Insights with Inked

Mineral Title Discrepancies: How to Protect Your Development Projects

For developers and land professionals, understanding mineral ownership is crucial to secure title policies for your projects. However, there’s a common challenge: In many instances, clients only consider a project’s surface ownership. Oftentimes, clients don’t consider a comprehensive mineral ownership report is needed to secure a title policy.

Title discrepancies are common. Failure to prepare for curative measures can be detrimental to the success of any project.

For example, imagine you are developing a large-scale renewable energy project. You discover discrepancies in mineral ownership, such as a fraudulent transfer or an estate that hasn’t been probated with heirs that need to be tracked down. Failure to address and resolve these issues can halt your project in its tracks.

With the proper expertise, curative measures can be taken to address your title defects. This is where Inked steps in. Our title professionals uncover and address these problems, providing the clarity needed to advance your project and help secure a policy with a certain endorsement.

In this article, you’ll learn about common title issues in project development, the impact of not addressing these issues appropriately, and how Inked resolves discrepancies to ensure a successful project.

Common Title Issues in Land Development Projects

Various title issues can complicate the early stages of development projects. These problems can lead to significant delays, legal disputes, and increased costs if not properly addressed. Although defects and curative measures come in all shapes and sizes, they generally fall under some of the below examples.

Legal Description Errors

Legal descriptions in deeds and other documents must accurately define the property boundaries. Errors can lead to disputes and confusion about property ownership.
How Inked handles it: We will make note of the legal description error found in the chain of title. If necessary, we can correct title by preparing correction or amendment documents and filing of record.

Survey or Boundary Line Discrepancies

Inaccurate or outdated surveys can cause boundary line discrepancies, leading to legal challenges and conflicts between neighboring property owners.
How Inked handles it: Our GIS department can help identify any errors or omissions in a survey or metes and bounds description. We will map out the parcel and compare it to the survey of record to help determine correct boundary lines and acreages. The discrepancies will be noted in our reports.

Over Conveyance Issues

Over Conveyance (sometimes referred to as a Duhig issue) occurs when more rights or interests in a property are transferred than the grantor actually possesses, resulting in title defects and potential litigation.
How Inked handles it: If we find an over-conveyance of minerals, we’ll note it in our reports. We’ll credit the minerals to the rightful owner and recommend that all parties sign a Cross Conveyance and Stipulation document. This document will clarify everyone’s intentions, interpret the deed, and outline the interests of the mineral owners involved.

Fraudulent Transfers

Fraudulent transfers, such as forged deeds or unauthorized conveyances, can severely impact the integrity of the title and require thorough investigation and resolution.
How Inked handles it: We thoroughly investigate the heirs of estates. If we identify heirs who have been illegally or unfairly excluded from a transfer of ownership, we will make note of the owner and their “apparent” interests on the report so that our client can properly lease or notify them.

Unprobated Estates

When a property owner dies without a will or without probating their estate, determining the rightful heirs and their interests in the property can be complex and time-consuming.
How Inked handles it: Minerals can be stranded in the estate of a deceased owner. We will thoroughly investigate the heirship of an owner, attempt to track down a Last Will & Testament, or make note of the state laws of intestacy in the report if no LW&T exists of record. We will show all possible heirs and their respective interests in the report. We also can prepare an Affidavit of Heirship to identify all the heirs and assist with a transfer of ownership.

Race-to-Record Issues

In jurisdictions with a race-to-record statute, the first party to record a deed or other document has priority. Delays in recording can result in disputes and competing claims.
How Inked handles it: We identify any competing deeds or leases and note them in our reports. We also reference the state’s recording laws to provide our clients with a clear understanding of the legal framework. This information helps clients understand the priority of claims and any potential risks.

Title Failure

Title failure occurs when the title does not pass to the intended owner due to defects, gaps, or unresolved issues in the chain of title.
How Inked handles it: If a client wants to buy or lease a specific interest, but we find out the current owner doesn’t actually own it, we call this a title failure. We will immediately inform the client of this issue and provide the correct ownership details.

Impact on Timeline

Resolving title discrepancies can be a lengthy process. Preparing and obtaining curative documents may take several weeks to several months. Tracking down heirs and negotiating resolutions with all parties involved is time-consuming and complex. For example, if a discrepancy is discovered in the legal description of a property, correcting this error may require a new survey, discussions with neighboring property owners, and possibly court action to resolve disputes.

Consider a scenario where an estate involved in the chain of title isn’t probated. There are many factors to consider, including tracking down potential heirs (which may involve extensive genealogical research), obtaining probates, and/or negotiating with multiple parties to sign an affidavit of heirship. These processes can significantly extend a project’s timeline, resulting in increased costs and missed deadlines.

Strategies Inked Uses to Resolve Title Discrepancies

At Inked, we dive into records to uncover and address underlying mineral title issues that clients may not be aware of. We start with the title commitment, using it as a preliminary tool to assess the complexity of the mineral title based on the number of reservations, grants, or oil & gas leases listed.

If a title discrepancy is resolved or falls outside the statute of limitations, it is noted for informational purposes in the report. However, if a discrepancy affects the mineral estate, specific actions are required to cure the defect:

  • Affidavit of Heirship: Affidavits may have to be drafted, executed, and recorded in the appropriate jurisdiction.
  • Cross Conveyance & Stipulation: This is typically common to resolve disputes between owners regarding their respective interests.
  • Amendment or Correction Document: These are used to clarify discrepancies in acreage or legal descriptions on a lease.

This is why having title insurance is crucial. It covers any damages or losses if a title issue arises, protecting your investment. The title company will provide the requirements needed to fix the issue, and Inked helps meet those requirements, ensuring peace of mind.

Why Inked is the Right Partner

Inked is equipped with tenured land professionals who have the expertise to progress your projects. Mineral issues can be complicated, and the last thing you want is for your project to be severely delayed or completely shut down due to title discrepancies. We understand how challenging these problems can be. At Inked, we have the expertise to handle them.

There is no one-size-fits-all approach to resolving title issues. Each situation is different, based on each project’s requirements, which can vary based on geography, jurisdiction, and other applicable variables. Inked brings the experience and knowledge to resolve title issues, which ultimately protects our clients from damage or loss. Working with a reputable and trusted title partner like Inked will significantly enhance efficiencies to ensure successful outcomes and meet deadlines.

Working with Inked means a trusted partnership with seasoned professionals who know how to do the job effectively and efficiently, with your best interest in mind. Our team protects you from potential risks and keeps your project on track.

If you need help with your project or have questions on how securing title policies may affect your project, please reach out to us. We would love to learn more about your projects and guide you down a successful path to completion.