Beware of the “catch-all” language when selling mineral rights

They used to say on He-Haw – “I’m not one to go around spreading rumors, so you better be sure and listen close the first time.”

That seems to frame today’s conversation well.  As one who would never talk specifics about others in the business, I do believe as a consultant it is our responsibility to make mineral owners aware of “questionable” practices we’ve come across during our years in this business.

The most recent example of egregious behavior came across our desks two weeks ago.  A young lady contacted us to sell some of her mineral rights.  She had sold other mineral rights to another firm last year, and wanted to sell the remainder of her rights to us.

While performing our due diligence process, we reviewed the mineral deed she signed last year.  In this conveyance document, filled with more legalize than cocktail hour at a lawyers convention, we noticed wording the stated she had sold all of her mineral rights to the other firm, not just those described in the legal description of the deed.  Imagine her surprise and disappointment when we had to tell her we couldn’t buy her mineral rights because they were sold along with the others a year ago.

Shocked, she insisted that was not the case.  That was not her intention and she had the email documentation to prove it.

Regardless, it didn’t change the fact that the mineral deed she signed included “catch-all” language that altered her intent.

So what does this “catch-all” language say exactly?

Like every mineral deed I’ve ever reviewed, this deed started with outlining the grantor and grantee in this conveyance, and then immediately went into describing the minerals being conveyed.  Legal description with township and range, sections and sub-sections all outlined and defined.  But then the next paragraph is something I haven’t seen before.

And I quote: “Not withstanding anything herein to the contrary, the lands individually described above are set out for the convenience of the parties and that this deed cover all oil, gas, and other mineral interests of every kind and description owned or claimed by, or standing of record in the name of the grantor in, on or under the lands above located in the county of xxxxx, state of xxxxx, whether or not particularly described above.”  Emphasis added by me.

So you can see, the deed signed not only conveyed the described minerals but any and all mineral rights owned by the grantor in the same county and state.

The deed continued with wording granting power of attorney to the grantee giving them – they buyer – “the authority to correct the description of the property being conveyed, if necessary, to show the actual description of all properties owned by Grantor as reflected by the County Records in which said properties are located.”

First it says the description is there simply for the convenience of the parties, but then power of attorney provision enables the grantee to correct the deed for recording by adding any and all additional mineral rights owned by the grantor within the county.

That my friends is what we would refer to as “catch-all” wording.

The young lady was very upset as you can imagine.  She had emails clearly stating what she intended to sell and believed the offer she accepted was to sell only those mineral rights described to the buyer in the email.  She contacted the buyer registering her complaint and received a response from their attorney.  In summary the response stated “You willingly and freely signed the option agreement and deeds without registering any objection to the catch-all language.  Xxxxxxx is not willing to relinquish any interest so lawfully obtained.”

Don’t let this happen to you.  If you are looking to sell your mineral rights, make sure to talk with the buyers.  Get a feel for their character.  Talk to references.  Remember not all that is legal is moral.

While we too buy mineral rights here at Western Mineral Consultants, we also serve as a skilled reference for mineral owners.  If you have questions about a deal with another, give us a call.  We are happy to help, whether you sell to us or another.

Together we can ensure that this grab doesn’t happen to others.

 

  1. Merle Meszaros Reply

    Todd, as a person that wrote and reviewed specifications and contracts for 14 years, I can appreciate what you found in that contract and feel sorry for the young lady. Since I know you personally, I can only say that you are one of the most honest people I have met in many years!

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