What is a deed reservation?

Q: I’ve heard that not all properties come with mineral rights. How do I find out if there is a reservation in the deed? 

A: Even if the seller or real estate agent does not inform you that you are not getting clear title to the entire land, you will know the truth when you receive an abstract title or preliminary title report. Any profit given in the transaction before the sale to you will be recorded in the public records and will be uncovered by a title search. If it is not recorded and you do not know about it, then it will not be legally binding on you.

If you find evidence of a preexisting reservation start your research immediately at the county recorder’s office. Examine the original document to get information on encumbrance.

Types of Reservations:
 
Right of Entry – If someone has been granted the right to extract something from your land, the right of entry is implied unless otherwise stated. When a holder has a right of entry he or she can use the surface in any reasonable manner to perform drilling or extracting materials that are the subject of the profit.

Denying the right of entry is a much safer position as holders will have to obtain permission to enter your property for activities like drilling.

Right to Remove Crops- If land you’re looking at has crops on it you need to find out if the crops have already been sold. If so, this should be reflected with a drop in the selling price. Also, be sure to find out if there is a long term contract for crop-growing rights on the land.

Grazing Rights – If you don’t plan on running your own cattle, you might want to make sure no one else has the right to as well. Livestock can cause considerable damage to your land. If you see cattle when you look at the land make sure to ascertain if their place is permanent or temporary until sale.

Royalty Rights – The current owner may want to retain royalty from drilling or other profit initiatives on your property.

————————————————————————–
For more information on estimating your future taxes, pick up a copy of Finding & Buying Your Place in the Country by Les Scher at Amazon.com.

More Field Reports From The Land Report:

1. What are the Tax Rules on Easements?
   With the increase in sale of easements for wind power or for recreational use, it is important to examine some of the rules and history of cases involving easements. The...
2. Tax Rules on Easements
   With the increase in sale of easements for wind power or for recreational use, it is important to examine some of the rules and history of cases involving easements. Editors...
3. What you need to know about mineral rights
   Bitter disputes over valuable natural resources – such as those depicted in old Hollywood Westerns – are thought by many landowners to be an obsolete artifact of the past and...
4. Classroom: Water Rights in New Mexico
   With most areas of the West gaining popularity for natural beauty, recreation and open lands, it's important that those who wish to purchase land or homes understand an issue as...
5. Sold! Osborne Cattle Company in the Nebraska Sandhills
   Hall & Hall's Denver office just closed on Nebraska's Osborne Cattle Company. Located outside of Paxton in Keith and Lincoln Counties, the 20,452± deeded acres feature 2½ miles of North...