If the broker uses a TREC residential contract form, may the broker add a simple reservation clause with respect to the minerals in special provisions?

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  • If the broker uses a TREC residential contract form, may the broker add a simple reservation clause with respect to the minerals in special provisions?

The Broker/Lawyer Committee at TREC has on several occasions chosen not to insert a reservation clause into the residential contract forms. The committee believes that the better public policy is to provide for the conveyance of the fee simple estate (without reservations) in residential sales that utilize the standard TREC forms. Due to the fact that most residential property owners in urban and suburban areas are not familiar with oil and gas transactions, the committee believes that the negotiation of such matters is best addressed by attorneys representing the parties in residential sales. Additionally, historically, these items have not been at issue during negotiations in the typical residential sale (probably due to the fact that the minerals may have been severed, the surface is too small to worry about drilling activity, and cities have regulated drilling activities within their jurisdictional limits). Based on the foregoing, the better alternative for the broker in this question is to suggest to the parties to seek the advice of counsel.

Source: TAR

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