Category Archives: Real Estate

Buying Arkansas Tax Titles

I get a lot of calls about quieting title for properties bought at tax sales in Arkansas. Before you call me, consider the following:

  1. Is the property you purchased subject to a property owner association with dues and assessments?  If so, you will get a bill as soon as you accept the Commissioner of State Lands’ deed to you.  For instance, Fairfield Bay in Van Buren County charges $75 a month in dues.  In a single year,  lot may accrue $900 in regular dues.  If the State has held the property for a few years, you will get a $3,000 bill.  That’s not an investment, it’s a liability.
  2. Tax sales do not extinguish mortgages and liens of record unless the Commissioner of State Lands gives proper notice.  Never buy a tax title without looking at the Commissioner’s notice.
  3. The County and Commissioner of State Lands will screw something up in the process which may void the sale.  In this case, you will have to occupy and pay taxes on the property for two years before being able to quiet title.
  4. The best deals are typically snatched up by investors in very competitive auctions.   There are many, many people who buy tax titles professionally.  A few are lawyers.  They know which properties are the best deal and have the best chance of success.  They will make you pay for a quality title.
  5. The best deals also tend to be properties where the owner died and lives out of state or had no close family.   This creates problems.  If you wish for me to quiet title for you right away, I will have to identify and serve the heirs of that person.  See number 3.  The heirs will likely fight it out if the property is worth anything and will probably win.  Thus, there is no quick money to be made.  It will be two years before you can get a valid quiet title.

If you reviewed this and think you have a property worth litigating, call me.

Types of Deeds in Arkansas

There are broadly, five types of deeds in Arkansas:

  1.  Warranty Deed:  The Cadillac of deeds.  This property transfers all title with a covenant of warranty.  The warranty assures the buyer that the person giving title (grantor) has full title free of flaws and claims by other people.  If there are other claims or flaws, the grantor may be sued for breach of warranty.  The warranty will also transfer any title acquired by the grantor after the conveyance.
  2. Special or Limited Warranty Deed:  With this type of deed, it is hard to understand what the grantor is really giving.  Typically, the warranty is for “acts done and suffered by the grantor and no other.”  What does that mean?  It means that if the problem with the title did not arise during the grantor’s tenure of ownership, the grantor is off the hook.
  3. Quitclaim Deed:  A quick and dirty conveyance of the property.  This is the 1970 Volkswagon Beetle of deeds.  It transfers only what the grantor owns right then and there and nothing in the future.  The quitclaim deed offers no protection to the purchaser.  It is title given caveat emptor “as is, where is.”
  4. Fiduciary Deed:  A deed given by a court-appointed fiduciary.  This usually happens with a guardian, executor, receiver, or administrator.  It may or may not include a warranty. Usually, it includes only the “right title and interest” of the person whom the fiduciary represents.  E.g. “all right, title and interest of the Estate of John Smith, deceased in the property.”  The phrase “right, title and interest” do not carry a warranty.  Fiduciary deeds must usually be authorized by the Court.
  5. Beneficiary Deed:  A statutorily authorized “pay on death deed.”  It transfers no present interest in the property, but becomes an irrevocable transfer upon death.  This is a great estate-planning tool for non-residents of Arkansas because it avoids probate.

How to Transfer Property in Arkansas

If you’ve come into some property in Arkansas or perhaps you have a loved one who wants to gift some Arkansas property to you, you must obtain a deed to that property.  There are many Arkansas deed forms on the internet, but as my father (a physician in practice for over 50 years) told his patients when they’d contradict his advice with something they read on the internet:  “Just try to sue Dr. Internet when that course of treatment makes you sicker.”  If you find an Arkansas deed from out there on the net, most likely, the deed form will not fit your particular needs and will make your situation worse.   What deed will work for your situation?  It depends and that, frankly, is why you should consult an Arkansas lawyer.  Most deeds cost less than $300 to prepare.  A professionally prepared deed can save thousands down the road.

