When considering any given piece of property, the general rule is that the owner of the land owns both the surface estate and the land beneath it, also known as the mineral or subsurface estate. With ownership of this mineral estate, the owner is permitted to explore and extract the land for oil, gas, gold, and other potentially lucrative natural resources.
However, not all titles offer both surface and mineral rights. In other words, surface and mineral rights can be severed, creating a situation where one owner owns the surface of the land while another party owns the subsurface estate. This can occur for several reasons, and in some cases should be carefully attended to. Below, Adam Ferrari explains what you can do if the previous owner has severed mineral rights from the property.
What if My Mineral Rights Have Been Severed?
If your severance explicitly grants surface access rights to the party which holds the mineral estate, this issue will need to be resolved quickly. This is because the owner of the surface rights is generally prohibited from developing the property surface in a way that could jeopardize the mineral estate holder’s development of the land for drilling and mining purposes.
This is important because if a solar developer, for instance, were to build a field of solar panels without mineral rights, they would risk the mineral rights developer stepping in to drill right in the middle of the panel layout. In some cases, these disputes are so contentious that both parties walk away without purchasing the land due to severed rights.
How to Resolve a Mineral Rights Dispute
If you are looking to resolve a mineral rights dispute, there are several avenues you can take. Firstly, you can purchase the mineral estate outright. If that route is too expensive, you can attempt to acquire a waiver of surface rights from the holder of the mineral estate to ensure that they cannot simply develop on the land at-will.
You can also seek to develop a surface rights agreement or mutual accommodation between the owners of the surface and the minerals. These agreements can take on a variety of forms, most commonly involving moving a drilling/mining project to a certain portion of the surface zone.
Getting ahead of the game as much as possible will put you in a better position to negotiate over mineral rights. By identifying the issue early, the problem of severed mineral rights can usually be resolved in a timely manner.
If a previous owner of your property or a property you are looking to purchase has severed the mineral rights from the surface rights on the land, you should be aware of the risks and challenges that this predicament poses.
While in many cases agreements can be reached that is mutually beneficial for both parties, addressing the issue as soon as possible is the best way to ensure that you come away satisfied. You don’t want to get stuck with severed land rights without knowing it!
About Adam Ferrari
Adam Ferrari is the founder of the mineral acquisitions company Ferrari Energy. He is a chemical engineer by degree and is an accomplished petroleum engineer by profession. He also has experience in the financial sector through his work at an investment banking firm. Under his leadership, his company has supported numerous charitable organizations including St. Jude Children’s Hospital, Freedom Service Dogs, Denver Rescue Mission, Coats for Colorado, and Next Steps of Chicago.