Foreclosure in 90011>Question Details

bandlprogrou…, Other/Just Looking in San Antonio, TX

Mineral Rights vs Banks

Asked by bandlprogroup23, San Antonio, TX Wed Jun 12, 2013

If Bank of America is selling a home in California and during the closing you notice someone owns the Mineral Rights in Iowa. My question is will the buyer be able to get a clear title or can Bank of America foreclosure on the home because of default, but someone owns the Mineral Rights to the property? Or is this a legal action that can be done with the Mineral Rights owner vs Bank of America? Can the owner file a Preservation of Interest against the property or will they try to file a UCC 1 etc

Help the community by answering this question:

Answers

11
As a former title co employee, I can add this to the subject of mineral rights and foreclosures. It was common for the foreclosing bank to provide title to the new buyer of the foreclosed property. These titles DID NOT CONVEY mineral rights. Whether the bank was retaining the minerals, or simply did not want to get involved in that aspect of the property rights I do not know. In Texas, mineral rights can be a valuable asset to a homeowner, so buyers of foreclosure property should definitely inquire about the conveyance of mineral rights, I would think,
1 vote Thank Flag Link Thu Jun 13, 2013
I can understand your concern.
One thing that you failed to contribute;
Is this house in a RURAL area, or is it in the middle of a RESIDENTIAL neighborhood?
Could it be that the mineral rights were sold when it was the middle of "nowhere", and someone thought it might be worth something, and now it might be worth $1?
1 vote Thank Flag Link Wed Jun 12, 2013
On the title there are covenants that run with the land. Depending on how the mineral rights were conveyed, they may run with the land or they may only stay with the current owner...

Is complex question and the devil is in the details... i.e. depends on the document that conveyed the rights and for how long... the foreclosure may extinguish some title rights, but not all of them.

If there is confusion on the rights and of course value attached to it, then you may file a suit in court to "quiet title" this means making sense of it and the court ruling on who has what rights.

Best of luck!

ron@select-realestate.com
1 vote Thank Flag Link Wed Jun 12, 2013
Interesting points, so what will the owner of the Mineral Rights file or do to protect their interest of the Property/ Mineral Rights or what can he or she file to do so. This home is located in California in San Bernardino County in the city of Yucca Valley, CA. near Palm Springs.
0 votes Thank Flag Link Mon Jun 17, 2013
If you have already done a Title Search, as it appears, then the Title Company can also get you the underlying documents. They may shed more light on the issue. Typically, mineral rights run with the land and do not get "released" in a foreclosure sale.
0 votes Thank Flag Link Wed Jun 12, 2013
Your title company should be your source of answers about this issue. They do have attorneys to help you out answering your legal questions.

Good luck,

http://douglasperez.pw
0 votes Thank Flag Link Wed Jun 12, 2013
Great answer Ron. Appreiciate the info. I actually remember studying this when going for my brokers license. But that's been a few years now and like you say the devil is in the details.
0 votes Thank Flag Link Wed Jun 12, 2013
While I agree with others who suggest that this is a legal matter I would still like to be kept in the loop on this subject. So please stay in touch.
0 votes Thank Flag Link Wed Jun 12, 2013
I agree you should contact an attorney, but in general the mineral rights are preserved regardless of the sale. The mineral rights act as an easement so the person in Iowa will still have those mineral rights.
0 votes Thank Flag Link Wed Jun 12, 2013
You would be better served by contacting an attorney with better line of sight to the details. Real estate agents would not be able to answer your question, especially without knowing the specifics.
0 votes Thank Flag Link Wed Jun 12, 2013
Wow! I've got to keep my eyes on this one.
0 votes Thank Flag Link Wed Jun 12, 2013
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer