Blogging Tulsa Real Estate: Oklahoma

This Obeo Tour has a style designer that let's you select colors for your walls, floors, trim, etc. Play around with it and let me know how you like this feature.

This property includes upgraded appliances, including a stacking Bosch Axxis washer and dryer, a GE Triton XL dishwasher, a GE Spectra range with a self-cleaning oven, an Allure vent hood, and a GE refrigerator with an electronic ice maker.

"The lease is available; you can buy the lease."

A REALTOR®-Associate in my company said this today in one of our land and ranch meetings while touting a lovely 269-acre parcel of land which I will be previewing later today.

I thought to myself, "That's pretty cool.  Owning the oil & gas lease is the next best thing to owning the minerals." 

Then I wondered if she really meant what she said.

Did she understand what she said?  Did she mean what she said?  Did she even know what she said?

[I kept my mouth shut in the meeting rather than interrupting and going off on a tangent -- since nobody really cared anyway except me (I am one of those about whom it is said, "There's always one in every group.....")  However, I couldn't sleep.  The distinction is important and I just cannot keep it to myself.  I felt a blog coming on, so I got out of bed to write.  So here it goes........ ]

When we own land, we don't actually own the land.  We own a bundle of rights which includes the use of that land with restrictions.

When a landowner owns land in fee simple, that means he owns the full bundle of rights.  Fee simple absolute or simply "fee simple" means that you own everything from the center of the earth up to where the government allows planes to fly.

As an owner, you can lease the entire bundle of rights to another person or you can lease a particular right.  Thus you can lease the oil, gas and other minerals, you can lease the grazing rights, you can lease a cottage on the land (or just a room in that cottage), or you can lease hunting rights, etc.

If the mineral rights have been severed from the surface rights (meaning that a previous owner somewhere in the chain of title has retained the oil, gas, and other minerals in a recorded deed), then it is the owner of the mineral estate who has the right to lease the right to drill and produce the oil, gas and other minerals in and under the land.  The landowner who only owns the surface cannot lease the minerals as the lessor.

However, the landowner who does not own the minerals can lease the minerals as a lessee.  Usually it is someone other than the surface owner who leases the minerals (much to the dismay and sometimes anquish of the surface landowner).  This is a pretty cool option.

Now, as someone purchasing a lease, it needs to be understood that a lease can and will expire.  You can have a lease for 2 days or even 99 years -- but no more.  You cannot own a lease in perpetuity.

Having said that, an oil & gas lease is valid as long as it is in it's primary term, be it 2 days, 3 years, 10 years, etc.  This primary term is negotiated by a landman or an oil & gas attorney who is qualified to navigate the ins and out of such leases at the time that the lease is signed and purchased.  A lease is a legal document that should be filed at the courthouse to have actual notice announcing to the world that such a lease exists.  This is hugely important.

The lease is valid as long as it is in it's primary term or is held by continuous production.  Oh, there is the kicker, continuous production.  In other words, if you are the leaseholder (the lessee or the assignee), then you had best be drilling or producing oil & gas that makes it clear that you are actually doing something.  This is technical and many leaseholders lose their lease after pumping milions of dollars into wells in the hopes of making them profitable, only to lose their investments of time, expense, and effort to someone else who picks up the lease at a later time.  Boo hoo, so sorry, good bye..... 

Now if the leasholder does not have an operator's license, then he must hire an operator to operate the lease.  Only an operator can operate oil & gas wells.  Anybody can own the lease, but they have to hire an operator if they themselves are not licensed to operate oil & gas wells.  An operator is the only person authorized by the State of Oklahoma to do anything on an oil & gas lease.  He must participate in every activity. 

An operator can be a company or a person.  An operator has a license number.  In the eyes of the Oklahoma Corporation Commission Joe Operator is exactly the same as ExxonMobil and are under the same laws, rules, regulations, and restrictions. One operator is a single person and the other operator is a multi-national corporation.  When either one comes on your land, they are exactly the same in the eyes of the State of Oklahoma.  There is virtually no difference -- they are both operators.

