Mineral Rights As Clear As Mud

Thursday, May 19, 2016 by Aryeh Lazarus, Esq.

Savvy investors know that profitable real estate investments exist across the country, not just in regional hotspots like NY or NJ. What they don't know is that new investment areas have new different pitfalls, obstacles and issues that can crop up when investors venture into deals outside their normal geographic comfort zone.

I’d like to discuss a common title issue that crops up in different parts of the country which is mineral rights.

In many areas the mineral rights or the right to it is the right of the owner to exploit, mine, and/or produce any or all of the minerals lying below the surface of the property.These rights are a separate “stick in the proverbial bundle” of real property rights.  Essentially, the ground lessor and the property owner have separate and distinct rights to the same geographic piece of property.

The nature of mineral rights as being separate to that of the ownership of the land itself lends itself to disputes. A perfect example is the following news story:

There is a dispute between landowners and the state of North Dakota over who owns the mineral rights to the oil, gas etc. that lays beneath the land on the banks of the Missouri River. At issue is ownership of the "shore zone" -- the land that's between the normal high- and low-water marks of the river. Historically, the state has owned the land below the high-water mark, although adjacent landowners have often used it for grazing and to gain access to the river. Click here for the entire story

The title issues presented by mineral rights are evident.  When investing in a transaction in areas that may have potential mineral rights issues it is important to be certain that the appropriate mineral rights searches are complete and all rights are accounted for.  In certain states, a separate 100 year mineral search must be conducted in order to insure over potential mineral rights interest.  Having a title agency familiar with the various state mineral rights and search requirements is imperative to fully understand the right, or potential rights, that make up the property you are purchasing.

Mineral rights are just one of the many state or region specific title and land issues that even a savvy investor may not be familiar with. It pays to work with a title agency like Riverside Abstract who has a deep understanding and a wealth of experience in dealing with mineral rights issues to ensure that the deal closes without a hitch.

Got questions about "Mineral Rights" or other Title topics? Click here to ask an expert and get the answers you need.

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