Take for instance a situation I once noted in an oil and gas title opinion I rendered.  We’ll protect the innocent by calling them the “X” family.  (I never represented them, but I will still respect their privacy).  Back in 1965, Grandpa X wanted to give his grandson Mr. X a piece of the family farm.  Grandpa deeded 40 acres of the farm to Mr. X and his new bride Mrs. X.  The farm was in the X family for generations.  It was the patrimony of Mr. X, his uncles, aunts, and cousins.  There were no outsiders in the farm.  So they thought, at least.

Fast forward 15 years later.  Mr. and Mrs. X divorced in their hometown in County A.  The X family farm is in County B.  The lawyer handling the divorce knew nothing about the farm property.  It never dawned on Mr. X to even think about the farm as anything but belonging to the X family, and to Mr. X, Mrs. X was out of that family due to divorce.  The property was never mentioned in Mr. and Mrs. X’s divorce decree.

Twenty years later, Mr.  X had gone on to glory.  Eight years after that, gas was discovered on the X family farm. Nothing in the real estate records revealed the death of Mr. X, so this darn pesky oil and gas title examiner (me) started asking questions.  The divorce decree came up and the death did too.

The family did not take the news well.  The original deed created a survivorship estate in the young couple.  That is, when “death do us part” happened, the survivor of the marriage got the property.  When they divorced, however, and the decree did not mention the property, an obscure statute kicked in which turned the survivorship estate into a tenancy in common (that is, one half each absolutely).    The result was that the entire X family wound up with an unwanted partner in their farm and gas wells–the former Mrs. X.

Grandpa messed up the deed to his grandson by doing it himself.  If he’d have had counsel, the lawyer would have asked questions about the property and explained the ramifications of including Mrs. X on that deed.   But now, a total stranger to the family has just as much right to occupy the X family farm as they do.

The tl;dr of this post–pay a lawyer to draw up your deeds.  You might be clever, but I assure you that you’re not clever at everything.

 

How to transfer land without a will in Arkansas.

Do you have only a tract of land in Arkansas?  If you live in another state and have a vacation home, rental property, timber land, or mineral interest in Arkansas, you may leave your family with a burden if you utilize a will to transfer title at your death.

Merely filing a will in the County real estate records in Arkansas is not enough.  The law will require your heirs to admit your will to probate.  The average probate costs around $2000.

There is a very low cost alternative to probate.  Act 1918 of 2005 allows beneficiary deeds.  This makes your Arkansas land or Arkansas mineral interest transfer ownership just like a pay on death bank account.  The best part is that it is very flexible and low cost.  The beneficiary of your land at your death can be a trust, company, person, or a charity.

Contact Law Offices of Mark Robinette to learn more.

In what Arkansas Counties can you utilize a beneficiary deed?  All 72, of course!  This includes Arkansas County, Ashley County, Baxter County, Benton County, Boone County, Bradley County, Calhoun County, Carroll County, Chicot County, Clark County, Clay County, Cleburne County, Cleveland County, Columbia County, Conway County, Craighead County, Crawford County, Crittenden County, Cross County, Dallas County, Desha County, Drew County, Faulkner County, Franklin County, Fulton County, Garland County, Grant County, Greene County, Hempstead County, Hot Spring County, Howard County, Independence  County, Izard County, Jackson County, Jefferson County, Johnson County, Lafayette County, Lawrence County, Lee County, Lincoln County, Little River County, Logan County, Lonoke County, Madison County, Marion County, Miller County, Mississippi County, Monroe County, Montgomery County, Nevada County, Newton County, Ouachita County, Perry County, Phillips County, Pike County, Poinsett County, Polk County, Pope County, Prairie County, Pulaski County, Randolph County, Saline County, Scott County, Searcy County, Sebastian County, Sevier County, Sharp County, St. Francis County, Stone County, Union County, Van Buren County, Washington County, White County, Woodruff County, Yell County

Landowners Prevail in Cleburne County Arkansas Mineral Rights Litigation But Damages Lacking

Cleburne County landowners Bruce and Jan Smith won on appeal in the case of Smith v. Mountain Pine Timber, Inc., 2016 Ark. App. 193.  In this case, Mountain Pine timber previously sold the minerals to land later sold to the Smiths.  Mountain Pine then sold the land to the Smiths with full warranty of title and with no mineral reservation.

