I was about to make an offer on some land and found out it didn't come with mineral rights!!!!Found out that it is very hard to get mineral rights in WV. What thu??? Other people abviously are ignoring this but what if some company decides to dig up your land when the price of coal goes higher??? Very dissappointing. I haven't heard of any horror stories but it does concern me. Am I being overly concerned here?
No mineral rights in WV?????? HUH?
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GRUMPA
Gold Member
I don't think your being overly cautious, when we bought our 40 acres years ago that was one of the selling points. We had to request the microfilmed documents from the county on it. After getting them and reading thru it all, it states right there that if there is ANY marketable mineral they can just give you fair market value for your property and your evicted from what you thought was your land. We bought the mineral rights for our place and later found out that nobody else did in a 50 square mile area. That was a major concern for us.
sneaky_pete
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It is very common these days for the mineral rights to be severed, i.e., they were retained or sold separately from the surface at some point. For instance, in an oil and gas producing trend, the minerals could be worth more than the surface. In most states the mineral owner (or his lessee) have the right to explore for and develop their mineral estate. How these rights have precedence (if any) over the rights of the surface owner depends on the state, but since all states get tax revenue off of production (at a MUCH higher rate than ordinary property taxes) you can bet that most are going to favor the mineral estate. That is certainly the case here in Texas.
You are wise to at least be aware of the situation and know in advance what your rights are. The ownership of the mineral rights under your land (or his lessee) is a matter of public record at your county court house. Also, just because your rights are severed doesn't necessarily mean there is coal or gas or oil under your property. Your state geological survey should be able to help you determine how close you are to any known coal or other mineral production; this would give you some idea about how likely it may be that your surface acres could be disturbed for mineral exploration, but severed rights are a fact of life for many of us (including me; as a matter of fact, a seismic survey is being conducted across my surface as we speak).
Pete
You are wise to at least be aware of the situation and know in advance what your rights are. The ownership of the mineral rights under your land (or his lessee) is a matter of public record at your county court house. Also, just because your rights are severed doesn't necessarily mean there is coal or gas or oil under your property. Your state geological survey should be able to help you determine how close you are to any known coal or other mineral production; this would give you some idea about how likely it may be that your surface acres could be disturbed for mineral exploration, but severed rights are a fact of life for many of us (including me; as a matter of fact, a seismic survey is being conducted across my surface as we speak).
Pete
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Since I recently bought a reasonable size lot in addition to the 12 acres of property my house is on, I ran across a similar situation in Indiana. (also a coal mining area) When I bought my 12 acres on which I built my house, I bought it from the same family who originally got the land from the U.S. government. The lady was 95 years old, and she had obtained the land as a gift from her grandfather. They had never sold any of the mineral rights over the years.
Now, when I bought about 180 acres a few miles from my house, I ran into this mineral right issue as you described. When doing a complete title search, I found that over the last 100 years that there were several companies that have, and still own, the mineral rights under the property. It appears that several of the companies bought mineral rights many many years ago in square mile areas; not by the acreage. Apparently in the '40's a section of what I bought had been underground mined, and all of the area had been drilled and tested over the decades.
For what it's worth, I found that my property only has about an 8" seam of coal in what is called the #5 seam. From what the department of natural resources told me, the 5th seam (#5 seam) is the deepest designation seam that is considered to be able to be mined in most areas. I'm not sure if each # seam represents a hundred feet or not, but the 8" seam of coal under my property is at just over 500 feet deep. I spent nearly a month getting responses back from the companies who own the rights to learn more. Apparently it will never be feasible to go after an 8" seam that is 500 feet down according to what they have told me. Also, no oil or gas was found in exploratory drilling decades ago.
So, I thought that there shouldn't be any problem for them to release the mineral rights to me for my property there. Wrong. The companies who own the mineral rights almost always release the rights as a whole, and not in sections. Until they exhaust all of the minerals they can recover in about a 50 square mile area, they will not release any mineral rights. I even went to the courthouse in that area and had the original purchase agreements with this company copied for me. In their agreement, it states that the mineral rights will revert to the surface owner when all "reasonable means of recovering said minerals have been exhausted". I again tried to get the rights released to me since I now also had the exploration results from almost 60 years ago done on my property and they showed that there were no minerals they could reasonably reach. Still, the company owning the rights refused to release a specific plot. They said that in the area they own that there are thousands of individual land owners and that if they released the rights for one, then they would be flooded with requests for others. That, they said, would cost them untold amounts of time and money. They again said that they would only release the entire area as a whole. When? Who knows.
