Texas Landowners Take The Wind Out Of Their Sales
Trey Murphy is a grad student in North Carolina, but he has dreams of owning land in West Texas. A few months ago, he was looking at real estate online and came across something strange.
“I saw that there was this particular listing that was selling the surface estate, but not willing to sell the wind estate,” he says.
Most people would have no idea what that means. But Murphy is originally from Texas, and, as luck would have it, he studies “energy geography.” He knows that in Texas, one tract of land can be owned in different ways by different people.
“It is very common to sever the surface estate from the mineral estate,” he says.
That means Person A can own the surface rights to land, allowing them to build on the property or raise crops, while Person B can own the subsurface or “mineral” rights to the property, allowing them to drill for oil.
“My intuition,” says Murphy, “is that people are just applying the same logic to the wind.”
He’s absolutely right. More and more land deals are being struck where the land rights are separated from the wind rights.
“I'm working on one right now,” says Ken Norris, a real estate agent, auctioneer and former county judge in Terrell County, West Texas.
People can make thousands of dollars a month in royalties from wind companies, he says, so they don’t always want to lose that option when they sell their land. But these kind of property deals are uncharted territory.
“We’re just learning about this,” Norris says. "I’ve even called the [Texas Real Estate Commission] and the [Texas] Association of Realtors and this is something kind of new to them also."
So, is it legal?
When it comes to property deeds “the only limitation is your imagination” says James Decker, a lawyer who owns a title agency in Stamford, Texas.
Thanks to a Texas law dealing with mineral rights and surface rights, he says, it's relatively easy to “separate” wind rights in land deeds.
“A lot of times [the deed] will say, ‘Seller reserves the oil and gas and minerals lying in, on or under the property,’” Decker says. “So by that same token I’ll say, 'Seller reserves the wind rights lying on or above the property.'"
"It’s basically just the same lingo applied to a different type of energy context,” he says.
That doesn’t mean there isn’t uncertainty over how wind rights really work.
For one thing, Decker says, mineral rights have always been considered dominant over surface rights in Texas. Where do wind rights fall on that spectrum? No one knows.
Murphy says a lot of conflict arises between surface and mineral rights owners in Texas. Now that there’s a new way of slicing and dicing properties in the state, we might expect even more of that.
“I would always encourage land owners to look at their deeds and to make sure they know what they’re buying when they’re buying it,” he says.
He says when he buys, he wants land with surface, mineral and wind rights intact.