Under Arkansas law, a warranty of title is actionable as a breach of contract.   The statute of limitations does not begin to run until a third party disturbs the purchaser’s rights to possession of the property.  This is particularly important feature of the law when it comes to minerals.  Minerals are not possessed until produced.  Many years can pass before the requisite mineral development and production takes place.

In the Smith case, they purchased the land from Mountain Pine Timber in 1987.  It was not until 2008, when the Smiths were approached to sell their mineral rights that the Smiths discovered that Mountain Pine previously sold the Cleburne County mineral rights.

Another point of black letter law in Arkansas is that the damages for breach of warranty of title are “so much of the consideration paid as is proportioned to the value of the land lost, with interest.”  Furthermore, the damages cannot exceed the total value of the purchase price.  The Court of Appeals therefore reasoned that the property point in time to fix damages was the time of the conveyance.  In this case, that was the 1987 conveyance to the Smiths from Mountain Pine.  The Smith trial court awarded only $250.22 in damages or $1/acre.

Notably, the only evidence offered on the value of the Cleburne County mineral rights in 1987 was from one of the Defendants who testified that the mineral rights were sold by Mountain Pine for $1 per acre in 1985.  This underscores the importance of offering expert testimony of damages.  Most likely, the actual value of the Cleburne County mineral rights was much higher than the $1 per acre awarded by the trial court, and the low damages award was the result of insufficient testimony by the Plaintiffs.   I’ve seen numerous mineral deeds in the Cleburne County records prior to the Fayetteville Shale discovery that easily exceeded $1 per acre.

Justice, however, was in some manner served for the loss suffered by the Smiths.  In a companion appeal of Mountain Pine Timber v. Smith, 2016 Ark. App. 197, the Court of Appeals upheld an award of attorney’s fees in the same case.  Arkansas law allows attorney’s fees to the prevailing party in a contract action (which a deed covenant is) provided the fees are reasonable.  The court awarded $17,500 in attorney’s fees.  The Appeals Court concluded the award of attorney’s fees was not excessive.

Eviction in Arkansas: What happens to personal property left behind?

The story:  A tenant renting an office did not have enough sense to move out quietly in the dead of night or over a long weekend after not paying the rent for months.  The tenant held out intransigently because it had either nowhere else to go or nowhere else to put its stuff.  The court gave an order with a writ of possession.  The sheriff accompanied the landlord to the property, the tenant wasn’t there, and the locksmith changed the locks.  To the landlord’s surprise, the office is full of furniture, decor, and books.   The tenant owes $3,000 in back rent and $1,000 in court costs and attorney’s fees.  What should the landlord do with this bonanza of business property?

Under Ark. Code Ann. 18-16-108, “[u]pon the voluntary or involuntary termination of any lease agreement, all property left in and about the premises by the lessee shall be considered abandoned and may be disposed of by the lessor as the lessor shall see fit without recourse by the lessee.”   This statute was upheld in Omni Holding and Development Court v. C.A.G. Investments, Inc., 370 Ark. 220, 258 S.W.3d 374 (2007).  In this case, the court ruled that upon the issuance of the writ of possession, the property became abandoned.  This means that the tenant has only until the judgment (or if an appeal is taken any time during the staying of the judgment) to remove property on the premises.   After that, it’s too late.

The hypothetical landlord sells the office furniture, book, and decor to a new tenant for $1500.  If our hypothetical tenant owes a $4,000 judgment, then what, if any, affect does the landlord’s sale have on the judgment???