I even had an attorney look over all the documentation I had to see if I could reasonably prove in court that I owned the mineral rights on the property because of the clause in the company's purchase agreement referring to the rights reverting to the surface owner after all means to extract the subsurface minerals have been exhaused. After researching it, my attorney told me "maybe", but don't count on it. Basically he told me that I was likely right, but I'd never be able to afford the legal expenses in a court battle to prove it.
It boiled down to me just having to weigh the possibility of future problems versus not. Since all sources seemed to say that it would be highly unlikely that they would ever go after 8" of coal and, it would be a deep mine, that I shouldn't worry about it. Although it still somewhat bothers me, I went ahead and bought the property. Afterwards, I've discovered that even where my house is, most of the property owners around me do not own the mineral rights under their property and, that it is rather uncommon that I do. Oh well, I don't know if this helps, but this is what I've found in hundreds of hours of research in my area. If you want more info, feel free to PM me and I can tell you more. I just don't know how much would apply to your area vs. my area. Good luck!
Now, when I bought about 180 acres a few miles from my house, I ran into this mineral right issue as you described. When doing a complete title search, I found that over the last 100 years that there were several companies that have, and still own, the mineral rights under the property. It appears that several of the companies bought mineral rights many many years ago in square mile areas; not by the acreage. Apparently in the '40's a section of what I bought had been underground mined, and all of the area had been drilled and tested over the decades.
For what it's worth, I found that my property only has about an 8" seam of coal in what is called the #5 seam. From what the department of natural resources told me, the 5th seam (#5 seam) is the deepest designation seam that is considered to be able to be mined in most areas. I'm not sure if each # seam represents a hundred feet or not, but the 8" seam of coal under my property is at just over 500 feet deep. I spent nearly a month getting responses back from the companies who own the rights to learn more. Apparently it will never be feasible to go after an 8" seam that is 500 feet down according to what they have told me. Also, no oil or gas was found in exploratory drilling decades ago.
So, I thought that there shouldn't be any problem for them to release the mineral rights to me for my property there. Wrong. The companies who own the mineral rights almost always release the rights as a whole, and not in sections. Until they exhaust all of the minerals they can recover in about a 50 square mile area, they will not release any mineral rights. I even went to the courthouse in that area and had the original purchase agreements with this company copied for me. In their agreement, it states that the mineral rights will revert to the surface owner when all "reasonable means of recovering said minerals have been exhausted". I again tried to get the rights released to me since I now also had the exploration results from almost 60 years ago done on my property and they showed that there were no minerals they could reasonably reach. Still, the company owning the rights refused to release a specific plot. They said that in the area they own that there are thousands of individual land owners and that if they released the rights for one, then they would be flooded with requests for others. That, they said, would cost them untold amounts of time and money. They again said that they would only release the entire area as a whole. When? Who knows.
I even had an attorney look over all the documentation I had to see if I could reasonably prove in court that I owned the mineral rights on the property because of the clause in the company's purchase agreement referring to the rights reverting to the surface owner after all means to extract the subsurface minerals have been exhaused. After researching it, my attorney told me "maybe", but don't count on it. Basically he told me that I was likely right, but I'd never be able to afford the legal expenses in a court battle to prove it.
It boiled down to me just having to weigh the possibility of future problems versus not. Since all sources seemed to say that it would be highly unlikely that they would ever go after 8" of coal and, it would be a deep mine, that I shouldn't worry about it. Although it still somewhat bothers me, I went ahead and bought the property. Afterwards, I've discovered that even where my house is, most of the property owners around me do not own the mineral rights under their property and, that it is rather uncommon that I do. Oh well, I don't know if this helps, but this is what I've found in hundreds of hours of research in my area. If you want more info, feel free to PM me and I can tell you more. I just don't know how much would apply to your area vs. my area. Good luck!
stevenf
Platinum Member
widmn,
When we bought our ranch we went the totally legal and formal way with Title company and the works but before we did this I have a very good friend who is a Corporate Attorney that specializes in real estate. There is a new loop whole that has come up (I hate attorneys). Heres what he had us do first unless you have some desire to drill for oil, or mine for a mineral frankly he said gravel is considered a viable mineral to mine and he'd had more trouble with land owners losing their surface rights to gravel mining around here than he did oil. Put in your offer that you are happy to accept their property without transfering any of the mineral rights to you all you want is "executive rights to the surface". What this does is allow whoever has the mineral rights to keep them exactly as they are "but" since you now control executive rights to the surface you can withhold approval indefinitely for them to even set foot on your land much less do any mining or drilling for anything. This little stunt was new when we did it in 1999 and they have probably figured it out by now but the Title company and the previous owners bought off on it in our case and according to my buddy it has held up in Texas courts many times. The problem is obvious your working outside of paper that is dated long before yours and I'm sure if the right company gets this done to them it'll fail but since your Title company signs off on it it will be their problem to defend the contract. Yes worst case you'll lose the property back to the original owners or something but the title company will owe you a bunch of money since it will be deemed their fault.