An oil & gas lease can be sold or assigned to another person by means of an assignment or a bill of sale.  Both of these should be filed at the courthouse as soon as possible to effect actual notice of assignment of the oil & gas lease.  Again, this is hugely important.  Race notice literally means that the first person to the courthouse wins.  No kidding, I heard of one situation in Rogers County where a lessee was dying and needed cash to pay medical bills.  He assigned the same oil & gas lease to six or eight assignees.  The first one to file the assignment at the court house got the lease. 

Of course, you can own a lease that isn't registered, but I recommend being safe.  Toodle on down to the court house and get the documents filed.

Important note to self:  Don't leave legal documents in the kitchen drawer.  File them at the court house!  Then put original documents in a safe place, such as a safe deposit box.

"The lease is available; you can buy the lease."  I think she means that you can purchase an assignment.  Or maybe she meant you can purchase the minerals from the owner of the mineral rights.  I'll have to ask her.

The gap check revealed a demolition notice on the day of closing.

It wasn't there when the abstract was updated in September.  It showed up yesterday morning.  We were closing at 3:00 pm.  

We found out about it at the closing table.  

A demolition notice had been filed by the City of Tulsa that very morning.

Who knew that a Demolition Department even existed!

Did you ever wonder what a gap check does?

The gap check is one of those items on a HUD Settlement Statement that I have always regarded as just another way for the closing companies and lawyers to make money.  The typical cost of a gap check is $75.

I never paid a whole lot of attention to the gap check, but I will from now on.

The closer asked the buyer whether or not he wanted to proceed with closing.  

Of course it was a Friday afternoon and no one seemed to be answering his phone.  We kept trying to reach someone who could tell us what was going on.

The home was an REO and, of course, being sold "AS IS WHERE IS."

I was concerned that the buyer would be saddled with a bill for demolition, whether or not he wanted the home to be demolished.  Fortunately, we were able to contact someone at the City of Tulsa.  

It turns out that a citizen had called The Mayor's Action Line in September about a porch on the front of the house that was falling off.  The code inspector had gone out to the home and had recommended the house be demolished.

Meanwhile, the listing agent listed the house and recommended the bank remove the offending porch, which was already removed by the time my buyer saw the property.

Neither the owner nor the real estate agent were aware of the code inspector's recommendation to demolish the house.

The bank that owned the property was paying three years of back taxes, but I thought they should pay for the demolition rather than my buyer.  However, if my buyer delayed by choosing not to sign the paperwork, he would have to pay a $100 per diem charge.

In the end the buyer decided that he would go ahead and close and probably will be tearing the house down himself.  That would probably be a lot cheaper than letting the City of Tulsa schedule the demolition and have a contractor do the demolition.  A professional demolition crew would probably charge the owner more than my buyer was paying for the property -- which was not a lot.

The City of Tulsa stopped it's process of demolition and will be giving my buyer a chance to assess what he has purchased.  

We closed.  Yeah!!

You cannot get title insurance on mineral rights.

How do I know this?  In 2006 I took the introductory course for new landmen at the University of Oklahoma.  The course was an intensive two-day course offered by a CPL (a Certified Professional Landman -- the highest and most prestigious designation for landmen).  

Most of the attendees were from Texas and Oklahoma.  About half of the attendees were middle aged women working for title and abstract companies -- the very people that go to the court house to build abstracts for the attorneys who read the abstracts and write title opinions.

I asked this specific question:  Can you get title insurance on mineral rights?  The response from the presenter was a flat out, "No."  You can only get title insurance on surface rights.

Just because attorneys rendering title opinions cannot offer title insurance does not mean that they cannot render an opinion regarding whether or not the minerals are included with the land. 

Asuming that the abstract is up to date and complete, the attorney looking at the abstract is looking at every piece of paper that has ben filed at the court since Oklahoma statehood -- 1907.  In many cases the documents will predate statehood when the Oklahoma Territory and Indian Territory became collectively known as the State of Oklahoma.

In Oklahoma's Indian Territory it all starts with allotment -- when an Indian (a/k/a native American) was given a quarter section for his homestead and three-quarters of a section for his allotment.  He therefore has two pieces of property comprising approximately 640 acres in fee simple absolute.  He owns everything from the center of the earth to the heavens..... well, let me rephrase that.  He doesn't own the land per se, he owns the rights to everything --  he owns the whole bundle of rights, from the center of the earth to where the US government lets the planes fly.  We say that he owns that whole bushel basket full of rights in fee simple absolute.

