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Surface Rights Versus Mineral Rights

While not all of us are fortunate enough to own land at all, some individuals are lucky enough to own land AND own land that sits on valuable resources like oil, gas, and minerals. These extremely valuable resources can be mined for huge profits, but only by companies that know how to explore, extract, and process them. That’s why property owners often consider selling their mineral rights to interested and qualified buyers who know how to get them out of the ground efficiently and effectively.

Say you are a property owner and say you have a pretty good suspicion that you have some valuable resources on your land. It should be easy just to sell those rights and collect the profit, right? Well, unfortunately, it is not always that easy. When it comes to land rights, there are two different types, called “estates,” and they are not always joined together. Surface rights are just what they sound like, ownership of the surface of the land. Mineral rights extend below the surface to the valuable, naturally occurring deposits below the ground. In some cases, the surface rights and mineral rights are “severed” meaning that the person who owns one does not own the other.

In fact, in the 1900’s, when many of the large oil and gas companies were really ramping up production in the U.S., they would often sell the surface rights to people who wanted to settle on the land, but would keep the mineral rights for themselves to later explore and develop when they saw fit. For some property owners, this means that their long-standing mineral rights actually belong to someone else, and they are not eligible to sell those rights.

If a landowner owns both the surface rights and the mineral rights to his or her land, that is known as a “fee-simple deed,” and it is much easier to sell, transfer, or gain royalties to the mineral rights on the property if this is the case. For people who have severed rights, the individual who owns the mineral rights can not only sell them; they can explore, develop, and produce the rights on that land (including the surface, within reason).

If you are unsure of whether or not you own the surface rights to your property, you can do some simple investigation into the ownership history of your property (and should be on the lookout for ownership by gas or oil companies, specifically) or you can hire a title company to do the research for you. It is a good idea to do this research so that you know the true extent of your ownership rights to your property, and if you have valuable resources underground, you might consider selling your mineral rights to a qualified buyer.

The more you know about surface rights and mineral rights, the more educated you can be during the property-buying process as well, so do some research, hire a company, and find out exactly how much of your property you really own.

 

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