In Texas and a lot of the oil rich states the problem of the mineral rights being seperated from the surface is common if not expected and to buy the mineral rights is complicated if not impossible any many cases if it was done long enough ago it could be spread through hundreds of heirs that have to be contacted and bought out and at what price.
Just go for Executive rights to the surface as most Title company's associate that with duh thats what your buying dummy they don't realize or maybe they don't care, that Executive gives you supreme rights to the surface to include ingress and egress of prospecting company's.
Steve
When we bought our ranch we went the totally legal and formal way with Title company and the works but before we did this I have a very good friend who is a Corporate Attorney that specializes in real estate. There is a new loop whole that has come up (I hate attorneys). Heres what he had us do first unless you have some desire to drill for oil, or mine for a mineral frankly he said gravel is considered a viable mineral to mine and he'd had more trouble with land owners losing their surface rights to gravel mining around here than he did oil. Put in your offer that you are happy to accept their property without transfering any of the mineral rights to you all you want is "executive rights to the surface". What this does is allow whoever has the mineral rights to keep them exactly as they are "but" since you now control executive rights to the surface you can withhold approval indefinitely for them to even set foot on your land much less do any mining or drilling for anything. This little stunt was new when we did it in 1999 and they have probably figured it out by now but the Title company and the previous owners bought off on it in our case and according to my buddy it has held up in Texas courts many times. The problem is obvious your working outside of paper that is dated long before yours and I'm sure if the right company gets this done to them it'll fail but since your Title company signs off on it it will be their problem to defend the contract. Yes worst case you'll lose the property back to the original owners or something but the title company will owe you a bunch of money since it will be deemed their fault.
In Texas and a lot of the oil rich states the problem of the mineral rights being seperated from the surface is common if not expected and to buy the mineral rights is complicated if not impossible any many cases if it was done long enough ago it could be spread through hundreds of heirs that have to be contacted and bought out and at what price.
Just go for Executive rights to the surface as most Title company's associate that with duh thats what your buying dummy they don't realize or maybe they don't care, that Executive gives you supreme rights to the surface to include ingress and egress of prospecting company's.
Steve
EastTexFrank
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You've got some very good answers to your question here but don't forget that as the land owner you do have some rights too. It'll probably take a lawyer to negotiate the terms but you can control surface damages, access, roads, fences, etc.
Dealng with a land owner who doesn't have mineral rights can often be, well .... interesting, because they have no incentive to have you there. There are lots of stories but one of my favorites is the rancher who was caught trying to drag a dead cow on to a well location in the wee small hours of the morning no doubt in order to try to claim compensation from the oil company. Funnily enough, no matter how scrawny the beast is, it always seems to be his pedigree heifer or herd bull. /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif
Dealng with a land owner who doesn't have mineral rights can often be, well .... interesting, because they have no incentive to have you there. There are lots of stories but one of my favorites is the rancher who was caught trying to drag a dead cow on to a well location in the wee small hours of the morning no doubt in order to try to claim compensation from the oil company. Funnily enough, no matter how scrawny the beast is, it always seems to be his pedigree heifer or herd bull. /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif
WhiteRock
Silver Member
I personally think that land owners should call for legislative action requiring mineral rights owners to be required to pay a proportional amount of the real estate taxes.
Problem solved.
Problem solved.
While you might not have mineral rights. In many areas those have been sold off years ago by the legal owner of the land. Not much you can do about that. However not having the mineral right doesnt mean that the owners can come in and did up your land. It may mean they have to go under ground to get it from some other property.
I know on my land I have no gas/oil rights but there is no rights requiring me to let some one drill on my land. If they want it they have to drill from a property they own.
I know on my land I have no gas/oil rights but there is no rights requiring me to let some one drill on my land. If they want it they have to drill from a property they own.
btolle
Platinum Member
</font><font color="blue" class="small">( Put in your offer that you are happy to accept their property without transfering any of the mineral rights to you all you want is "executive rights to the surface".
