Mineral Rights vs. Surface Rights: What Every Property Owner Should Know

Most buyers of properties have always looked at the surface regarding purchasing land, a house, or the location for a business. However, what lies beneath this surface is a myriad set of rights that will affect the value and usability of the property. These rights fall into two main areas: 1) Mineral rights and 2) Surface rights. Knowledge about the difference makes a difference between property owners, particularly in places endowed with natural riches.

What are Mineral Rights?

Mineral rights are the ownership of minerals found beneath the surface of a property. This includes valuable resources such as oil, natural gas, coal, metals, and other underground materials. The rights owner can extract and profit from these resources, often through mining or drilling operations.

Mineral rights can be severed from surface rights in the United States. The ownership of underground resources can belong to someone other than the person owning the land’s surface. Thus, this separation in law has enabled companies and individuals to purchase and exploit mineral rights while having someone else retain control of the surface.

What are Surface Rights?

Surface rights, however, refer to the ownership of the land’s surface. This includes the right to build structures, grow crops, and use the property for other purposes. Surface rights usually give the owner control over everything above the ground but exclude underground resources if another party owns the mineral rights.

This makes the property owners who only have surface rights to a piece of land limited in how they can use the land since the mineral rights owner can take resources from that land. Often, this causes conflict, which is why knowing the terms and conditions of property ownership is essential.

Differences Between Mineral and Surface Rights

• Ownership and Usage: Ownership and Use of Mineral rights shall enable the owner to tap or sell underground resources. Surface rights give the owner rights over the land’s manifest features and surface activities.
• Severability: Mineral rights can also be sold or leased independently from surface rights, thus creating situations in which two parties have overlapping but distinct interests in the same property.
• Priority: Mineral rights often prevail over the rights of those owning the surface. The so-called “dominant estate” doctrine means mineral rights owners may go onto a surface to exploit the minerals, disrupting surface activities.

Common Scenarios for Property Owners

• Buying Property with Severed Rights: If you purchase a property, you may discover that the mineral rights have been severed and sold to another party. In this scenario, it’s essential to understand how this severance impacts your intended use of the land.
• Leasing Mineral Rights: Property owners holding surface and mineral rights can often lease the mineral rights to companies for extraction. These contracts can provide significant revenue but may involve environmental and aesthetic costs.
• Conflict Resolution: Conflicts often occur when mineral rights owners want to access resources to extract. Surface rights owners can sometimes negotiate damages or restrictions imposed by extraction activities.

Protecting Your Interests

Whether you’re buying property or already own it, here are some steps to safeguard your interests:

• Conduct Thorough Research: Review the title report and deed before purchasing property to determine who owns the mineral rights. Title companies can help clarify the division of rights.
• Negotiate Surface Use Agreements: If mineral rights are severed, work with the rights owner to establish terms that protect your surface use while allowing resource extraction.
• Understand Local Laws: State and local regulations regarding mineral and surface rights vary. Consult with a real estate attorney to ensure compliance and protect your interests.
• Consider Insurance: Some title insurance policies offer protection against losses related to severed mineral rights. Discuss options with your insurance provider.

Environmental and Community Impacts

Resource extraction may seriously affect the environment, including land degradation, contamination of water supply, and increased movement of traffic. Property owners ought to be aware of these concerns and the long-term implications for the value and usability of their property. Moreover, community opposition is often sparked by proposals for large extraction projects, where balanced and informed decision-making is essential.

If you’re considering a property purchase or have questions about your existing rights, contact a real estate attorney or a knowledgeable title company like Abstracts of McIntosh County, Inc. A little preparation today can save significant headaches in the future.