Mandatory Disclosure of Mineral Rights with Real Estate Sales


With very few exceptions, state law now requires all sellers, even builders and sellers of new construction, to disclose in the sales contract the status of oil and gas rights regarding any property offered for sale. The limited exceptions deal primarily with transfers of property pursuant to court order or the administration of an estate, sales between co-owners of the property, and lease with option to purchase contracts where the lessee occupies the dwelling. Notably, parties negotiating a real estate sale cannot waive this oil and gas rights disclosure even if they agree not to complete a residential property disclosure statement pursuant to N.C. Gen. Stat. Chapter 47E.

To find the mandatory language to include in boldface type in your real estate contract, see N.C. Gen. Stat. § 47E-4(b2). The law requires the seller to answer three specific questions, and then obtain the buyer’s initials to acknowledge the oil and gas disclosure as part of the real estate contract. The seller must answer the following: 1) whether the oil and gas rights were severed from the property by a previous owner; 2) whether the seller has personally severed such rights from the property in the past; and, 3) whether the seller intends to sever said rights from the property prior to transfer of title to the potential buyer. All three questions must be answered “yes” or “no,” except that question 1) may be answered “no representation” by the seller.