DR Horton is the nation’s largest homebuilder but that’s not enough success for them. They also want to be in the oil and gas business. When you buy a DR Horton home, you have to sign away your rights to any minerals under the home.
Texas-based D.R. Horton, the nation’s largest homebuilder, is then transferring those exploration rights en masse to its subsidiary, DRH Energy.
The terms give DRH Energy, also based in Texas, “the perpetual right to drill, mine, explore … and remove any of the subsurface resources on or from the property by any means whatsoever,” according to property deeds filed in Chatham, Wake and Durham counties.
In an article published today in The Durham News, New homes sold without underground rights spur fracking fears, we learn that you better find a buyer with a bunch of cash if you want to sell a DR Horton home.
For the D.R. Horton homes, however, the problem may go beyond perceptions. Those homes, stripped of their exploration rights, could be harder to refinance and resell because some lenders won’t back a mortgage for a property that doesn’t come with “mineral rights,” the legal term for the right to mine, drill and explore beneath a property.
The State Employees Credit Union is among those that won’t underwrite homes without mineral rights “because of the potential danger” of property damage, water contamination and other risks that could cause property values to sink, said Spencer Scarboro, SECU’s senior vice president of loan originations.
“We’re putting our branches on notice to be looking for it anytime where D.R. Horton is the seller,” Scarboro said. “It’s just a small little blurb in the contract. It’s easily missed if you’re not looking for it.”
UPDATE: Some additional and stunning information regarding DR Horton in the Barnett Shale will soon be revealed. Fasten your seat belts.