CHAPTER 19 THE ART OF PREPARING THE LANDMAN ABSTRACT (A PRACTICAL GUIDE)
| Jurisdiction | United States |
(Sep 2007)
THE ART OF PREPARING THE LANDMAN ABSTRACT (A PRACTICAL GUIDE)
Attorney
Rothgerber, Johnson & Lyons LLP
Denver, Colorado
Bob received his undergraduate degree from Colorado State University in 1977 and obtained his J.D. in 1980 from Washburn University. He is currently a partner in the law firm of Rothgerber Johnson & Lyons LLP. Bob has represented oil and gas companies in a variety of matters, including acquisitions and other transactional matters, title work, curative work, due diligence, and administrative matters involving the Bureau of Land Management, Mineral Management Services, and the Colorado Oil and Gas Conservation Commission. He has extensive title examination experience, and was formerly employed as a landman by an independent oil and gas lease brokerage, as well as a title examiner for a Kansas title insurance company.
Bob is a member of the Rocky Mountain Mineral Law Foundation, American Association of Petroleum Landmen, Denver Association of Petroleum Landmen and has served as President of the Denver Association of Oil and Gas Title Lawyers. He is a member of the Douglas-Elbert County, Colorado and American Bar Associations and currently is an At-Large Council Member of the Executive Council of the Natural Resources & Energy Law Section of the Colorado Bar Association. He has written articles for the DAPL's Newsletter and other trade publications and has spoken to a number of organizations including the National Association of Lease and Title Analysts, the Denver Association of Division Order Analysts and the Denver Association of Petroleum Landmen on natural resources issues.
TABLE OF CONTENTS
Introduction
I. What the Attorney Needs to See in Order to Prepare a Title Opinion
II. Scope of the Examination of County, Federal and State Records
A. County Records
1. Tract Index and/or Grantor-Grantee Index
a) Exhibits to Instruments
b) Foreclosures
c) Tax Sales
d) Corporate Name Changes, Mergers and Successions
e) Powers of Attorney
f) Patents
g) Probate Records
h) Plat Books
i) Special Districts
j) Zoning and Subdivision Rules and Regulations
2. Judgment, Civil Action and Probate Indices
3. Miscellaneous Indices
4. Treasurer's Records
B. Federal Records
1. Master Title Plat (MT Plat)
2. Oil and Gas Plat (OG Plat)
3. Miscellaneous Plats
4. Survey Plats
5. Historical Index
6. Serial Register Pages (Oil and Gas Leases)
7. Serial Register Pages (Rights-of-Way)
8. Lease File
9. Mining Claims Geographical Index
10. Noncompetitive Leases
11. Competitive Leases
12. Patents
13. County Records
C. State Records
1. Mineral Tract Book
2. Surface Tract Book
3. Case Files
4. Patent Records
5. County Records
III. The Importance of Describing the Materials Examined
IV. Lessons Learned...Or How to Keep the Examining Attorney from Whining
1. Provide an Abstract Table of Contents
2. Organize the Abstract
3. Abstract of Common Instruments
4. Indexing Caveats
5. Date of Posting and Instruments Not Indexed
6. Multiple Counties
7. Comments Regarding Certain Instruments
a) UCC Records (Financing Statements)
b) Mortgages and Deeds of Trust
c) Release of Mortgages and Deeds of Trust
d) Powers of Attorney, Certificates of Corporate Name Change or Merger and Other Miscellaneous Instruments
e) Oil and Gas Leases
8. Type of Abstract
Conclusion
Appendix A - Forms of "Take-Off" Sheets
Appendix B - Federal Status Report Work Sheet
Appendix C - State Status Report Work Sheet
Appendix D - Sample Letter from Landman to Attorney
INTRODUCTION
Attorneys render opinions on title following examination of pertinent records related to the lands that are to be covered by the opinion. Attorneys examine title directly by performing a "standup" examination of records in the county clerk's office1 or appropriate federal or state land office or by working from an abstract. "An abstract is a compilation of all public records pertaining to the land under search: the sifting of records has been done by the abstracter, the pieces of the puzzle have been found and only their assembly remains."2
Traditionally, abstracts were prepared for a fee by professional abstracters, usually licensed or regulated by the state. The "horse blanket" abstract consisted of handwritten entries summarizing the instrument made by the abstracter on long strips of paper.3 "Bobtailed" abstracts were another form of early abstract. These abstracts were bound compilations of instruments on small sheets of paper, sometimes handwritten and sometimes typed, often a combination of both in the same volume.4 These instruments regularly included exact quotes of at least the pertinent portions of the instrument such as mineral reservations.
