Houston, TX asked in Energy, Oil and Gas, Land Use & Zoning and Real Estate Law for Texas

Q: Is it legal that a company sell land without telling the buyer that an existing oil and gas lease exist

2 Lawyer Answers
Anthony M. Avery
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Answered
  • Real Estate Law Lawyer
  • Knoxville, TN

A: Certainly... It happens all the time. The buyer needs to do a title search prior to signing the contract, and certainly prior to paying over the price. If it is a warranty deed, check to see if the lease is listed on the face of the deed as an encumbrance.

Aimee Hess
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Aimee Hess
Answered
  • Real Estate Law Lawyer
  • Streetman, TX
  • Licensed in Texas

A: The answer to this question is maybe. It depends on additional facts that are not included in the question. For example, did the purchase take place in a title company and did the title company provide a title commitment and title policy that listed the oil and gas lease in Schedule B? Did the contract and the deed provide that mineral rights were not included in the sale? Were there pump jacks, tanks or other equipment that would be evidence of the lease evident on the property? Does the oil and gas lease provide that there will be no surface use of the property? It's possible that not telling the buyer about the lease is deceptive, but it's going to depend on these and other additional facts.

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