The allotment documents do not specifically say that he owns the mineral rights, a/k/a "oil, gas and other minerals."  It just is that way.

So let's say Joe Citizen happens to get hold of his abstract and wants to see if he owns his minerals.  He cannot find any place on his abstract where the deeds says that the Grantor "retains" or "reserves" a certain percentage of the minerals when granting the land to the Grantee.  That means that the minerals were conveyed along with the surface.  The Grantor conveys the whole bushel basket full of rights in fee simple.

Now let's say that the Grantor reserves the minerals.  He then creates a separate basket of mineral rights for himself.  The deed for the conveyance of the surface rights shows that a certain percentage of the minerals were reserved or retained.  Now there are two estates:  the surface estate and the mineral estate.  (The mineral estate is dominant, by the way.)  An  attorney will only be able to get title insurance for the surface rights. 

The mineral estate takes on a life of its own once it is severed from the surface estate. There will not be a Mineral Deed created until the mineral estate is conveyed.  This is where it gets tricky and heirs often do not even know they own the minerals.  Eighty years later it becomes like looking for grandmas' jewelry after it has been divided up.  It's the job of a professional landman to track down all those little pieces of mineral rights that have been divided up.

In short, that's why you cannot get title insurance on mineral rights in Oklahoma.  It just gets too complicated otherwise.

The loft above the stable at this equestrian estate in Bixby, Oklahoma has so many uses.  Of course you could store stuff up there… boring!  You could stack stuff there.  But why?  You don’t need to stack hay there because this horse property has another barn where the hay is stacked.  Besides, then you couldn’t look out of the cute little dormer windows of the loft! 

Let’s examine all the fun ways to use the loft above the four  Rockin J horse stalls of this beautiful Morton stable.

The loft above the stable at this Bixby equestrian estate would be so much fun for playing with plastic Breyer horses, Brio train tracks, Hot Wheels race cars, or other things that take up so much space and clutter up the gameroom or family room of the house.   No matter how big your house is, there’s never enough room for kids to really have a wonderful adventure.   There’s plenty of room in this loft above the stable at this equestrian estate in Bixby Oklahoma – which, by the way, happens to be for sale.

When I was a kid growing up we played in the basement;  but we don’t have basements in Tulsa, Oklahoma – well , perhaps a few in midtown Tulsa – but for the most part we have to build shops and man caves to create those special play places.  The loft above the stable at this Bixby equestrian estate will cure the itch of kids in the family who want to have a place to play creatively where they can leave the toys lying out without worrying about the maid sucking up the little Playmobil pieces in the vacuum cleaner. 

When my son Michael was a tyke I taught him to love Brio trains and Playmobil landscapes.  We laid out a new town each day, always coming up with a new design in his bedroom, taking the track down the hallway to the gameroom .  We were constantly running out of train track and having to run to yhe Kiddlestix toy store in Tulsa to buy more of what we needed.  The game was to be able to turn the train around and go the other direction without backing it up.  This took up a lot of space.  How we would have loved the loft above the stable at this Bixby equestrian estate!  You could go and go and never run out of space to play.

I had a horsey friend in Jenks whose girls took riding lessons from my hunter-jumper trainer in Bixby.  My friend was into dressage and had a nice little farmette on four acres in Jenks with a nice Morton barn.  What I really remember about her house was the big closet in the gameroom.  Every shelf in the closet was filled with Breyer horses.  There were hundreds of them.  Then along one wall of the family room were doll houses and horse barns of the proper scale and size for Breyer horses.  Since this was one of the main living areas of her house, my friend would never let the horses play in the family room for very long.  So they lived on the shelves in the closet.  Had she had a loft like the loft above the stable at this Bixby equestrian estate, her girls would have been able to play with their plastic horses every day after school with their horse-loving  friends  in the loft over the barn.

