Question (CA): I am seriously considering purchasing acreage in Texas but the closer I get to making an offer, questions keep cropping up. I am interested in a 42 acre parcel with a 3/1 brick home, with agricultural exemption, presently in hay pasture and cattle. The property is seven miles outside of town and twenty miles from a major freeway. The asking price $300k.

The catch, however, is mineral rights. The property is presently under a gas lease with seller receiving royalties. Seller is willing to relinquish 5 percent of royalties with full price purchase. Buyer will have 100 percent control over surface land. Mineral leases are not common in CA hence the entire concept is over my head.

What would happen if someone, under said contract, decides to drill in my living room?

Do I have a say in the matter? What are the pros and cons of having a mineral lease? By the way, the seller just entered into a 3 year contract extension with the gas company. What if at the end of the three year lease I decide not to renew? Or do I have a say? Your input will be greatly appreciated. Please help! Thank you kindly. I'm Texas bound.

Answer: It appears from what you are saying that someone else owns the minerals rights. The buyer can only buy what the seller owns and is willing to convey to him. In Texas, the mineral rights are the dominant rights and the mineral owner has the right to drill, unless the property owner has surface control. If the property owner has surface control, the mineral owner has to drill somewhere else.

In short, the buyer's risk isn't all that great here since the buyer has surface control, but he doesn't get the benefit of being an oil baron.

Question (FL): I am a licensed Mortgage Broker in Florida. Is there a listing of states that shows which ones will permit me to obtain a mortgage broker license from them based on my Florida License? Thank you for your assistance.

Answer: To our knowledge, the answer is, "No." However, we suggest that you enter "States+Mortgage Broker License Reciprocity" (without the quotes) in your favorite search engine.

There are firms that provide courses to assist you in passing the various state tests required to obtain Mortgage Broker and/or Loan Officer Licensure required by the various states. One firm, thomas-law.com, provides a listing of the top 20 mortgage lending states and an "as of date" of the rankings.

Some states (e.g. Texas) require that a Mortgage Broker maintain a physical office (referred to as "brick-and-mortar states") while others (e.g. Florida), while requiring a physical office, do not require it to be kept within the state of licensure. Approximately 1/3 of the states are brick-and-mortar states, while the others are not.

Question (GA): I am purchasing a synthetic house. I like its floor plan. However, synthetic houses in Georgia nowadays are difficult to sell because of moisture and maintenance issues. Brick houses are much more popular.

My plan is to replace stucco siding with hardiplank and replace the front end with brick, for the sake of future sale. I have two questions:

1. Is it too risky to purchase a synthetic house given its difficulty in re-sale?

2. Will the replacement actually enhance my house re-sale value, or should I buy a brick house directly to save the hassle?

Answer: By "synthetic" house we assume you mean EIFS (pronounced "eye-fiss" which stands for Exterior Insulation Finishing System). EIFS is a type of synthetic stucco. EIFS, as an exterior finish, is not "bad" or "problematic" per se. It is the improper installation of EIFS that has earned it the bad reputation. You mention "hardiplank" as an alternative. It too is an artificial or "synthetic" exterior finish and it must be properly installed. For that matter, even bricks can be improperly installed as can brick-veneers. The key here is whatever the type of exterior finish, it must be installed properly by a contractor who has a reputation for proper installation.

To your question, if you can afford to replace the EIFS with properly installed hardiplank and the front end with brick, then the EIFS problem should be solved and resale should not be affected. However, the safest thing to do -- all other home features such as location and physical amenities being equal -- is to simply locate a floor plan in a home without EIFS that appeals to you as much or more than the synthetic stucco home.

Question (WA): After watching a documentary on houses in Colorado being used by renters as meth lab and then sold to unsuspecting buyers who are now exposed to the hazardous materials left by the renters, I would like to know how buyers can protect themselves against this type of property. It seems to me that sellers were not required to disclose that the property was used as a meth lab.

Answer: The State of Washington recently passed an Amended Seller's Disclosure Notice in 2007 (Passed by the Senate March 10, 2007, Passed by the House April 4, 2007, Approved by the Governor April 18, 2007 and Filed in the Office of the Secretary of State April 18, 2007), which contains specific questions regarding environmental issues addressed in Section 7. Environmental such as, without limitation, the following:

1. 7-E Are there any substances, materials, or products on the property that may be environmental concerns, such as asbestos, formaldehyde, radon gas, lead-based paint, fuel or chemical storage tanks, or contaminated soil or water?

2. 7-I Has the property been used as a legal or illegal dumping site?

3. 7-J has the property been used as an illegal drug manufacturing site?

Many states are passing or have already passed Seller Disclosure Notices that require disclosure of a residential property that has been used in the manufacture of an illegal drug such as, without limitation, methamphetamines. That is a first step, which is a good thing in our opinion.

However, this writer also believes that a seller who knowingly misrepresents, conceals and/or falsifies answers to questions such as the ones addressed in 7-E, 7-I, and 7-J above in the Washington Seller's Disclosure Notice, should also face criminal charges in addition to potential civil liability. It is a fact of life that meth labs flourish in our society based upon supply and demand. That being said, when we cannot deal with the supply-side effectively, then the sellers of the residential real estate used by the meth labs will have to share the responsibility for allowing the meth lab operators to rent the seller's property.

Published: July 24, 2007

Use of this article without permission is a violation of federal copyright laws.

George Stephens, CRB is the Broker of ERA Stephens Properties. He is licensed as a mortgage broker in Texas, and a real estate broker in Texas, Georgia, and Massachusetts. Charles J. Jacobus, JD is Board Certified by the Texas Board of Legal Specialization in Residential and Commercial Real Estate Law, and the author of Texas Real Estate Law, and Texas Real Estate, both published by Thomson Publishing. He also teaches at Champions School of Real Estate, Houston Community College, and is an adjunct professor at the University of Houston Law Center. To send us a question visit AskGeorge.net and click the "Ask A Question" button. The answers to questions in this column do not contain legal advice. George and Chuck are co-authors of Texas Real Estate Brokerage and Law of Agency, published by Thomson Publishing. If you wish to obtain legal advice, you should consult your own attorney.