Severed Mineral Rights

[Terrel L. Shields]

Could I just say according to the contract the rights conveying are less than fee simple, but appraise it with the hypothetical that full fee simple rights convey

No - that's not going to fly with the UWs

If a portion of the property's bundle of rights is conveyed to someone else prior to closing, is the buyer really getting true fee simple title/ownership??

No. They are getting less than fee simple.
Put an asterisk in the fee simple box. Note that the transfer is fee simple sans minerals and that is commonly referred to as "Fee in Surface". Then you need to explain that there is no O & G drilling in the state, mining is unlikely, and the lack of mineral rights does not appear to have any impact upon value...unless you can establish that it does. In many places, the absence of mineral rights is a huge issue because you lose control of the property. You cannot stop the mineral owner from developing the minerals even if they have to compensate you for the damage to the surface. If you are a farmer in E. Colorado with a section of land and big equipment, the last thing you want to do is drive around 8 or more oil wells while trying to farm.

In E. Oklahoma, I met a rancher who said they tried to lease him but since he had more than 50% of the mineral rights, they could not force pool him in that section. They would have to drill on a smaller unit off his property if they drilled. He didn't want the roads and accouterments associated with development.

 

[Restrain]

Gonna disagree with Terrell in that it is "Fee in Surface". It will depend on what mineral interests were previously severed. For example if O&G were severed, the property owner would still have the rights to those sub-surface rights to sand, gravel, coal, and other minerals. A prime example is the guy who was digging a septic field in his back yard and found an emerald mine. True story. Conversely, the surface minerals may be conveyed, but may be restricted to sand and gravel, coal or other surface minerals. Coal can be a sub-surface mineral.

Explain what is involved. The bad news if that if coal or other surface mineral rights are conveyed, the owner of those rights retains the ability to mine those minerals. There is a small community in Texas that I know of that was having to move the homes because the coal strip mine was coming through. You need to know WHAT those severed mineral rights are.

 

[Terrel L. Shields]

Severed minerals whether partial mineral estate or not. Some mineral deeds may only deed off oil and gas and I recently did one where they kept the Oil & gas rights but leased the quarry rock and surface. Some old U. S. government tracts sold off kept 50% of the coal rights and 100% of the uranium rights (early 50s boom era clause). And the homestead act initially gave fee simple. Then it took only "coal, oil or natural gas". Then it took all minerals. My cousin had one of those intermediate deeds and he sued over whether carbon dioxide was a mineral or a gas. The same U. S. court that ruled carbon dioxide was a mineral and thus the Cortez pipeline was exempt from FERC regulation, also ruled that CO2 was a "natural" gas and the government retained the mineral right.