Why do Wilmington area residential sellers need to file a Mineral, Oil, and Gas rights disclosure? Learn the importance of the MOG form in NC real estate transactions.
The Form Everyone Ignores
When sellers in residential neighborhoods across the Cape Fear region receive their stack of closing documents, the “Mineral and Oil and Gas Rights Mandatory Disclosure Statement” (MOG) often gets a confused look. It seems entirely irrelevant to selling a three-bedroom ranch in Wilmington or a townhouse in Leland.
Despite its apparent irrelevance to everyday suburban life, the MOG is a mandatory requirement imposed by the North Carolina Real Estate Commission for most residential sales. It was born out of the fracking debates years ago but applies to all properties, regardless of whether energy exploration is happening nearby.
Understanding this form is essential because it addresses a fundamental aspect of property law: subsurface rights. You might own the land and the house, but you might not own what lies beneath.
Subsurface Rights vs. Surface Rights
In North Carolina property law, land ownership can be split like a layer cake. The surface rights (where your house sits and grass grows) can be separated from the subsurface rights (minerals, oil, or natural gas located underground).
Historically, large tracts of land in rural North Carolina had these rights severed. A timber company or an ancestor might have sold the surface land for development in the 1950s but retained the mineral rights for themselves or sold them to an energy company.
Over decades, that surface land was subdivided into the residential neighborhood you live in today. The MOG form is designed to inform the buyer if those subsurface rights were ever severed in the property’s history.
Completing the MOG: What It Asks
The MOG disclosure is relatively short compared to the residential property disclosure. It asks a series of specific questions:
- Have the mineral rights been severed from the property by a previous owner?
- Have the seller themselves severed the mineral rights?
- Have the seller themselves leased the mineral rights to a third party?
- Have the oil and gas rights been severed or leased?
For the vast majority of residential sellers in the Cape Fear area, the honest answer to whether they have severed or leased rights is “No.”
However, the tricky question is whether a previous owner severed them. Unless you have done a deep title search back several decades, you likely don’t know the answer.
The Power of “No Representation” on the MOG
Because it is so difficult for an average homeowner to know the history of subsurface rights from 75 years ago, the “No Representation” checkbox is heavily used on the MOG form.
By selecting “No Representation” regarding previous owners, you are truthfully stating that you do not know the status of those rights. This puts the burden on the buyer during their due diligence period to have their closing attorney conduct a thorough title search if they are concerned about subsurface ownership.
Sellers should never guess “No” if they are unsure. Incorrectly stating that rights have not been severed, when in fact they were decades ago, could technically be a misrepresentation.
Conclusion: A Mandatory Step, Even for Cash Sales
Even in the hot real estate market of Southeastern North Carolina, where buyers are waiving contingencies left and right, the requirement for the seller to provide the MOG before an offer cannot be waived.
Whether you are selling through a traditional agent to a family, or selling directly to a professional investment firm like Cape Fear Cash Offer, you must provide this document. The good news for sellers looking for an easy exit is that professional cash buyers are rarely deterred by “No Representation” marks on an MOG form; they understand the legal landscape and handle their own due diligence.
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