A Texas rancher is selling a 1,000-acre ranch. The ranch has producing oil wells that generate $5,000 per month in royalty income. Under the TREC Farm and Ranch Contract, the mineral rights can be:
Correct Answer
A) Reserved by the seller, conveyed to the buyer, or partially reserved, as specified in the contract
Under the TREC Farm and Ranch Contract (and Texas law), mineral rights can be handled in several ways: conveyed to the buyer in full, reserved by the seller in full, or partially reserved. The contract and the Addendum for Reservation of Oil, Gas, and Other Minerals address this.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
More Promulgated Contract Forms Questions
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