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Given the time period a mineral title opinion encompasses, it is almost inevitable that there will be at least one instance of a mineral owner vanishing from the records. A likely explanation is the owner’s death, but the absence of an explanation creates a host of issues that stem from the uncertainty of ownership.
Before beginning this discussion, some context is necessary. The issues raised in this series will be presented in a title opinion, which has a purpose and limitations.
A title opinion’s purpose depends on the nature of the transaction. If the intent is to acquire title to a tract, the title opinion recommends what should be done to acquire marketable title. If the intent is to develop the minerals, the title opinion recommends what should be done to establish defensible title. Generally, marketable title is a higher standard than defensible title and is based on legal standards, while defensible title is based on business interest and risk tolerance where the goal is to avoid accusations of intentional, or bad faith, trespass.
In the context of the varied issues that arise when a mineral owner vanishes from public records and different approaches to address those problems, we will endeavor to differentiate between what is recommended for marketable title and what is recommended for defensible title.
A title opinion is always subject to certain limitations because it is only an opinion. Whether based on an abstract or on a stand-up title examination, even if the title opinion sets forth ownership of a tract, it does so subject to:
When is it safe to assume someone is dead?
So you have an abstract or an opinion, and the flowchart and/or statement of ownership includes “the heirs, successors and assigns of…,” or you notice that an owner has had no activity for years. In this situation, you have to assume that the abstractor or title attorney has conducted what is considered a thorough search to determine if the interest owner is deceased.
When is it safe to assume that he or she is dead?
The first option is to establish, based on common sense and as a result of risk management, a date in the past that, if no activity has since occurred, is a valid basis for assuming that the person is deceased. This option is not recommended under any circumstance because it generally creates more questions than it resolves. For example, if a person is assumed to be dead because they have no recorded activity in the last 35 years, this assumption does nothing to identify their heirs. From a business standpoint, this option is a good first step because it reduces the cost of abstracting, but it should only be the first step in the process of identifying the current owners.
The Second option is a search of familysearch.org, ancestry.com, findagrave.com and other sites that all have remarkable amounts of information. While you should not assume they are completely accurate, the sites provide enough information to justify further investigation. Before investigating further, gather as much extrinsic information as possible, starting with full names, date and location of birth, spouses and children’s names, and last known address. Once you have sufficient cause to believe that a person has in fact died, it is important to determine where they died to determine if any administration of their estate has taken place. This is recommended if you seek to establish defensible title.
“Skip tracers” may be employed to answer many of these questions. If costs are of concern due to market downturn, you may consider which tasks can be done in house and which should be outsourced.
The safer option, and the one to pursue if you seek marketable title, is to have a court answer the question for you. Generally, a person who is absent from their place of residence for seven years (five years in Ohio) and unheard from by people whom they routinely contacted is presumed to be dead. If the individual was exposed to peril that endangered his or her life when their absence began, the time of their absence before the presumption of death arises may be reduced.
In every situation there must be a court proceeding to declare the person dead. Applicable laws of states in the Marcellus/Utica Shale and the Illinois Basin are as follows:
Chapter 57, Title 20
Chapter 44, Article 9
KRS 422.130, 132 and 135
IC 29-2-5-1; 32-30-3-18, 19
755 ILCS 5/6-20; 5/10-2, 3
*May be used for non-residents who own real estate interests within state
**Does not differentiate between resident and non-residents if absence is preceded by a “catastrophic event”
Death is inevitable and also the most likely explanation why an interest owner vanishes from public records. That does not mean it is always the correct answer. When confronted with a vanished interest owner, the first step is to verify if they died. If they have, and you can determine where, you will have the information needed to determine what effect their death has on the title.