Surface Tenant's Consent for Subordination to An Oil, Gas, and Mineral Lease
Understanding this form
The Surface Tenant's Consent for Subordination to An Oil, Gas, and Mineral Lease is a legal document that allows a tenant to subordinate their rights from a surface lease to an oil, gas, and mineral lease. This form clarifies the relationship between the tenant and the operator (the owner of the lease), ensuring that the operator's rights take precedence over the tenant's rights under the existing lease. It is important for securing the operator's interests in the land while outlining potential compensations for any damages incurred during mining operations.
Main sections of this form
- Identification of the Tenant and Operator, including addresses.
- Details of the effective date and the recorded lease information.
- A description of the land covered by the oil and gas lease.
- Subordination clauses that clarify the tenantâs rights relinquishment.
- Provision for compensation for damages or losses to crops, livestock, or equipment.
- Signatures of both the Tenant and Operator to validate the agreement.
When this form is needed
This form should be used when a tenant has an existing surface lease and the operator wishes to obtain rights to drill or extract resources on that land. It is particularly useful when the operatorâs lease requires that the tenantâs rights be subjugated to ensure smooth operations. This form helps in formalizing the agreement between parties to avoid any disputes regarding land rights during extraction processes.
Who this form is for
- Surface tenants who currently hold a lease on the property where oil, gas, or mineral extraction is planned.
- Operators or owners of an oil, gas, or mineral lease looking to have their rights recognized over existing surface leases.
- Legal representatives of either party who require a clear, formal agreement regarding subordination.
How to complete this form
- Identify the parties involved by entering the names and addresses of the Tenant and Operator.
- Specify the effective date of the oil and gas lease and enter the relevant lease recording information.
- Detail the land description that is covered under the oil and gas lease.
- Review the subordination terms, ensuring you understand the implications for both parties.
- Obtain signatures from both the Tenant and Operator to validate the agreement.
Is notarization required?
This form needs to be notarized to ensure legal validity. US Legal Forms provides secure online notarization powered by Notarize, allowing you to complete the process through a verified video call, available anytime.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Common mistakes
- Failing to clearly describe the land covered by the lease, which can lead to disputes.
- Not properly identifying all parties involved, which may affect legal enforceability.
- Neglecting to review local laws that could impact the formâs validity.
- Omitting signatures, making the document unenforceable.
Why complete this form online
- Convenient access to legal documentation at any time, reducing the need for office visits.
- Editable templates allow for customization without requiring extensive legal knowledge.
- Reliable templates drafted by licensed attorneys, ensuring that you are using a legally sound document.
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FAQ
However, since mineral rights are a severed portion of the land rights themselves (they're separated from the land's "surface rights" and sold separately by deed, just like the land itself), they are usually considered real property.
A mineral lease is a contractual agreement between the owner of a mineral estate (known as the lessor), and another party such as an oil and gas company (the lessee). The lease gives an oil or gas company the right to explore for and develop the oil and gas deposits in the area described in the lease.
However, since mineral rights are a severed portion of the land rights themselves (they're separated from the land's "surface rights" and sold separately by deed, just like the land itself), they are usually considered real property.
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).
Mineral rights are often sold separately from the land they are on. You may have title to the mineral rights on a property you own, or a previous owner may have sold or leased them in which case, they may not be yours to sell. But there is no need to abandon the idea of monetizing your mineral reserves!
2 Furthermore, ownership of such oil and gas constitutes ownership of a real property interest, as it is well settled in every jurisdiction that oil and gas in place are minerals, and as such they are part of the realty.3 Once oil and gas is produced, its legal character changes from real property to personal
Call the county where the minerals are located and ask how to transfer mineral ownership after death. They will probably advise you to submit a copy of the death certificate, probate documents (if any), and a copy of the will (or affidavit of heirship if there is no will).
Surface rights mean that you own the top of the land. Essentially, you'll own the grass, trees and any structures that are part of the land itself. All of the rights to these essential parts of the land will be owned once the title of the land has been transferred to your name.
An owner can separate the mineral rights from his or her land by: Conveying (selling or otherwise transferring) the land but retaining the mineral rights. (This is accomplished by including a statement in the deed conveying the land that reserves all rights to the minerals to the seller.)