Tough question.  Part (b) of 18-16-108 states that “[a]ll property placed on the premises by the tenant or lessee is subject to a lien in favor of the lessor for the payment of all sums agreed to be paid by the lessee”  Did the General Assembly intend that part a of the statute (abandonment)  work in concert with part (b) (lien)?  I could argue either way.  My argument that the landlord has no duty to utilize the proceeds of the sale is that part a uses “abandoned” as the property’s status and the landlord can dispose of the property “without recourse.”  The legal term of art “abandoned” at common law means that one finding property becomes the owner.   Thus, by using this term of art, the General Assembly meant that the Landlord is literally the owner of the property.  The “without recourse” provision redoubles this interpretation.

On the other hand, I can argue part (b) should read with part (a) because there is nothing in the remainder of the Arkansas Code that tells the would be lien holder landlord how to foreclose upon the lien created.  I suppose that the argument is that part (a) and part (b) together create a type of bailor-bailee relationship.  This would allow the landlord to make a commercially reasonable sale.

The stronger argument is the first.  To impute a bailor-bailee relationship such as a pledge is to impute the commercially reasonable sale requirement.  How can the requirement for a commercially reasonable sale exist when the statute specifies that the disposal of the property is “without recourse?”  A court could get there, but it will require legal gymnastics to get there.

I think this question is an academic one that may never be answered by the courts.  Practically, no person with any common sense will leave anything valuable on the premises.  They might leave a liability (like some junk), but nothing that will bear fruit for the repossessing landlord. In the rare cases they do, the value of the property pales in comparison to the judgment for back rent and the landlord doesn’t want to spend money to collect the judgment, so any serious consideration of whether to credit the judgment never occurs.  The landlord just takes or sells the property and leaves the judgment standing until it dies 10 years hence.

Thanks for reading.  Don’t take anything above as legal advice.  Every situation is different and there subtleties that I didn’t address, so what you’ve read is very, very general and generic and may not apply to your situation.  If you have the need for representation, give me a call at 501-251-1076.  I accept landlord tenant cases including evictions in the Central Arkansas area including, Pulaski County, Lonoke County, Saline County, Faulkner County, and Perry County.  This includes the Little Rock, North Little Rock, Bryant, Benton, Conway, Mayflower, Perryville, Lonoke, Sherwood, Jacksonville, and Cabot metropolitan areas.  In general, I don’t represent tenants that are individuals unless there’s a serious problem with the premises or the landlord’s behavior. With businesses tenants, I will take tenant work on a case by case basis.  Landlords are almost always welcome. Call me at 501-251-1076.

Van Buren County, Arkansas surface owners win partial victory over mineral owners on bad legal description.

In XTO v. Thacker, 2015 Ark. App. 203, a Van Buren County, Arkansas trial court ruled that a mineral deed with an extra handwritten description “also the South quarter of the Northeast quarter” invalid as surplusage.  In legal language, “surplusage” is just extra language that means nothing.    Surplusage is language that is unintelligible and repugnant to the matter at hand.  In this case, there was a typewritten legal description of 118 acres with a handwritten notation including “the South quarter of the Northeast quarter.”

When affirming the Van Buren County, Arkansas trial court’s ruling on the legal description in the deed, the Arkansas Court of Appeals noted that someone made the notation on the deed after the date of recording.  Thus, the land description attempted was not in the original parties’ bargain and the language placed in the deed after the recording date was surplusage.

Drafting is very important in any deed, but especially important in Arkansas mineral deeds.  Accurate legal descriptions are among the most important parts of a mineral deed.  It pays to have your Arkansas mineral deed lawyer to perform some title work to obtain the correct legal descriptions when giving an Arkansas mineral deed.  This may make the deed cost more, but it saves down the road when others may choose to scrutinize the title conveyed by the deed because the property has valuable oil and gas production and royalties.  It is also crucial that when granting Arkansas mineral interests title is clear and of record.   This too becomes an issue years later when there is real money at stake that makes the extra paid to a competent mineral deed lawyer a bargain in comparison to future litigation costs.

