What Mineral Rights Do You Have While Buying on a Land Contract

[ktm-don]

My question involves real estate located in the State of: Michigan

My sister and I are selling property on a land contract in Michigan. The buyer has signed an agreement to lease the mineral rights, receiving a signing bonus and possibly future royalties.

The energy company will reject his lease unless we, the sellers, sign a 'Ratification'. I understand that basically we would accept his contract terms in the case of default.

We are unsure if he has the right to lease the mineral rights while we still hold the deed. The sales agreement did not specifically reserve the mineral rights. We see a risk of damage to the property value if it reverts back to us due to seller default.

Any help would be appreciated.

[Mr. Knowitall]

I expect that the company attempting to lease the mineral rights has already reviewed the contract and title history to confirm that you had the right to convey the mineral rights and that they are included in the land contract. If you are not sure what you conveyed, have a real estate lawyer review the land contract and, if you aren't sure of whether or not you owned the mineral rights, the title history.

Some sellers under land contracts decline to sign ratifications and suggest, instead, that the buyer pay off the land contract if they want to lease the mineral rights.