For example, if you are looking in an area dotted with oil rigs, if natural gas drilling is common around that area or if the property is near coal mining operations, you will want to know who owns the mineral rights in case the person claiming mineral ownership wants to remove the minerals from the property in the future.
In most countries, the government owns mineral resources; in the United States, however, ownership of underground minerals was originally granted to landowners. Consequently, there’s an unusual situation in America where surface rights can be sold separately from mineral rights.
Because the legality of mineral rights can be tricky to understand without a legal degree, you might want to hire an experienced attorney to help you trace the deeds back to the original mineral property rights.
So, if oil is found on a property, who owns the rights to it? Here are some things to understand.
First, know the difference between mineral rights and surface rights. Mineral rights are the rights to use a property for the minerals it harbors, such as oil, gas, gold, silver and any other underground deposits.
Surface rights are the rights to farm or build on the property. When sold together, surface rights and mineral rights are known as “fee simple,” but when they’re sold separately at any point in a property’s history, the rights have been “severed.”
Also, mineral rights might depend in part on in which state you reside. Louisiana, Michigan, North Carolina, Ohio, Texas and Wisconsin require disclosure of severed mineral rights during a property’s sale; Colorado and Florida are also currently considering disclosure location. Other states don’t make it so easy, and some research will need to be done.
Start by finding the deed to the property at the local deed registry. Read through the deed to see if the rights have not been severed; if that;s the case, then they’re fee simple and ownership belongs with the surface rights.
However, if the deed doesn’t show that the mineral rights are owned, you’ll have to go more in-depth. Visit the county clerk’s office with the property’s legal description from the deed, and schedule a time to search the county records (this might cost a fee).
Then, work backward from present day to create a chain of title (a sequential record of documents showing how the mineral rights have exchanged owners over time). The first deed after the mineral rights and land rights have been severed will plainly state that mineral rights are not included.
From there, follow the mineral rights chain of title to its current owner. This step of the procedure might be murky and hard to understand, so it’s in your best interest to hire a mineral rights attorney, if it gets hairy, for the fine print and to make sure that you’re not missing anything.