The ownership of surface and mineral rights varies worldwide
When buying any type of property, People may naturally assume they own everything on it — both above and below ground. However, many homeowners are surprised to find they don’t possess as much of their land as they initially thought. This can be a rude awakening.
The ownership of surface and mineral rights varies worldwide, such as some governments owning exclusive access to the mineral rights of all properties. In the United States, landowners typically own both unless they have chosen to sell them separately. In that case, the original owner would then only have rights to the surface land.
What Are Mineral and Surface Rights?
Mineral rights refer to the rights one has to the land and minerals beneath the surface, as well as the ability to extract and sell any resources found. This includes coal, oil, natural gas and precious metals. Natural gases have a variety of applications and are incredibly abundant. When present on a property, these resources make the land worth more than it would be without them. Owning mineral rights means homeowners do not need the permission of the surface rights owner to mine.
Mineral rights owners are also considered the dominant party of the two since, in many places, they can allow mining and oil companies to start extracting resources wherever they please. However, it is important to know what mineral rights mean in a particular location before digging away.
Each state has its own laws and regulations concerning what falls under mineral rights and may have different requirements for resources such as oil or natural gas. There may also be laws in place to protect surface rights owners from having their homes or other structures damaged or destroyed.
On the other hand, surface rights refer to the landowner’s rights to what lays on the surface. This refers to any property that resides above ground, which may include a home, farmland or other buildings. Surface rights owners can sell the property or transfer the title, but not to land to oil or mining companies, as this would be delegated to the mineral rights owner. If someone owns a property’s surface rights but does not hold the mineral rights, they may find that someone may come knocking to start excavating the land for its resources one day.
Different Options for Mineral Rights Owners
People who own mineral rights on a piece of land have different options as far as what they can do with them. Below is a condensed list of just a few popular options, though these are not the only ones available:
- Sell: Landowners may choose to sell their property completely and give up rights to a company that wants to extract the minerals and resources on the land. Keep in mind that going with this option means they will no longer have a say in the conduct of these companies on the property.
- Lease: Leasing mineral rights means extraction companies have a certain amount of time to complete their business. Leases can be extended if desired, but the lessee no longer has the right to operate on that land once the time is up.
- Property easement: In this situation, the owner retains the title to the mineral rights, but an extraction company or entity is essentially given permission to use the property.
In some cases, there may be no benefit to taking any of these roads if there is no profit to be made on the land. Even if property owners own mineral rights, some land simply doesn’t contain enough resources to be worth the expense it costs to extract it.
People may also not own mineral rights completely and instead share them with others. For example, someone who owns the entirety of the mineral rights for a piece of land may leave these rights to their children. If there is more than one child, then the rights would be split evenly among them.
How Do Mineral Rights Affect Property Value?
If someone lives in a big city or a neighborhood with homes built close together, mineral rights aren’t a huge issue, if at all. For those who live in a more rural setting, whether or not they own the land’s mineral rights is a much bigger concern. This is especially true if they live in an area where oil rigging and mining are common, or materials are abundant.
Owning mineral rights along with surface rights greatly increases the value of a property since residents now have complete control over the resources on their land. They can freely choose to lease the property to extraction companies or not, as those with mineral rights are considered the dominant party.
Know What’s Being Bought
Buyers need to research exactly what a land purchase will include to ensure they have access to mineral and surface rights. Owning both means landowners have more control over their property and also benefit if any valuable resources exist below the surface.
If buyers don’t research the property beforehand, then they may be shocked to one day learn they don’t have mineral rights, and an extraction company may come digging when least expected. Buying land that includes mineral rights is the best option since it increases property value and provides free reign over the resources underground. Being forewarned is forearmed, which is why potential landowners need to know exactly what they are investing in.
Emily Newton is the Editor-in-Chief of Revolutionized, a magazine exploring how innovations change our world. She has over 3 years’ experience writing articles in the industrial and tech sectors.