Title Research & Due Diligence Flashcards

When examining a mineral deed that contains a 'subject to' clause referencing a prior lease, a title examiner should primarily determine:

Answer: Whether the lease has terminated or is still in force

The examiner must determine whether the referenced lease has terminated because a live lease encumbers the mineral estate and affects the bundle of rights being conveyed.

Which of the following best describes a 'non-participating royalty interest' (NPRI)?

Answer: A royalty carved from the mineral estate that does not share in lease bonuses, rentals, or executive rights

An NPRI is carved from the mineral estate and entitles the owner to a fraction of production or its value but does not include the right to bonus, rentals, or the power to execute leases.

In a title opinion, a 'curative' requirement typically means:

Answer: Specific documents or actions must be obtained to remove a title defect before closing

Curative requirements identify defects in the title chain that must be remedied—such as obtaining missing probate documents, correcting acknowledgments, or recording missing conveyances—before the title is acceptable.

Which doctrine allows a court to reform a deed that, due to a mutual mistake, does not reflect the parties' true agreement?

Answer: Equitable reformation

Equitable reformation allows a court to correct a written instrument that, due to mutual mistake or fraud, does not accurately express the parties' actual agreement.

A title examiner discovers a gap in the chain of title where a grantor's name differs slightly between documents. The BEST immediate step is to:

Answer: Search for an affidavit of identity or other evidence that both names refer to the same person

Minor name variations are often explained by an affidavit of identity or supporting records such as marriage certificates, which can cure the apparent gap without litigation.

The 'executive right' in a mineral estate refers to:

Answer: The right to lease the mineral estate and negotiate lease terms

The executive right is the power to execute oil and gas leases and bind all co-owners of the mineral estate to the terms negotiated; it can be separated from other mineral rights.

Under the 'cy-pres' doctrine as applied in some states to charitable or institutional mineral grants, the primary effect on title research is:

Answer: Courts may modify the original grant terms to meet changed circumstances rather than allowing the grant to fail

Cy-pres allows courts to modify the terms of a charitable gift or institutional grant so it can continue to serve its original purpose when literal compliance is impossible, affecting how such grants are interpreted in title research.