

39 Scenarios Estate Tax Return Mr. Adams died Jan. 1, The records regarding the probate proceedings of his estate do not include a federal estate tax return. Doesn t need to be recorded to be a perfected lien Valid for 10 years from date of death Mr. Adams died Jan. 1, The records regarding the probate proceedings of his estate do not include a federal estate tax return. Canbe extended by notification to the executor/administrator of the estate This would usually be found in the probate file

40 Scenarios Estate Tax Return Mr. Adams died Jan. 1, The records regarding the probate proceedings of his estate do not include a federal estate tax return. Doesn t need to be recorded to be a perfected lien Valid for 10 years from date of death Mr. Adams died Jan. 1, The records regarding the probate proceedings of his estate do not include a federal estate tax return. Canbe extended by notification to the executor/administrator of the estate This would usually be found in the probate file Mr. Adams died Jan. 1, The records regarding the probate proceedings of his estate do include a federal estate tax return but the Subject Property is not listed in the inventory.

41 Scenarios Estate Tax Return Mr. Adams died Jan. 1, The records regarding the probate proceedings of his estate do not include a federal estate tax return. Doesn t need to be recorded to be a perfected lien Valid for 10 years from date of death Mr. Adams died Jan. 1, The records regarding the probate proceedings of his estate do not include a federal estate tax return. Can be extended by notification to the executor/administrator of the estate This would usually be found in the probate file Mr. Adams died Jan. 1, The records regarding the probate proceedings of his estate do include a federal estate tax return but the Subject Property is not listed in the inventory. U.S. could still go after the Subject Property because estate taxes were not paid on it, but will they????

42 Duncan H. Strickland (281) johnson.com Giustina L. Persich (281) johnson.com