Mark Robinette is an Arkansas lawyer and attorney providing Arkansas mineral deeds and supporting Arkansas title work in all 72 Arkansas counties including the Fayetteville Shale counties of White County, Cleburne County, Van Buren County, Faulkner County, Conway County, and Pope County.   Arkansas lawyer Mark Robinette also represents persons in the South Arkansas oil patch including Nevada County, Ouachita County, Miller County, Lafayette County, Columbia County, Union County, and Calhoun County.

Van Buren County, Arkansas surface owners lose appeal on 1984 mineral quiet title order

In XTO v. Thacker, 2015 Ark. App. 203, some Van Buren County, Arkansas surface owners filed a quiet title suit in 1984 naming one of two original 1929 Van Buren County mineral deed grantees as defendants.  In the 1984 Arkansas quiet title suit, the surface owners alleged that the grantor of the mineral deed was not the record owner of the property and that the mineral deed was therefore invalid.

In usual fashion, the surface owner’s quiet title suit attorney filed an affidavit reciting that whereabouts of the named Arkansas mineral owner defendant was unknown after making a “diligent inquiry.”  The affidavit did not detail the efforts of the lawyer’s efforts to locate the mineral owner.   The clerk issued a warning order based on the affidavit, and the warning order ran in the local paper for four weeks.

Of course, the mineral owner defendant did not appear to answer the Arkansas mineral quiet title complaint.  The court entered an order quieting title in the surface owner defendants.  In 2010, after the development of the Fayetteville Shale in Van Buren County, Arkansas, the absent Van Buren County, Arkansas mineral owner learned of the 1984 quiet title decree and sought to set aside the court’s order of 26 years earlier.

At trial, the mineral owners and their production company lessee (XTO) lost.  The trial court ruled that the plaintiffs in the 1984 case complied with the rules governing notice in quiet title suits that were in effect at the time.

The Arkansas Court of Appeals reversed the trial court’s order finding that the plaintiffs properly served the absent mineral owner.  Specifically, the rules in effect at the time of the 1984 required a recitation of the efforts employed to locate the missing mineral owner.  In this case, the affidavit merely recited that the absent mineral owner was not found after “diligent inquiry.”

In addition, the Arkansas Court of Appeals found that the 1984 case did not employ every method of notice required.  A newspaper warning order in a civil suit is a general requirement.  In an Arkansas quiet title lawsuit, there is a specific statutory requirement found in Ark. Code Ann. 18-60-503.  The statute requires a specific type of newspaper notice to run for four weeks with due proof of publication filed in the case.  This was absent in the 1984 quiet title suit.

When pursuing a quiet title lawsuit in Arkansas, it is vitally important to follow rules governing notice in the Arkansas Rules of Civil Procedure to the letter.  In addition, a plaintiff must follow the statutes governing Arkansas quiet title suits in general found in the Arkansas Property Code (Title 18).  When choosing an Arkansas quiet title lawyer for mineral interests or surface interests, make sure the quiet title attorney has knowledge of all the relevant statutes and does a thorough job of locating and identifying possible defendants.

Mark Robinette is an Arkansas lawyer and attorney providing quiet title suit services in all 72 Arkansas counties including the Fayetteville Shale counties of White County, Cleburne County, Van Buren County, Faulkner County, Conway County, and Pope County.   Arkansas lawyer Mark Robinette also represents persons with quiet title suits in the South Arkansas oil patch including Nevada County, Ouachita County, Miller County, Lafayette County, Columbia County, Union County, and Calhoun County.

