Understanding Mineral Rights and How a Property’s Value is Affected

By Fabi R. Gomes | May 20th, 2019

Mineral rights dictate who possesses the right to explore, develop, extract, and market any subsurface minerals such as natural gas, oil, coal, precious metals, non-precious or semi-precious metals, and other solid materials from a property. In most countries, only the government can own and benefit from these rights, but In the United States, property owners can hold and own subsurface mineral rights. As a result, owning a piece of land does not necessarily mean you own the rights to the minerals beneath it. Homeowners should be aware of the legal definition of mineral rights and how these rights can influence the value of a property, when applicable.

Like other property rights, mineral rights can be bought, sold, leased, and transferred in agreement with state and federal law, either jointly with surface rights or individually. If properly assembled, a mineral rights lease can be lucrative for both the landowner and the extraction entity. The mineral rights lease can also ensure that any extraction activity is being conducted safely and in a naturally subtle manner.

As a mineral owner, it’s imperative to educate yourself about the value of your property. A basic understanding of mineral rights can be critical to evaluating your property. One common misperception occurring when considering value is the idea of the split estate— the separation of surface and mineral ownership. This concept causes many landowners to not even realize that their homes, businesses, or ranches are subject to the mineral rights of third parties. Another form of split estate ownership occurs when the federal government has taken mineral rights.

One way to appraise your property and understand the possibility of mineral expansion is to enlist the professional services of a geologist, mining engineer, or other mineral resource specialist. These professionals can evaluate your land to recognize likely mineral deposits beneath the surface and the probability of future mineral development.

Careful buyers and owners today begin with a valuation of whether there is potential for mineral development in the area of the property. If that potential exists, an analysis to determine mineral ownership and the resulting impact should be conducted.

Mineral rights matters can become very complex quite quickly; please contact a real estate attorney with questions or for assistance. If you’re looking into properties around the Hill Country area, contact one of our CBHarper agents.

Coldwell Banker D’Ann Harper, REALTORS®  can be reached at (210) 483-7581 or pr@cbharper.com and has been an affiliate of the Coldwell Banker franchise system for over 30 years. Visit our Facebook page, Blog, and YouTube channel for supportive content and articles.

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