Can’t you just imagine having a slumber party in the loft over the stable at this marvelous Bixby equestrian estate?  You could invite your friends from your pony club or your round up club – whatever hobby you happen to enjoy.  You could play in the pool or lounge in the hot tub and then lay your sleeping bags on the floor of the loft in the barn and tell stories all night long without  waking any adults at the main house.  Only the horses below you would be able to share your secrets over the paddock fence the next day. 

Memories will be created in the loft over the stable of this Bixby equestrian estate…  and wait till I tell you about the hay barn with the rock climbing wall!

 It’s all for sale and you can find out more by calling Debbie Solano, Broker Associate with Coldwell Banker Select, Realtors in midtown Tulsa, Oklahoma (918) 712-4310, extension 1473 or by going to TulsaRealEstateWeb.com or NortheastOklahomaRealEstate.com or BixbyOklahomaRealEstate.com or OKLandandRanches.com.

Intangible Personal Property Tax Has Been Expanded to Locally Assessed Businesses by Oklahoma Supreme Court

Mike Means of the Oklahoma State Homebuilders Association sent out a legislative update this morning, saying:

In September of 2009, the Oklahoma Supreme Court ruled that with the exception of items listed in Article 10, Section 6A of the Oklahoma Constitution, locally assessed businesses should be paying ad valorem taxes on their intangible personal property.  This means that such things as trademarks, software, patents, contracts, customer lists, company names, etc., are now taxable as intangible personal property.  Talk about full employment for the local assessor!  Currently locally assessed companies do not pay ad valorem taxes on their intangible personal property.  The Supreme Court ruling changes that.

The solution is to look at an in lieu tax.  Our state constitution allows for taxpayers to pay certain taxes in lieu of other taxes.  Presently, Oklahoma businesses are liable for a state franchise tax.  By creating a small business activity tax that would be paid in lieu of ad valorem tax on intangible personal property, we can eliminate the current franchise tax and save Oklahoma businesses from a large tax increase that will inevitably result from the Supreme Court's ruling.  The ultimate details of this solution is being worked out by the legislature but the ultimate goal is that it be revenue neutral.

Without this solution, one tax expert says this will be the biggest tax increase in state history.  We cannot do nothing.

This issue of ad valorem taxation affects all Oklahoma businesses.  It could potentially hurt our economy by scaring business away from Oklahoma.

This is the same Oklahoma Supreme Court that recently ruled that REALTORS® can be sued for fraud if they give inaccurate court house information to buyers regarding residential square footage.

By the way, does anybody know how someone gets on the Oklahoma Supreme Court?  How can we get some new blood on the bench?  We shouldn't have to spend so much time trying to clean up their mess.

Scenic River Properties on Baron Fork Creek For Sale near Tahlequah, Oklahoma don't come on the market very frequently. 

It is hard to find access to the scenic rivers of Northeast Oklahoma, because the little roads leading down to the Illinois River or Baron Fork Creek have been shut off and barricaded.  You really have to know someone who owns land along the river in order to get permission to cross their land to get to the creeks and streams feeding to the Illinois River or it's tributary, Baron Fork Creek, also known as Barren Fork Creek.

Baron Fork Creek flows out of Arkansas through a little valley near the village of Baron, Oklahoma, hence it's name "Baron" Fork Creek.  However, the roadside sign along Oklahoma Highway 51 indicates that "Barren" Fork Creek is an Oklahoma Scenic River.  Go figure.  The creek is known by both spellings:  Baron or Barren.

To find a unique recreational property with frontage on the river is especially unusual. Scenic river properties on Baron Fork Creek with full access to the creek are very hard to find, but to find one for sale at a reasonable price is especially unusual.

There is currently a unique recreational property for sale with frontage on the river.  That property has approximately 32.64 acres with approximately 865 feet of frontage on Baron Fork Creek.

For the past twenty-five years or so the creek has flowed through an oxbow at the bottom of the bluff below the house, however a couple of years ago the creek changed it's main channel to a point further west, leaving the oxbow with less water. 

Since these pictures were taken in December 2009 the creek has begun to flow back through the oxbow to follow its traditional course.

To find other scenic river properties on Baron Fork Creek for sale near Tahlequah, Oklahoma, you could look for residential properties for sale with a creek in Briggs School District or if you are looking to build a camp or second home, you could search for unplatted building lots or vacant land on a creek in Cherokee County Oklahoma.

