Last Updated on You just purchased a piece of land, and minerals have been found beneath the surface. Congratulations! However, such a scenario needs research to determine if you can control these underground resources.
Subsurface rights definition: legal ownership giving you control over anything that lies in the ground beneath the property/land you own.
Even though subsurface and surface rights sound similar, they are not just different but can also be owned independently. Even some real estate agents question if subsurface rights are real property.
This is why you cannot assume you own everything on and within your land. This article explains and identifies various subsurface rights issues in detail so you can understand them.
What are subsurface rights?
These grant the mineral rights owners the power to control everything, including oil, natural gas, and other minerals underneath the ground’s surface or a particular piece of property.
What is the difference between subsurface and surface rights?
- Subsurface rights refer to the minerals, oil, and gas beneath the surface of the land.
- Surface rights refer to the right to use and occupy the surface of the land.
- The surface estate owner may or may not also own the subsurface estate.
What is included in subsurface rights?
Subsurface rights include the minerals, oil, and gas found beneath the land’s surface. The owner of the subsurface estate has the right to extract these resources.
Surface rights grant owners the right to use everything above the ground within the property boundaries. This may even include the immediate air space within that area. These rights can be separated and conveyed independently of each other. Surface rights cover structures like fences, buildings, trees, plants, and access to water.
Are subsurface rights considered real property?
Yes, subsurface rights are considered real property. This includes the rights to any minerals, oil, gas, or other natural resources that may be located beneath the surface of the land. These rights can be bought, sold, leased, or inherited like any other real property.
Different nations have different laws
Concerning land ownership and property law, subsurface rights can allow a property owner to discover and utilize anything extracted from underneath a property without interference from a second party. Purchasing both rights for a property is possible. In some countries, for example, the United Kingdom, ownership of subsurface property belongs to the property owner, except when precious metals – including silver and gold – are involved.
In contrast, in Canada, the government maintains ownership and the right to use any pore space on all properties in the country. However, legislation is continually updated. For this reason, owners should determine their rights and know more about mineral estate law by acquainting themselves with some common scenarios.
Subsurface rights can be divided
Similar to other real estate assets, subsurface rights are real property. They may be owned independently or shared among various parties. In most cases, purchasing subsurface rights to properties often includes ownership of mineral rights.
Are subsurface rights the same as mineral rights?
Mineral rights give the owner the right to use any minerals available underneath the surface of a property.
As explained earlier, subsurface rights grant the holder access to resources beneath a parcel of land within the property boundaries.
So it is safe to affirm that mineral rights and subsurface rights are the same and are commonly used interchangeably. After all, minerals are real estate resources found in the ground beneath properties.
Why are subsurface rights valuable?
The contribution of minerals such as uranium to civilization is almost unparalleled. Therefore, it is only natural that accessing subsurface resources will have value. Likewise, the legal power to exploit them is also valuable.
Some owners prefer leases
Title holders of subsurface rights for properties may be contacted by oil gas companies interested in developing the minerals found. You can profit from such an opportunity in several ways.
For some people, entering a lease agreement with an interested party is the best choice, as the owner will retain access to the resources. During the lease, the lessee issues you payment as compensation for developing the minerals in the land.
Participating in mineral development
You can also agree to participate in developing the minerals rather than just leasing them. The main benefit is the added revenue since you will hold a working interest in the production operation. However, you will also share responsibility for exploration and drilling costs. Despite this, it is a good way for landowners to earn revenue from any minerals discovered on their properties.
Sell your subsurface rights
Another option that you can explore is selling your rights. In this scenario, you can either sell a portion or the entire subsurface resources.
Some landowners might simply sell a portion of their rights and lease the rest. They get cash for the rights they sell but also get compensated in bonuses and royalties for the leasing part of the land.
Selling your rights can be profitable
Many landowners make a significant amount of money from selling their subsurface rights. However, research how valuable your resources are before you negotiate a fair price with any interested oil and gas company. You might even decide to sell mineral royalties.
For legal assistance, you can employ the services of an attorney who specializes in the oil industry. If you sign a lease agreement, your attorney will explain all the lease terms to you, so you understand the deal better.
How to buy subsurface rights for a piece of property?
You must follow some steps if you wish to buy the rights to use subsurface resources on a piece of property:
Search the subsurface rights available for sale
If you wish to purchase the subsurface rights of a piece of land, search the availability of the rights – regardless of whether or not you own the surface rights to the property.
Identify which minerals are most productive and those that are for sale
The most valuable minerals sold across the globe are oil, gold, diamonds, copper, and coal. Oil and gas are the most common minerals for mining in the United States.
Various websites list mineral rights for sale.
You should determine if the real estate property you wish to purchase holds minerals, according to the state and federal governments. This definition often varies across states.
Acquaint yourself with state laws
You should go through the particular state laws to determine how people can purchase mineral rights. The sale of both surface and mineral rights is influenced by specific drilling regulations.
These laws can also vary from one city to another, even if only slightly. You can also acquire the services of a lawyer to learn more.
Make your offer
Before making an offer, you should negotiate the important terms of the agreement. Among others, these terms include the type of minerals and the mineral extraction method. Finally, you can sign the sale agreement and seal the purchase.
Conclusion
A mineral rights holder or subsurface rights holder may explore and exploit minerals such as natural gas, oil, and coal below the ground within the boundaries of their specific property.
Commonly called mineral rights, these rights are real estate assets, which differ from the rights to the land surface of a property. The latter gives power to a surface rights holder to exploit everything found above the surface, including buildings and trees.
Note that proper research is essential to ensure that all parties interested in buying/selling subsurface rights get the best deal. If you need expert advice, contact Pheasant Energy.
Leave a Reply