How do cemeteries affect the ability to lease and produce oil and gas?
Under Texas law, the record title owner of lands dedicated for a cemetery generally holds title to the real property in trust for the benefit of those entitled to burial therein. The purchaser of an individual plot in a dedicated cemetery is generally regarded as obtaining only a limited property right in the burial plot akin to a license or easement for burial purposes; accordingly, this is not fee simple title extending to the mineral estate.
Therefore, an individual plot owner, by purchase through a burial deed, sepulcher deed, etc., generally only obtains the right to use the land for burial purposes and acquires no interest in the minerals below. However, this is not an absolute conclusion.
Public v. Private Cemeteries
In Texas, cemeteries are primarily regulated under the Texas Health and Safety Code §§ 711 through 715. Under §711.001, it is the responsibility of the state, county, and municipal corporations to uphold cemetery regulations.
The code recognizes two general types of cemetery: public and private.
1. A private cemetery is one used by a single family or small portion of a community.For example, a family-owned burial ground in which no plots or lots are sold to the public and all persons interred therein are restricted to a group related by blood or marriage, is generally considered a private cemetery.
2. A public cemetery, on the other hand, is one used by the general community, a neighborhood, or a church.
It is the use of the cemetery that determines whether it is public or private, rather than the ownership. Even where a cemetery is privately owned or maintained, it may still be considered public if it is open to the public for burial. Church cemeteries are an example of public cemeteries, though they are typically used for the burial of those within in a certain religious group, are maintained and funded directly by the church that owns it, and rules and regulations on church cemeteries are often subject to that specific church.
Under Texas law, individual owners of plots may form a nonprofit cemetery corporation wherein each owner would have the equivalent of a voting share in a corporation. Nonprofit cemetery companies must be owned and operated for the benefit of their owners or members, and may also engage in charitable activities, such as the burial of indigents. While the plot owners have a say in the actions taken by the nonprofit relating to the real property of the cemetery, they do not commonly own fee title to the plot purchased within the cemetery.
Plot Owners Own an Interest in Real Property Equivalent to an Easement
Generally, a purchaser of a plot in a cemetery is regarded as having obtained only a limited property right. He or she acquires a privilege, easement, or license to make burials in the purchased plot, exclusive of all other people, provided that the land remains a cemetery.Although an interest in land passes to the purchaser of a burial plot in a cemetery, the purchaser is not vested with fee simple title.2 The land acquired may be used only for burial purposes,and, after interments have been made in the plot, the owner may not sell or mortgage the plot unless authorized by statute.
Dedicating Lands as a Cemetery: Use of Land as a Cemetery is Sufficient
It has been held that no particular instrument or ceremony is necessary to dedicate or set land apart as a cemetery; the actual use of land as a cemetery is sufficient to effectuate a dedication.
After a dedication for cemetery purposes, no railroad, street, road, alley, pipeline, telephone, telegraph, electric line, wind turbine, cellular telephone tower, or other public utility or thoroughfare may be placed through, over, or across a part of a dedicated cemetery without the consent of (1) the directors of the cemetery organization that owns or operates the cemetery; or (2) at least two-thirds of the owners of plots in the cemetery.
Abandonmentis the only way in which the use of land as a cemetery may cease. It takes place either by removal of all the interred bodies or by neglect to such a degree that the property is no longer identifiable as a cemetery. It takes the ruling of the District Court with jurisdiction over the county in which the cemetery is located for the cemetery dedication to be officially abandoned.
Application to Leasing Lands Owned as a Cemetery
The record title owner, often the cemetery association, is usually the appropriate party to execute oil and gas leases covering the cemetery lands. This is because, as previously indicated, the record title owner of the lands continues to hold title in trust for the benefit of those buried in the cemetery.
Note, however, that the above is only a general rule. If a burial plot deed is a fee simple conveyance of the lands, then the plot owner obtains the minerals underlying the said plot.
Therefore, to determine ownership of the minerals, a review of the chain of title into the cemetery, as well as the various sepulcher deeds, etc. executed by the cemetery owner vesting title to the plots, is necessary.
Further, it is generally unlikely that title will need to be run for every plot owner to obtain the rights to develop the mineral estate underlying a cemetery. However, operations should be handled with the highest of caution, if not avoided entirely, on any lands dedicated for a cemetery.
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 See, Internal Revenue Manual- 4.76.21 Cemetery Companies- IRC 501(c)(13).
 See, Oak Park Cemetery, Inc. v. Donaldson, et al., 148 S.W.2d 994 (1940).
 Peterson v. Stoltz, 269 S.W. 113 (Tex. Civ. App. Beaumont 1925).
 Damon v. State, 52 S.W.2d 368 (Tex. Comm’n App. 1932).
 Tex. Health & Safety Code Ann. § 711.035(d).
13 Tex. Admin. Code § 22.1.