Eagles soar above Baron Fork Creek at the point where the river flows through the "S" curves of the oxbow about a mile below the Highway 51 Bridge.  If you were to own one of the unique scenic river properties on Baron Fork Creek then you would be able to fish for trophy bass or just sit and sip your coffee while watching the bald eagles soar above Barren Fork Creek as it wends its way toward the Illinois River and the Arkansas River further downstream.

The property that is currently for sale happens to have two homes, both built in 1996.  One home is a "stick-built" home with full brick veneer on the front and vinyl siding on the back.  The other home is a double-wide Oakwood mobile home.  There is a total garage capacity for four cars.  There is also a horse barn and several sheds and outbuildings.  The property is completely fenced and very very private.

The current owner raises walking horses and enjoys riding the horses across the creek and up to the old railway right-of-way that is on the west side of Baron Fork Creek.  The tracks have been taken up and so you can, with permission from landowners, ride your horses for miles along the railway right-of-way where there are no gates.

Thus, you can understand how wonderful and rare these scenic river properties on Baron Fork Creek for sale east of Tahlequah in Cherokee County, Oklahoma are truly unique recreational properties.

This is where equestrians and fisherman can truly co-exist on the banks of scenic rivers.

Horse farms for sale with a pond and a barn in Rogers County Oklahoma may be hard to find if you aren't working with the right REALTOR®. 

However, if you call Debbie Solano, you'll discover quickly that it's easy to find horse property in Northeast Oklahoma, because she has already thought about the problem and figured out exactly how to help you find all the horse farms for sale with a pond and a barn you could possibly want, whether you're looking in Rogers County, or in any other county around Tulsa in northeast Oklahoma.

What's so special about finding horse farms for sale with a pond and a barn?  Most realtors sell houses in subdivisions and don't necessarily specialize in farm and ranch properties. A farm and ranch specialist can narrow the search to find exactly what you are looking for

A realtor specializing in horse properties not only knows the inventory, but he or she can show you how to find horse farms for sale with a pond and a barn if they have been properly coded in the Northeast Oklahoma multilist as having a barn, a pond, and are listed as either a farm and ranch property or as a property that has been zoned "Horse Permitted" in some way.

Farm and Ranch Properties:

There are currently 7 horse farms for sale with a pond and a barn in Rogers County, Oklahoma.  They range in price from $185,000 to $655,00.  These are all the current farm and ranch listings in Rogers County that have a pond and a barn. 

Now if you were to take away the requirement for a barn, you would find that there are currently 17 farm and ranch properties for sale with a pond (but without a barn) in Rogers County, Oklahoma.  These properties range in price from $115,000 to $1,100,000.

Let's try the other way around and you will find that there are 14 farm and ranch properties for sale with a barn (but without a pond) in Rogers County, Oklahoma.  These properties range in price from $179,500 to $655,000.

As you can see, there are all kinds of permutations that will change your property search. If no pond is available on a property, we can always look for farm and ranch properties for sale in Rogers County that have a creek instead.  (There are currently 8 farm and ranch properties in Rogers County Oklahoma that have a creek).  You can always dig a pond if one is not already available on the property.  Add a barn to the search for farm and ranch properties with a barn and a creek and you will find that there are currently 3 properties available.

Or, if there is no barn, then you can always build one later. 

So you can always add a pond and/or a barn, but a creek or a river is difficult to replace.

Oh, for those perfect horse properties that have all three features:  farm and ranch properties with a barn, a pond, and a creek.  Ooops!  There are now only two farm and ranch properties in Rogers County with a barn, a pond, and a creek and they are not the less expensive properties.

Are you beginning to understand why you need a REALTOR who specializes in farm and ranch properties?

Horse Permitted Properties:

"Horse Permitted" addresses a zoning question and has little to do with the description of the property being sold.  Horse farms for sale with a pond and a barn hopefully will be marked as "horse permitted," but when the realtor is filling out the paperwork, there are only a limited number of selections that can be checked on the listing forms.  So if "horse permitted" is missing, the buyer can usually make the assumption that if it is a farm, then it has agricultural zoning -- but not always.

