Preliminary title report shows lease

What is the name of your state? California.
We are in a 30 day escrow for a single family home. The widow had a living trust with son and daughter. The widow is no more and the hiers (TRUST) are selling the property to us.
Preliminary title report has one exception that is bothering us.
"...widow had a lease with Atlantic Oil company, with widow as lessor and atlantic oil company as lessee. This lease if for property 500feet below the surface, with no right of surface entry. " This lease was execute in 1968.

Should we worry about this?
Escrow officer says that this lease transfers over to the new land owner that is us.
Title officer says we should have it transferred over in the deed of trust.

Can you please tell us our options, what to do and what not to do.

Thanks!
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[HomeGuru]

[quote]Originally posted by rmulchandani
[b]What is the name of your state? California.
We are in a 30 day escrow for a single family home. The widow had a living trust with son and daughter. The widow is no more and the hiers (TRUST) are selling the property to us.
Preliminary title report has one exception that is bothering us.
"...widow had a lease with Atlantic Oil company, with widow as lessor and atlantic oil company as lessee. This lease if for property 500feet below the surface, with no right of surface entry. " This lease was execute in 1968.

Should we worry about this?
Escrow officer says that this lease transfers over to the new land owner that is us.
Title officer says we should have it transferred over in the deed of trust.

Can you please tell us our options, what to do and what not to do.

Thanks!

**A: yes, you should be concerned. Ask the title compnay for a copy of this lease. Also you need to determine the status of the lease ie. does it run forever with the land or is there a termination date, is there an abandonement clause, can the lease be assigned, is the company lessee still around and if so what are their intentions, what is the purpose of the lease (giving gas, water, oil, mineral rights etc.)..too many questions and absolutely no answers.

State:California
Thanks, Guru!
The lease if for oil and gas. The lessee is still around (Arco).
Our real estate agent told us that they would have this lease transferred over to us in the grant deed.
However, you raised a good point, "...is this lease assignable".
But since lease does not have any right of surface entry, worst case scenario - we only lose the $royalties$ if any from the oil/gas being pumped underneath our house. Right? Thanks!

[HomeGuru]

[quote]Originally posted by rmulchandani
[b]State:California
Thanks, Guru!
The lease if for oil and gas. The lessee is still around (Arco).
Our real estate agent told us that they would have this lease transferred over to us in the grant deed.
However, you raised a good point, "...is this lease assignable".
But since lease does not have any right of surface entry, worst case scenario - we only lose the $royalties$ if any from the oil/gas being pumped underneath our house. Right? Thanks!

**A: I would not be so fast to make such an assumption without a review of the entire lease document. Have an attorney give you a legal opinion. Remember, you are buying the property subject to the lease.