Friday, April 12, 2013

Texas Oil and Gas Law - Adverse Possession, Part 1

It's been a while, but we're back.  The last time we spoke, we discussed the mineral estate generally.  Today, we will go over the concept of Adverse Possession with regard to the mineral estate. 

When the surface estate and the mineral estate are jointly owned (i.e. there has been no severance), then adverse possession extends to the minerals underneath.  In other words, if you acquire title to the surface estate through limitation title, then you also get the mineral estate (the whole bundle of sticks). 

Now, when we talk about adverse possession with respect to the mineral estate, the first issue that must be addressed is when the severance occurred, as well as whether the severance was a total severance or a partial severance. 

Let's tackle the easiest portion first - if the mineral estate was completely (100%) severed from the surface estate prior to the first date of occupation of the surface by the claimant, then the claimant cannot acquire any interest in the mineral estate.  This is logical, as the mineral owner's estate is separate and distinct from the surface. 

Now, if there was a partial severance, which has been known to happen, then the adverse possessor would be able to gain limitation title to the portion reserved (i.e. the non-severed portion). 

The authors of Texas Law of Oil and Gas note that a surface owner in possession is in no better position than an adverse possessor.  The state has had several cases where the surface owner has asserted limitation title to the mineral based on continuous surface occupancy that did not reserve the mineral severance (and based on tax payments), the state has noted that even where the instrument that separate the surface and the mineral rights was not recorded, possession of the surface under a chain of title that contains a mineral severance cannot be adverse to the mineral estate. 

We will continue with Adverse Possession on another post. 

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