H.B. No. 3838
AN ACT
relating to a disclosure in certain offers to purchase a mineral or
royalty interest.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter F, Chapter 5, Property Code, is
amended by adding Section 5.152 to read as follows:
Sec. 5.152. CERTAIN PURCHASES OF MINERAL OR ROYALTY
INTERESTS VOID. (a) This section applies only to the conveyance of
a mineral or royalty interest by an instrument that:
(1) is presented to the owner of the interest by the
person acquiring the interest;
(2) is titled an oil and gas lease or an oil and gas
royalty lease or has other words in the caption or other prominently
displayed label that indicate that the transaction is a lease of a
mineral or royalty interest; and
(3) has the effect of conveying, permanently or for a
term, all or a portion of the owner's:
(A) mineral interest in lands covered by an
existing oil, gas, or mineral lease; or
(B) royalty interest in production from an
existing oil, gas, or mineral lease.
(b) This section does not apply to a conveyance of a mineral
or royalty interest by an instrument that:
(1) is an oil, gas, or mineral lease;
(2) conveys a mineral or royalty interest for a term;
and
(3) provides that the interest conveyed vests in
possession after the expiration or termination of all or a portion
of the interest conveyed by an existing oil, gas, or mineral lease
in effect at the time of the execution of the instrument, commonly
referred to as a top lease.
(c) A conveyance instrument described by Subsection (a)
must include:
(1) a conspicuous statement printed at the top of the
first page of the instrument below the caption, if any, in an
approximate type size of at least 14 points and in substantially the
following form:
THIS IS NOT AN OIL AND GAS LEASE. YOU ARE SELLING ALL OR A PORTION OF
YOUR MINERAL OR ROYALTY INTERESTS IN (DESCRIPTION OF PROPERTY BEING
CONVEYED).
; and
(2) a conspicuous statement printed at the top of each
subsequent page of the instrument and immediately above the
signature of the person conveying the interest in an approximate
type size of at least 14 points and in substantially the following
form:
THIS IS NOT AN OIL AND GAS LEASE. YOU ARE SELLING ALL OR A PORTION OF
YOUR MINERAL OR ROYALTY INTERESTS.
(d) If the conveyance instrument does not include the
statements required by Subsection (c), the conveyance is void.
(e) A person who has conveyed a royalty or mineral interest
in a conveyance that is void under this section may bring suit
against the purchaser of the interest to remove the conveyance as a
cloud on title and may recover from the purchaser:
(1) all royalties and bonuses paid to the purchaser
and any successor or assign of the purchaser;
(2) court costs; and
(3) reasonable attorney's fees.
(f) The remedies under this section are in addition to any
other rights or remedies a person may have at law or pursuant to
contract.
SECTION 2. The change in law made by this Act applies only
to an agreement entered into on or after the effective date of this
Act. An agreement entered into before the effective date of this
Act is governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 3. This Act takes effect September 1, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3838 was passed by the House on May 3,
2019, by the following vote: Yeas 138, Nays 5, 1 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3838 was passed by the Senate on May
22, 2019, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor