Texas Subordination by Lessee of Right to Use All or Part of Surface Estate refers to a legal agreement wherein a lessee (tenant) consents to subordinate their right to use the surface estate (land) on a property to the rights of another party. This particular agreement is prevalent in the context of oil and gas leases in Texas. The purpose of subordination is to ensure that the rights of the surface owner are protected and preserved while allowing the lessee to access and develop subsurface materials. The concept of subordination by lessee of the right to use all or part of the surface estate recognizes that property ownership consists of both surface and subsurface rights. In Texas, where oil and gas extraction is a significant industry, this agreement becomes crucial. By entering into this agreement, the lessee acknowledges the importance of the surface owner's rights and agrees to adjust their rights accordingly. Various types of subordination by lessee of the right to use all or part of the surface estate can exist, depending on the specific circumstances and requirements of the parties involved. Some common types of subordination agreements include: 1. General Subordination Agreement: This type of agreement applies to the entire surface estate of the property, wherein the lessee agrees to subordinate their rights to the surface owner's rights comprehensively. This agreement is used when the lessee needs to conduct extensive operations over the land and wants to assure the surface owner that their concerns will be addressed. 2. Limited Subordination Agreement: In cases where only a portion of the surface estate is required for conducting operations, the lessee may opt for a limited subordination agreement. This agreement specifies the specific area of the surface estate that will be subject to subordination, allowing the surface owner to retain control over the remaining area. 3. Partial Release of Subordination: Sometimes, a lessee may execute a partial release of subordination, granting the surface owner some relief from the subordination agreement temporarily or permanently. This type of release can occur when the lessee completes their operations in a specific area or when certain conditions are met. When drafting a Texas Subordination by Lessee of Right to Use All or Part of Surface Estate agreement, it is crucial to include the following key elements: — Parties involved: Clearly identify and provide the contact details of both the surface owner and the lessee. — Property description: Accurately describe the property, including the legal description and any pertinent details about the surface estate. — Term and conditions: Specify the duration and terms of the subordination agreement, including any limitations, restrictions, or conditions for use of the surface estate. — Compensation: Outline any compensation or damages to be paid by the lessee to the surface owner, such as rental fees, surface damages, or restoration obligations. — Liabilities and indemnities: Address the responsibilities and liabilities of both parties and include indemnification clauses to protect against potential claims or damages. — Governing law: Specify that the subordination agreement will be governed by the laws of the State of Texas. It is advised to consult with legal professionals experienced in Texas property and oil and gas laws to ensure that the subordination agreement accurately reflects the intentions and protects the rights of all parties involved.
Texas Subordination by Lessee of Right to Use All or Part of Surface Estate
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The general rule of thumb for the value of mineral rights in Texas is 2x to 3x the lease bonus you received. For example, if you got $500/acre when you leased your property, you might expect to sell for somewhere between $1,000 to $1,500/acre if you were to sell mineral rights in Texas.
As a mineral rights value rule of thumb, the 3X cash flow method is often used. To calculate mineral rights value, multiply the 12-month trailing cash flow by 3. For a property with royalty rights, a 5X multiple provides a more accurate valuation (stout.com).
Not owning the mineral rights to a parcel of land doesn't mean your property is worthless. If someone else owns the mineral rights and they sell those rights to an individual or corporation, you can still make a profit as the surface rights owner. You have the rights of ingress and egress.
If you intend to conduct a mineral rights search in Texas, here are several approaches you could take into consideration: Get in touch with a Title Company. ... Hire a Landman. ... Contact the Texas Railroad Commission. ... Consult with an Expert. ... Go over Public Records. ... Examine the Property Deed. ... Check the County Clerk's Office.
?Surface rights? refers to the right to control the surface of the land. Existing structures are included under this umbrella. Typically, when property is purchased, the transaction includes the surface and mineral rights.
With its vast reserves of oil and gas, Texas has specific guidelines around inherited mineral rights. In Texas, if mineral rights aren't explicitly mentioned in a will, they typically pass along with the surface land unless there's a prior legal document that separates them.
The following are methods for establishing mineral rights ownership: Deed. A deed is used to transfer mineral rights ownership from one party to another. Lease. ... Severance. ... Adverse Possession. ... Surface Use Agreement. ... Royalties. ... Mineral Estate. ... Texas Railroad Commission.
The general rule of thumb for the value of mineral rights in Texas is 2x to 3x the lease bonus you received. For example, if you got $500/acre when you leased your property, you might expect to sell for somewhere between $1,000 to $1,500/acre if you were to sell mineral rights in Texas.
