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CALL THE LEGAL HOTLINE: NC REALTORS® have free, unlimited access to our Legal Hotline and lawyers with more than 30 years experience. Call 800-443-9956 or email legal@ncrealtors.org with any questions regarding contracts, forms, fair housing, disclosure and more.

Links to two publications by the N.C. Department of Justice on the subject of oil and gas leases can be found on the N.C. Real Estate Commission’s website at ncrec.gov under “Resources” and “Related Links.”

matters affecting title to real property is outside the scope of a real estate broker’s expertise and constitutes the practice of law. In addition, a real estate agent representing a seller or buyer would not be expected to conduct an independent investigation to confirm whether the seller’s representations on the Mineral and Oil and Gas Rights Mandatory Disclosure Statement are correct. A North Carolina real estate attorney should be engaged to determine whether any such rights have been severed from the property. This determination typically is a part of the title search performed by the closing attorney. If mineral, oil and/or gas rights have been or will be severed from the property, the buyer should consult with an attorney about the potential consequences of proceeding with any purchase of the property. # The information in this article has been taken from the Buyer and Seller Advisories, which are available to NC REALTORS® online at ncrealtors.org.

Agent Duties Regarding Mineral, Oil and Gas Rights Disclosure Advice from the NC REALTORS® Legal Hotline QUESTION: Regarding the Mineral and Oil and Gas Rights Disclosure Statement, are agents expected to confirm whether mineral, oil or gas rights have severed by a previous owner or by the current owner? ANSWER: Generally speaking, the answer to your question is “no.” There are six representations a seller must complete in the Disclosure Statement. The first three relate to mineral rights, and the last three relate to oil and gas rights. The listing agent would ordinarily not be expected to conduct an independent investigation to confirm the accuracy of any “no” answers or, in the case of a “no representation” answer, confirm that mineral, oil or gas rights have not been severed by a previous owner. Discovering and rendering opinions on matters affecting title to real property is outside the scope of a real estate broker’s expertise and constitutes the practice of law. If a broker knew or should have known about a severance of mineral, oil or gas rights, the broker would be required to make disclosure. Typically, a broker wouldn’t know or have reason to know. However, an example where a broker did have special

knowledge was brought to our attention by an NC REALTOR® member. He knew that mineral rights had been severed from the title of a lot he owned in an older subdivision because he had been told when he bought the lot that the mineral rights had been retained by the developer when the lot had first been conveyed. If that broker becomes involved in listing or selling another lot in that same subdivision, we would suggest he discuss the matter with the seller up front. If the seller doesn’t know whether rights have been severed from the title to the property, the seller should be encouraged to engage a real estate attorney to make that determination. If the seller doesn’t want to do that, the listing agent should advise the seller that the listing agent will be under an obligation to disclose to prospective buyers the possibility that mineral rights have been severed from the title to the property. On the other hand, if the broker represents a buyer who is interested in purchasing a lot in the subdivision, he should advise both his buyer client and the listing agent that mineral rights may have been severed from the title to the property. ncrealtors.org • INSIGHT  9

Insight | May 2017  

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