Mineral Rights in Brine: A right peculiar to Union County, Arkansas and Columbia County, Arkansas

Brine, or salt water, seems common enough. After all, the 70% of the Earth are oceans, so why in the world would anyone drill a well on dry land to recover saltwater?  The answer is that not all salt water is created equal.  Salt from sea water is of fairly consistent composition.  It is mainly sodium chloride, potassium chloride, and various trace elements.  By contrast, the salt water taken from beneath Union and Columbia County, Arkansas has a high concentration of bromine.   It is 70 times greater than that of sea water.  The salt water in Union County and Columbia County, Arkansas yields about one half of a gram of bromine for every 1000 barrels of brine.  This doesn’t seem like much, but it is commercially significant.  So much so, that Arkansas leads the world in bromine production.

Bromine compounds are useful as a flame retardants in furniture, medicines, insect and fungus sprays, anti-knock compounds for leaded gasoline, disinfectants, photographic preparations and chemicals, solvents, water-treatment compounds, dyes, insulating foam, hair-care products, and oil well–drilling fluids.

A unique rule of property in Arkansas caused many of the landowners who missed out on the oil and gas boom of the 20’s and 30’s to cash in on the Bromine boom of the late 1950’s.  Under the Strohacker doctrine, surface owners whose oil and gas rights were sold off in the oil boom were pleasantly surprised to learn they owned full brine rights.  Under Strohacker, a conveyance or reservation of “minerals” only includes those minerals known to exist in the mind of the public at the time and locality of the conveyance.   Thus, all the early mineral deeds in Union and Columbia County did not apply to Bromine because the mineral was unknown to the public until the 1950’s.

There are two major bromine producers in Arkansas:  Great Lakes Chemical and Albemarle Corporation.  Great Lakes Chemical has Arkansas headquarters in El Dorado, Arkansas.  Albemarle has Arkansas headquarters in Magnolia, Arkansas.  These companies handle royalty payments for brine mineral rights holders.  Just like oil and gas production companies, brine companies have a land department that manages royalty payments and royalty ownership changes.  The Arkansas Oil and Gas Commission regulates brine production in Arkansas.

If you own brine mineral rights in Union County, Arkansas or Columbia County, Arkansas, Law Offices of Mark Robinette can provide many services to you including:

  • Brine Rights Mineral Deeds
  • Affidavits of Heirship in Brine Rights
  • Probates of wills to establish claims to Brine Rights
  • Ancillary Probate of wills to establish claims to Brine Rights
  • Affidavits of small estates to establish claims to Brine Rights
  • Redemption of Tax Forfeited Brine Rights
  • Transfer of Brine Right ownership with Great Lakes Chemical and Albemarle Corporation
  • Surface use agreements and damage settlements with brine pipeline companies
  • Surface contamination claims from brine production activity
  • Ground water contamination claims from brine production activity
  • Complaints to the Arkansas Oil and Gas Commission regarding brine unitization or production

Mark Robinette’s principal office is in Little Rock, Arkansas, but he routinely handles matters in Union County Arkansas and Columbia County Arkansas.  Deeds, probates, affidavits of small estates, tax forfeitures redemptions, Oil and Gas Commission complaints, and most surface use agreements involve no travel costs from Little Rock to Union County, Arkansas or Columbia County, Arkansas as these are routinely handled by regular mail or email.  You can put Mark Robinette’s years of oil, gas, and mineral experience to work for you without worrying about costs.  Many routine ownership transfer matters are done on flat, turn key pricing.  Call Mark Robinette today at 501-251-1076, email him at info@robinettefirm.com, or click one of the response button in the right frame of this website. Mark is looking forward to hearing from you!   Mark Robinette is licensed in Arkansas. Mark Robinette is a Arkansas oil, gas, and mineral lawyer and attorney who can help you with your Columbia County, Arkansas and Union County, Arkansas brine rights.

Want to learn more about bromine brine?  Try exploring these links:

http://www.geology.ar.gov/energy/brine_resources.htm

http://www.aogc.state.ar.us/

http://www.encyclopediaofarkansas.net/encyclopedia/entry-detail.aspx?entryID=4514

http://www.greatlakes.com/About_Us/Community_Relations_&_Support/El_Dorado,_Arkansas

http://www.albemarle.com/Magnolia-Arkansas-57C247.html