Disclaimer

Insufficient Legal Description

As part of contracting for a parcel of land that was described in the deed through a sectional breakdown it was determined that the deed conveying the property to the seller did not include a section township and range. The title insurer required that the seller get a corrective deed, or it would be necessary to do a suit to quiet title. When the corrective deed option proved to be unachievable, upon further review of the legal description it was noted that it included a reference to a river and a state road which only could occur in one particular section township and range. After presenting this to the title insurer another solution was to have the surveyor sign an affidavit that the description without the section township and range described the same property that included the section township and range. The surveyor had no reservation about signing the affidavit and the title issue was resolved without litigation.

Oil Gas and Mineral interests; removing right of entry. 

One part of Florida’s Marketable Record Title Act [‘MRTA’] addresses old mineral rights. In the 1940’s through the 1960’ there were many transactions in Florida where the subsurface rights (typically oil, gas, and mineral [OGM] interests) were sold to a third party or retained by the seller. For a property where the OGM interests are not held by the current owner, under MARTA if a property has (1) at least one recorded transfer without stating that is is subject to an OGM interest held by another party and (2) the OGM interest has not been affirmed by those who hold the rights by recording a document in the public record of the county where the property is located within a thirty-year period from the last conveyance of the OGM interest, the there is no right of entry for OGM interest. Unless the highest and best use of the property is associated with mining or other subsurface extraction it is generally held that these outstanding OGM interests have no impact on the use or value of the property since without the right of entry the holder of the OGM interest essentially become a royalty interest since the holder of the OGM interest cannot get to the subsurface materials. Here are two unique situations. 

As part of a review of a tile commitment for a transaction in the late 1990’s there was an OGM interest from the 1940’s that has been recently acquired by a third party in the early 1990’s. There were no other documents of record since the original conveyance of the OGM interest. The commitment cited both the original transfer and the recent acquisition. The property associated with the commitment had several transfers where the mineral interest was not reference. I presented the fact pattern to the title agent that since (a) the subject property complied with MRTA to have the right of entry removed and (b) I asserted that once the thirty-year period had passed that the right of entry for mineral rights had expired and could not be retroactively established by the recent recording. The title agent and underwriter agreed, and the exception stated that the OGM interest did not have the right of entry for the subject property.

In another transaction the seller had owned the property for over forty years. Their acquiring deed stated that the OGM were held by a third party. There had been no affirmation for these OGM intertest since the seller acquired the property and the title commitment referenced these OGM interests as an exception. Presented to the title agent that if the Seller did not restate these third party OGM interests on the deed to the buyer that with that transfer achieved compliance with MARTA for the right of entry to be removed on the commitment. As part of the transaction requested and received an endorsement stating this and the title policy reflected that there was no right of entry for the OGM interest. 

Multi Seller Simultaneous transaction requiring Sellers to participate and complete transactional requirements/conditions. 

A transaction to acquire a tract was only practical if the purchase of both ownerships occurred simultaneously. Both sellers were aware of the simultaneous closing requirement when negotiations started. Conditions of the contract required each seller to participate in certain actions (one was similar to a zoning change). If either seller did not comply with these conditions the transaction would not be completed. To provide assurance to each seller that the other seller would be complying with these conditions each contract had a tri-party agreement signed by each seller and the buyer essentially restating the common required conditions, that each would also get a copy of any contract notification letters, and that each transaction would be extended to resolve any of the other transactional requirements (clearing title issues, survey encroachments, or concerns relating to contamination). This was an easier solution than one contract with both sellers.