Buying land subject to Oil, gas and mineral rights reservation

It is not unusual to see mineral reservations in the chain of title to real properties in Florida. When the State of Florida first conveyed title to state owned lands, it was customary for the state to reserve an interest in all oil, gas and minerals on the property, including the right to drill, mine and excavate for them.

To resolve this, Florida adopted a statute identified in F.S. 270.11(3), stating that “The right of entry to any interest in phosphate, minerals, and metals or any interest in petroleum reserved in favor of the Board of Trustees of the Internal Improvement Trust Fund, the State Board of Education, a local government, a water management district, or other agency of the state is released for any parcel of property that is, or ever has been, a contiguous tract of less than 20 acres in the aggregate under the same ownership.”

Most buildable lots in Cape Coral, Fort Myers, Bonita Springs and Naples should qualify under this statute. In such case, Buyer of the property should request that the underwriter delete the exception and issue the clear title.

Additionally, Buyer should request the underwriter to look into MRTA Florida’s Marketable Record Title Act (MRTA) was enacted to alleviate real property owners from aging title defects by imposing a 30-year limitations period on certain title matters. MRTA has the potential to terminate a private right of entry for exploration, mining, and drilling, as outlined in F.S. 704.05, even if the mineral reservations themselves remain intact. It is advisable to request a title insurer to conduct the necessary analysis to ascertain if this applies, as it’s typically not undertaken unless specifically requested.

If the right of entry has indeed been terminated by either statute mentioned above, the title insurer should be able to explicitly state in a title insurance policy that there is no longer any right of entry, irrespective of the presence of mineral reservations. Consequently, the title would be considered marketable, except if the property is intended for mineral extraction. In such instances, even though the right of entry is no longer enforceable, any minerals extracted by the owner would still be owned by the party (if any) who held the mineral reservations.