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Mineral Rights and Land Ownership 101

What are Mineral Rights

Have you ever thought to yourself, “I wonder what would happen if I discovered my house was built on a gold mine?”

 

We often receive questions about the mineral rights associated with land properties. This article will shed light on the subject to help define what mineral rights are, why they are important, and how to determine legal ownership. 

 

What are Mineral Rights?

 

Mineral rights give landowners the rights to the minerals in the land area they may own; the rights to explore, develop and extract whatever resources they might find beneath the surface of the land. These resources could be oil, coal, gold, silver, or any other commodity found beneath soil. They are similar to land rights in the sense that they can be bought, transferred, and sold.

 

Mineral rights do not exist everywhere in the U.S., as they only apply in certain states: North Carolina, Alabama, Mississippi, Virginia, New Mexico, Nevada, Arizona, Oklahoma, Utah, Idaho, Texas, Colorado, Washington and California. If you live in one of these states and own land, you are going to want to continue reading!

 

 

Why are Mineral Rights important?

 

Pablo Solomon, award-winning Green designer, told us about an unfortunate situation some of his friends ran into after purchasing a beautiful home outside of Austin, TX. All was well until they found out a concrete company owned the mineral rights to the land beneath the home.

 

“In Texas, you can own the surface without owning the subsurface. [This means] a gravel or coal or stone company can excavate and are only required to restore the surface soil.” This created a big issue for the new home buyers. 

 

“Within just a few years my friends found themselves basically sitting on a mesa artificially created by the concrete company excavating limestone to a depth of almost 50 feet all around. The noise, the dust and the total devastation of the surrounding environment caused them to sell. They were lucky to get pennies on the dollar [for their home],” said Pablo.

 

This might be an extreme case and the worst outcome, but it’s not impossible. Conversely if you found gold under your house, it would be yours.

 

Pablo Solomon’s mother grew up in South Texas as a sharecropper picking cotton. Pablo told us, “Her brothers served in the military in WW2 and when they returned home, the family pooled their money and bought part of the farm upon which they were raised. This included mineral rights.” As the years went by, oil was found on the land! In Pablo’s words, “While no one got JR rich, the extra income was a God send.” The family did earn enough money to put his generation of family members through college.

 

Why Are Mineral Rights Important

 

How do I know if I have Mineral Rights?

Sue Ginter, former escrow officer with Fidelity National Title, advised to be thorough when it comes to determining if your property has mineral rights.

 

“If there are no mineral exceptions shown in the title chain we will not make any reference to mineral exceptions.  BUT, we do not assure the buyer they have rights to the minerals.  If anyone wants assurance they have water rights, or mineral rights, we’d suggest they contact an attorney that has experience in these matters.”

 

In summary, when a person purchases a property, the title company searches the chain of title and only reports if there are Mineral Rights of record, however title companies do not insure them one way or the other.  If anyone wants assurance that they have mineral rights, water rights, etc. it is best that they contact an attorney with experience in those areas.

 

Alternatively, a local abstract company should be able to provide you with some assistance. The current deed to the land most likely does not cover mineral rights, which may require additional hoops to figure out who the owner is.

 

In Conclusion

Whether you are a prospective or current landowner, it may be well worth your time to look into mineral rights for the property you have in mind. Who knows, you may just hit the jackpot!

 

 

 

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Photo Credit: Unsplash | Gabriel Jimenez, Jamar Penny

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