And vice versa.  Perhaps there is a nice house on a lovely piece of land -- perhaps with quite a bit of acreage, that has never been set up as a farm or a ranch. There are many properties in Rogers County that have the potential to become horse farms for sale with a pond and a barn.  These properties may be zoned in such a way that horses are allowed or "permitted" to be there. 

In Rogers County "horse permitted" would mean Agricultural zoning or RS-60 (which is Residential zoning in rural subdivisions with a minimum of 2.5 acres where there is a limit on the number of horses or other livestock).

Currently there are 8 "horse permitted" properties for sale with a pond and a barn in Rogers County Oklahoma.  They may or may not necessarily be horse farms for sale with a pond and a barn; they simply have the correct zoning to be horse farms for sale with a pond and a barn. 

A barn does not a farm maketh.

Is the farm registered with the U.S. Department of Agriculture?  Is there a farm number?  Has the owner been filing a Schedule F?  Do the Sellers drive a truck with a Farm tag?  Do the Sellers pay sales tax on their horse feed?  All of these questions are valid, but irrelevant when a realtor is checking Farm and Ranch on the listing documentation.

What is a barn?

When you are looking for horse farms for sale with a pond and a barn you will find that your idea of a barn may be quite a bit different from the listing realtor's interpretation of a "barn."  In our Northeast Oklahoma multilist there are a few very nice garden sheds that are coded as barns. 

Then again, is there a distinction between "barn" and "stable?"  Not in our multilist.  A stable with horse stalls of any kind is a barn.  A large hay barn is a barn too. 

Run-in sheds and equipment sheds are usually classified as "sheds," but sometimes are labeled as "barns" by different realtors.

What is a pond?

Some farm ponds are small lakes, but in the Northeast Oklahoma multilist they are all ponds.  If they have a name on a map, then they are lakes.  Otherwise they are ponds.

A lagoon is not a pond.  It is a hole in the ground into which sewage is retained when the land does not "percolate" or "perk."  Lagoons have been largely superseded by aerobic septic systems.

Look at the pictures

Confused?  Join the club!  Just be sure when you are looking for horse farms for sale with a pond and a barn, that you search for farm and ranch properties separately from "horse permitted" properties.

In other words, do separate searches for both categories.

Then again, skip the searches for farm and ranch properties and "horse permitted" properties altogether, since many listing realtors do not check either box when they are filling out the paperwork on a particular property.

The broadest search would be to search for acres.  Well, scratch that too.  Some realtors don't even list the property size. 

Just look at the pictures and decide for yourself if what you are looking at are indeed horse farms for sale with a pond and a barn.

Mineral Rights and Surface Rights in Oklahoma -- Do What Your Client Wants

If you have been following my blogs, you know I am passionate about my clients getting the mineral rights -- putting the chocolate cake back under the icing.

I showed property this week in Osage County, Rogers County, Tulsa County, Okmulgee County, Okfuskee County, and Pittsburg County to two different sets of clients.

In every case the realtors said the minerals did not come with the property, that the sellers were only selling the surface rights. 

However, when meeting and speaking with the sellers directly, in half the cases the sellers owned the minerals and were willing to convey the minerals with the property.  These sellers had minerals that were not in production.  When they sell with the "old" Oklahoma contracts used by GTAR, these sellers will be conveying the entire bundle of rights -- whether or not the realtors know what that bundle of rights contains or not.  The attorneys will be probably be using a General Warranty Deed conveying the entire chocolate cake in fee simple  or even if unbeknownst to them there is a piece or two already eaten out of the cake or not, they are planning to sell 100% of what they have, thereby conveying the property through a General Warranty Deed.

However, one seller this week refused to sell the minerals because the gas under his land was being produced and he wanted his descendants to get the little royalty checks in the future.  His land had been unitized already.  That particular property was out in the country near McAlester where a lot of gas has been being produced in the last few years.  My buyers were comfortable with not getting the minerals because they loved the house and the land.  They did not seem to really understand that just because the property is already being produced doesn't mean the D6 dozers and drilling rigs won't come onto the property in the future.  If they had bought that place they would only have been purchasing the icing on the cake because the seller wanted to sever the mineral estate from the surface estate, making the minerals personal property.

