Title Opinion
A written legal opinion on the ownership of land or minerals, based on the record, that identifies the owners, the exceptions and defects found, and the steps needed to cure them.
Detailed Definition
A title opinion is a written legal opinion on who owns land or an interest in it, based on the records, together with the defects and exceptions found and the steps needed to correct them. Its conclusions rest on the chain of title and the documents assembled in the runsheet or abstract (see Chain of Title, Runsheet, and Abstract of Title).
What a title opinion covers: a federal rule as an example
No single federal or state source read for this entry defines "title opinion" for oil and gas purposes. A federal rule for Rural Housing Service loans (7 CFR 1927.55(d)) describes what the work behind a title opinion must determine. The searches must cover "all relevant land title and other records, so as to express an opinion as to the title of the property and the steps necessary to obtain the appropriate title." The closing agent or approved attorney "will determine," among other things:
- "The legal description and all owners of the real property";
- "Whether there are any exceptions affecting the property," including their "nature and effect";
- outstanding tax claims and liens;
- outstanding "judgments of record, bankruptcy, insolvency, divorce, or probate proceedings";
- "What measures are required for preparing, obtaining, or approving curative material, conveyances, and security instruments."
In that program the opinion is provided by an approved attorney, defined in 7 CFR 1927.52 as "A duly licensed attorney, approved by the agency, who provides title opinions."
Title opinions in oil and gas payments: Texas
Texas law recognizes title opinion requirements in the payment of production proceeds. Under Tex. Nat. Res. Code 91.402(b)(1)(C), a payor may withhold payments without interest where there is "a requirement in a title opinion that places in issue the title, identity, or whereabouts of the payee and that has not been satisfied by the payee after a reasonable request for curative information has been made by the payor." The division order itself includes the payee's "certification of title to the share of production claimed" (91.402(c)(1)(C)).
What government approvals do not do
Filings with a federal agency are not a substitute for an opinion on title. BLM's rule on lease transfers states: "The BLM approves assignments and transfers for administrative purposes only. Approval does not warrant or certify that either party to a transfer holds legal or equitable title to a lease" (43 CFR 3106.71). Lessors may also disclaim title. The Utah SITLA lease form says "Lessor does not warrant title nor represent that no one will dispute the title asserted by Lessor."
Why it matters in mineral title research
- The opinion is only as complete as the record behind it. Research that assembles every instrument, federal case file, and court record for the tract is what the opinion relies on.
- Each requirement in the opinion names something specific to obtain or record, which becomes the curative list (see Curative).
- An opinion speaks as of a date and covers stated lands and depths. Later instruments and any excluded depths are outside it.
Related Terms
Mineral Title
Ownership of the minerals in a tract of land, which may be held together with the surface or severed from it and owned by someone else, including the United States.
Chain of Title
The series of conveyances affecting a tract, arranged in order from the government or other original source of title down to the present holder.
Division Order
An instrument signed by an owner that states the owner's interest in production from a property and directs the payor to distribute the proceeds accordingly.
Curative
The work of correcting defects and gaps in title identified in a title opinion or title report, by obtaining and recording documents, filings, or court orders.
Abstract of Title
A condensed history of the title to land, summarizing every conveyance affecting it together with the liens, charges, and liabilities to which it may be subject.
Runsheet
A landman's working list of the recorded instruments affecting a tract, prepared from courthouse and other title sources as the foundation for an abstract and a title opinion.