Tax foreclosure laws vary so widely from state to state you really need to do your research. That said, a mineral lease would be the least of my concerns when acquiring a tax-foreclosed property. (And yes, I have purchased property at a tax foreclosure auction.) There are several reasons I wouldn't worry much about a lease: First off, any lease will have an expiration date. If you've had the property for, say, five years, I don't think you need to worry about someone showing up with a seismograph rig. And if the lessee did its homework, they would have seen tax liens on the property if they tried to lease it recently. Lastly, they may not be able to enforce their lease: Just as a tenant of a foreclosed landlord is likely to get evicted by the new owner, a company with leased mineral rights will probably have to go to court to enforce a lease on foreclosed property.
But there are a lot of things I WOULD be concerned about when buying foreclosed property. First off would be any liens or assessments not discharged by the tax foreclosure. IRS liens don't get discharged. Here in Michigan, assessments by local governments (e.g. water bills and sidewalk repair) are not discharged. I generally stay clear of condominiums because of past dues. Sure, any lien the condo association has placed on the property gets wiped out in the foreclosure, but you can be sure the association is going to do its best to collect those back dues one way or another.
With regards to mineral rights, I would check to see if the mineral rights have been severed from the property. If so, and if the owner of those rights has kept the taxes paid up, they will still have clear title to the mineral rights after the tax sale.
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Today's Featured Article - What Oil Should I Use? - by Francis Robinson. I keep seein this question pop up over and over again in discussion groups all over the web. As with many things there are often several right answers and a few wrong ones. Some purist I'm sure will disagree to no end with what I will tell you but most of us out here in the real world don't really care do we ? Some of them only bring their noses down out of the air long enough to look down them anyway. If you are like me you are only doing this old tractor stuff because you enjoy it. You
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