------------<SNIPPED>---------------
The problem is obvious your working outside of paper that is dated long before yours and I'm sure if the right company gets this done to them it'll fail but since your Title company signs off on it it will be their problem to defend the contract. Yes worst case you'll lose the property back to the original owners or something but the title company will owe you a bunch of money since it will be deemed their fault.)</font>
Ahhh, another of those pesky issues that comes up for land buyers.
The title company is only liable for the amount stated in the title policy, normally the sales price. I have never seen a title policy for any other amount than the sales price.
If you build a house on the land they are still only liable for the land purchase price. Not many would want to sell their land AND all the improvements for the price they paid for the land a few years ago.
You are better off if the property is taken by "eminent domain", at least they pay you the appraised price. You can sue if you feel the appraisal is too low and I have seen folks win, even against government agencies, and get a higher price.
To throw another kink in the works: See that beautiful stream across the back of the property? Looks like plenty of water for your huge garden. STOP! That may not be your water. In Texas surface water belongs to the state. You can look at it, you just can't take any of it out of the stream unless you get a permit from the state.
Texas A & M Real Estate Center water rights publication
Texas law says that the underground water belongs to the landowner but water rights can be sold. In fact, in some areas of Texas the water under the land (aquifer) is worth more than the land and is being sold off separately.
Life gets more complicated every day.
DISCLAIMER: I am a Licensed Texas Real Estate Salesperson and cannot give legal advice. If you are in doubt about any real estate matter you should contact an Attorney.
Bill Tolle
------------<SNIPPED>---------------
The problem is obvious your working outside of paper that is dated long before yours and I'm sure if the right company gets this done to them it'll fail but since your Title company signs off on it it will be their problem to defend the contract. Yes worst case you'll lose the property back to the original owners or something but the title company will owe you a bunch of money since it will be deemed their fault.)</font>
Ahhh, another of those pesky issues that comes up for land buyers.
The title company is only liable for the amount stated in the title policy, normally the sales price. I have never seen a title policy for any other amount than the sales price.
If you build a house on the land they are still only liable for the land purchase price. Not many would want to sell their land AND all the improvements for the price they paid for the land a few years ago.
You are better off if the property is taken by "eminent domain", at least they pay you the appraised price. You can sue if you feel the appraisal is too low and I have seen folks win, even against government agencies, and get a higher price.
To throw another kink in the works: See that beautiful stream across the back of the property? Looks like plenty of water for your huge garden. STOP! That may not be your water. In Texas surface water belongs to the state. You can look at it, you just can't take any of it out of the stream unless you get a permit from the state.
Texas A & M Real Estate Center water rights publication
Texas law says that the underground water belongs to the landowner but water rights can be sold. In fact, in some areas of Texas the water under the land (aquifer) is worth more than the land and is being sold off separately.
Life gets more complicated every day.
DISCLAIMER: I am a Licensed Texas Real Estate Salesperson and cannot give legal advice. If you are in doubt about any real estate matter you should contact an Attorney.
Bill Tolle
btolle
Platinum Member
</font><font color="blue" class="small">( However not having the mineral right doesnt mean that the owners can come in and did up your land. It may mean they have to go under ground to get it from some other property.
I know on my land I have no gas/oil rights but there is no rights requiring me to let some one drill on my land. If they want it they have to drill from a property they own. )</font>
Your profile is not filled out so I don't know what state yu are in, but you might want to check with a lawyer on that.
In many (if not most) states if they own the mineral rights they can come onto your land, build a road to the well site, drill an oil well, set their pumping equipment, and run power lines and oil pipelines to it without ever saying a word to you. Unless the deed to the mineral rights says otherwise you can't stop them.
DISCLAIMER: I am a Licensed Texas Real Estate Salesperson and cannot give legal advice. If you are in doubt about any real estate matter you should contact an Attorney.
Bill Tolle
I know on my land I have no gas/oil rights but there is no rights requiring me to let some one drill on my land. If they want it they have to drill from a property they own. )</font>
Your profile is not filled out so I don't know what state yu are in, but you might want to check with a lawyer on that.
In many (if not most) states if they own the mineral rights they can come onto your land, build a road to the well site, drill an oil well, set their pumping equipment, and run power lines and oil pipelines to it without ever saying a word to you. Unless the deed to the mineral rights says otherwise you can't stop them.
DISCLAIMER: I am a Licensed Texas Real Estate Salesperson and cannot give legal advice. If you are in doubt about any real estate matter you should contact an Attorney.
Bill Tolle