We couldn't get the deal together anyway, and so the minerals ended up being a moot point.  In the offer I put:  "Seller shall retain 100% of the minerals under this property."   To me that language using the "old" Oklahoma contract still being used by GTAR would allow the buyers to acquire the entire bundle of rights without the minerals, while still retaining air and water rights and any other rights that go along with the surface. 

There is no way I will use a "Surface Only"  contract.  Thankfully, the Greater Tulsa Association of Realtors (GTAR) has not approved the use of the new Oklahoma contracts.

Nevertheless, if I have a Single-Party Broker's agreement, I am legally bound to obey my clients and do what they want, even if I think it is not in their best interest.  You bet in such a case that I will be documenting that I inform them of the negative consequences of not getting the mineral rights.

http://OKLandandRanches.com

http://TulsaRealEstateWeb.com

http://NortheastOklahomaRealEstate.com

http://BixbyOklahomaRealEstate.com

http://dsolano.homesandland.com

The unintended consequences of the new Oklahoma real estate contract forms are numerous and complex. On Friday the Oklahoma Real Estate Commission (OREC) unveiled the new real estate contract forms. The OREC has recommended that licensed real estate brokers and their associates begin using the new forms on November 1, 2009. It's not too late to comment and request that changes be made. Our future economic well being and our national security could potentially be at risk.

The new forms will put into limbo all mineral rights that are not now active or leased, because unproduced oil & gas rights are not tracked nor taxed. Mineral rights will be put in limbo where no one will know what is going on until the State of Oklahoma comes along and takes them as unclaimed property, thereby depriving the landowners of the State of Oklahoma of a significant portion of their wealth.

The county tax assessors only track and tax the surface owners. Oil & gas producers track producing mineral holders in order to distribute royalty checks. Because they are never taxed and do not receive royalty checks, descendants of unproduced mineral holders are unaware of their ownership of severed oil & gas rights. Moreover, privacy laws make it difficult for landmen to find heirs. Detailed census data is closed for seventy years -- that's three generations of tough genealogical work for anyone trying to find holders of mineral rights.

The lawyers, the landmen, the abstract companies, and the title insurance companies will be the big winners of the new contract forms. The consumers, landowners, undeclared mineral holders, and real estate brokers who do not broker oil & gas rights will be the biggest losers.

Potentially the economic engine of the State of Oklahoma will be crippled to the extent that the state may eventually have to quiet title undeclared mineral holders in order to prevent foreign investors from quietly investing in these precious personal property rights that will be regularly severed through the use of the new contract forms.

Only the Osage Nation, who already owns most of the mineral rights in Osage County (all but about 800 acres or so) will be able to conduct business unimpeded by legal problems.

Those of us who sell rural land have been aware of the problems caused by the previous Vacant Land contract forms and have been hoping to get them changed so that the personal property rights would no longer be severed by the vacant land contract forms for "surface rights only." Instead we were shocked to discover that all the new contract forms are written for the purchase of surface rights only. Knowlegable brokers and associates will be crossing out certain words in the new contracts. However, that will not prevent damage being done by ignorant real estate sales associates who will not be realizing that they are not representing the best interests of their buyers and their descendants.

Does this mean that the OREC wants all real estate brokers and associates using these new forms to be representing their clients as transaction brokers? This must be the case, because by law a single party broker must advocate for and work in the best interest of their clients. Any buyer's broker using the new forms without alteration will not be representing the best interest of their buyers and therefore will be leaving themselves open for legal action if they act as a single party broker.

Yeah, yeah, yeah, how can that be? Just wait until the D6 dozers and the drilling rigs start pulling up on your buyer's land! They'll cry when they realize that the mineral estate is dominant over the surface estate. Then they'll call their lawyer who will then call you. You will be responsible for not having explained to your buyer the unintended consequences of their having purchased only the surface rights.

At least with the old forms our buyers were able to purchase all of the rights owned by the seller -- however many and kind of rights those may have been.

Moreover, we can all kiss goodbye to the concept of quiet enjoyment.

 http://TulsaRealEstateWeb.com

http://NortheastOklahomaRealEstate.com

http://BixbyOklahomaRealEstate.com

http://dsolano.homesandland.com