A developer in Williams County, North Dakota sells a parcel of land to a buyer. The deed conveys 'the surface of the property only' and expressly reserves all oil, gas, and mineral rights to the developer. The buyer later discovers that an oil company has a valid lease on the mineral estate and intends to drill. Under North Dakota law, which statement is most accurate?
Correct Answer
B) The developer's reservation of mineral rights in the deed is valid, and the buyer holds only the surface estate.
Under North Dakota law, mineral rights may be severed from surface rights and reserved by a grantor in a deed. The developer's express reservation of oil, gas, and mineral rights in the deed is legally effective, creating two separate estates: the surface estate (owned by the buyer) and the mineral estate (retained by the developer). The oil company's lease on the mineral estate remains valid. This is a common scenario in North Dakota's oil-producing regions, particularly in the Bakken Formation area of Williams County.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Real property is immovable land and anything permanently attached to it, while personal property (also called chattels) is movable.
Tenancy by the entirety is a form of co-ownership available only to married couples that includes the right of survivorship and protection from individual creditors. Neither spouse can unilaterally sell or encumber the property.
Tenancy in common is a form of co-ownership in which two or more persons hold separate, undivided interests in property without the right of survivorship. Each owner can hold unequal shares and can independently transfer their interest.
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