With October 1 fast approaching and the necessity for Sellers to disclose oil and gas rights, there are practical issues regarding the newly revised offer to purchase and contracts (Form 2-T and 800-T).
While the Buyer is initiating the offer, the oil and gas rights representation is from the Seller. The listing agreements do not yet contain language regarding oil and gas rights; there are no fields within the MLS either which the cooperating broker could use to complete the check boxes on the offer to purchase accurately.
Please consider the following carefully:
• If the buyer’s offer does not have any boxes checked, then the Seller would need to check the boxes, initial and date it—a counter-offer.
• Upon receipt of the counter-offer, the Buyer would initial in the blanks provided and date the change; the cooperating broker would notify the listing agent of the acceptance; the Effective Date can then be determined.
Please remember that the NC General Assembly made this law and exactly prescribed the language that is now found in the offers to purchase. There was no forethought as to “how” this would affect the brokerage and legal community—so it is what it is—and brokers need to respond appropriately.
While NCAR may change the listing agreements, it won’t happen soon. I have, therefore, created a pdf which is now on the MLS system that listing agents should have their Seller(s) complete or at least have permission from the Seller to upload a completed form to the MLS. Please consult your own attorney as to whether you should have the Seller sign this form or whether an email from the Seller authorizing you to disclose the information on this form in the MLS is appropriate.
Uploading a document for the cooperating broker will facilitate the transaction and avoid the counter-offer situation described above.
The name of the document is Oil and Gas Rights Disclosure and is found on the MLS menu under Links, then select Links and Documents.
Cooperating Broker: Seller(s) has authorized the following information to enable you to submit an offer:
OIL AND GAS RIGHTS DISCLOSURE:
Oil and gas rights can be severed from the title to real property by conveyance (deed) of the oil and gas rights from the owner or by reservation of the oil and gas rights by the owner. If oil and gas rights are or will be severed from the property, the owner of those rights may have the perpetual right to drill, mine, explore, and remove any of the subsurface resources on or from the property either directly from the surface of the property or from a nearby location. With regard to the severance of oil and gas rights, Seller makes the following disclosures:
Yes No No Representation
_____ _____ 1. Oil and gas rights were severed from the property
Buyer Initial by a previous owner.
Yes No
_____ _____ 2. Seller has severed the oil and gas rights from the
Buyer Initials property.
Yes No
_____ _____ 3. Seller intends to sever the oil and gas rights from
Buyer Initials the property prior to transfer of title to Buyer