An improved version of the early bobtailed abstracts, sometimes called "skeleton" abstracts, consisted of summaries of the pertinent portions of instruments rather than a word-for-word compilation of the entire instrument. The accuracy of all of these abstracts depended on the ability of the abstracter to correctly summarize each instrument while not leaving out any important detail, such as an oil and gas reservation.
Over time abstracts have evolved into "verbatim" abstracts, which initially were typed versions of instruments exactly as they appeared in the county records, and then later compilations of photocopied instruments from the public records that also were provided by abstract or title companies and which are known as photocopied transcripts.5 In recent years, in the interest of economy and efficiency, oil and gas companies frequently ask landmen to compile these records and provide them to the examining attorney for the purpose of preparing a title opinion. This has led to numerous forms and a wide variety of compilations
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of instruments being provided to examining attorneys. Abstracts are regularly provided with only a portion of what an examining attorney would look at if performing a "stand-up" title examination of the pertinent county, state or federal records.
The primary purpose of this paper is to provide a practical guide for landmen to use when assembling a photocopied transcript of the chain of title. While instruments to be included in an abstract are listed and the reasons for their inclusion are discussed to varying degrees herein, a more detailed discussion of where the records can be found, what's online and how to gain access can be found in other papers presented at this institute. In addition, a discussion of specific title problems, substantive legal issues and issues of liability is beyond the scope of this paper.
Much of the information provided in this paper has been derived from papers presented by Philip Wm. Lear and Robert P. Hill at the 1982 Mineral Title Examination Institute6 and Gregory R. Danielson at the 1992 Mineral Title Examination Institute7 and from George J. Morgenthaler's excellent book on oil and gas title examination.8 The author has also drawn from the anecdotal experiences of several of his fellow title examiners and is especially grateful to Richard H. Bate, Esq., Gregory R. Danielson, Esq., Gary J. Younger, Esq., Mary Sellers, CPL, Rex H. Paullus, Jr., CPL and William G. Crews, CPL, for sharing some of their experiences and for their invaluable assistance in this effort.
I. What the Attorney Needs to See in Order to Prepare a Title Opinion.
The object of an abstract of title is to enable the examining attorney to determine the validity of title.9 When preparing a compilation of instruments for the purpose of providing a complete chain of title from which the attorney can examine title and render a title opinion it is important to be as thorough and to provide as much information as is possible. First of all, as the landman, who has been assigned the task of building the abstract, you are in the office of the county clerk, or the state or federal land office where the records are located and have access to those records while you are there. It makes sense to gather as many of the records as possible in order to avoid the time and expense of a return trip, as well as an explanation to your client about your need to revisit the exotic locales from which you just recently returned. Secondly, it is important to provide as complete a chain of title as possible so that when the attorney is examining that title chain there are few questions unanswered and few breaks in the chain. This ideally will result in fewer title curative requirements being set forth in the opinion and likely will lower the ultimate cost of the title examination process.
Accordingly, the task of providing a complete chain of title is a bit more formidable than it initially would seem. The landman must at times be a detective since the way records are indexed and organized likely will vary from county to county, courthouse to
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courthouse and even from one period of time to another. Depending upon the requirements of state law, counties in some states maintain tract indices and counties in other states maintain only grantor-grantee indices as the official indices.10 Others have separate indices for patents, warranty deeds, quit claim deeds, mortgages, mining claims, instruments affecting oil and gas, powers of attorney, trusts, corporate records and other types of instruments.
When examining the actual instruments, the landman will find that different counties have different ways of grouping documents, especially in the early chain of title. Many counties have books, which are segregated by types of instruments, and the landman may be faced with several books with the same number such as Book 5 of Patents, Book 5 of Deeds, Book 5 of Mortgages and Book 5 of Miscellaneous Instruments.11 The indices may not necessarily note the...
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