Texas Supreme Court Confirms: Severed Mineral Rights Survive Tax Foreclosure Sales

The Texas Supreme Court held that severed mineral interests are not extinguished under the Texas Tax Code when surface property is sold at a tax foreclosure auction. In Bragg v. Edwards, the court ruled that taxing authorities can only foreclose on interests subject to taxation—and severed minerals aren’t taxable separately from the surface unless they’re producing and assessed separately.

 

Why This Matters to Tax Deeds Investors:

– Protects Hidden Mineral Rights in a Tax Deed Acquisition

CORE’s business model involves buying non-homestead properties through Texas tax deed sales, then reselling or profiting from redemptions. This ruling affirms that mineral rights that were previously severed (often decades ago) do not transfer to the tax deed buyer unless they were specifically part of the tax judgment.

This protects CORE from mistakenly assuming they acquired valuable subsurface rights—rights they may not legally own.

– Reduces Title Risk When Investing in Tax Deed Properties

Buyers of tax-deeded property often pursue quiet title actions to clear ownership. This ruling supports clarity: mineral interests held separately are not clouded by tax sales. That helps CORE accurately assess value and avoid legal disputes when reselling.

– Improves Due Diligence Framework for Tax Deed Property Investors

CORE’s 12-point diligence system (download the 12-step system here) includes checking for encumbrances and title defects. This case sets a clear precedent: unless mineral rights were taxed and foreclosed on, they remain with the original holder. That reinforces the importance of title research—but also limits liability from unknown mineral claims.

Read the full article regarding the ruling here

This ruling helps protect CORE Tax Deeds from accidentally overstepping legal boundaries when acquiring tax sale properties and reinforces the importance of their due diligence model. It ensures surface rights are cleanly transferred, while mineral rights remain with their rightful (severed) owners—clarifying legal expectations and reducing future litigation risk.