Bulletin: TX2009007

Dear Associates:

We have been receiving many questions on the oil and gas endorsements and rules that go into effect November 1, 2009.  Accordingly, we have posted a set of questions received and our answers on stewarttexas.com.

One question which requires special attention concerns lands subject to leases for coal, lignite, uranium and similar materials.  The question and our response are reproduced in this bulletin.

Do you consider coal and uranium leases to be in a different category than oil and gas leases?   Are you really willing for those leases to be excepted to (or not excepted to) in conjunction with the P-5.1 general exception, resulting in a possible mandatory T-19.2 or T-19.3 insuring against destruction of a present or future house by open-pit mining?   Yes such leases are different and we will not give the option of T-19.2 or T-19.3 in such cases.  Especially if there actually are such leases outstanding (which should be in the last 30-40 years) and definitely would not give such coverage on acreage property, since the existence of such lease could lead to destruction of improvements.  So unless there was some limit on surface use in the lease, or unless we had good evidence that the lease had terminated, we would decline to give T-19.2 or T-19.3 coverage. We would also decline to provide coverage in a T-19 or T-19.1 where there are such leases, since coal and lignite can be a mineral depending on the facts (whether near surface). 

If you have questions related to this bulletin, please contact your local underwriting personnel or Stewart Legal Services.     

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