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  #1  
Old 12/09/05, 09:02 AM
 
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Buying a property without mineral rights?

I was just reading that other post about Rocky Mountain Timberland and that got me to thinking:

I was always taught never to buy property without mineral rights and sufficient deeded water rights. But it seems like people do that all the time. So is it a safe practice to do so? Has anyone ever had their land developed from underneath them? Their water taken away?

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  #2  
Old 12/09/05, 09:26 AM
 
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In the state I live in this issue has been tested in the state supreme court more than once and the mineral rights owner has come out on top every time. I live in an area where there is lots of oil and gas activity and know of several cases where the surface rights owner owned no mineral rights. The mineral owners can come in and do anything they want to wheather you like it or not, they will make an offer for damages and if you refuse to accept they can go ignore you and tell you to sue them, it's a no win situation for the land owner, the time and cost to fight it is not worth it. I would never buy a peice of property for a homeplace without the mineral rights or at least 1/2 the mineral rights.

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  #3  
Old 12/09/05, 09:28 AM
 
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On the other hand from a seller's point of view, would selling the property with the mineral rights make the property easier to sell and possibly more desirable? Our acreage with mineral rights included didn't sell this year even with gas well exploration happening on adjacent property. I can't imagine not owning the rights, and then having rigs somewhere on your land without receiving compensation. I will be watching the responses.....

Nappy

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  #4  
Old 12/09/05, 04:36 PM
 
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I'm going to bump this, surely someone has had an experience with this? If not, maybe it is a good deal!

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  #5  
Old 12/09/05, 07:12 PM
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The mineral rights are worth many times more than the surface rights. You are automatically disqualifying a large percentage of the countryside, if you insist on having surface and mineral rights both.

And even if you own the mineral rights, they still might be leased to someone with development rights. The only thing you escape by owning minerals, and not having the minerals in a lease, is a huge monthly royalty check. You'll still have to deal with all the surrounding development...it just might not be on your place...

About the only way you'd be able to find property with mineral rights, is for it to be in a place where oil and gas have never been discovered, or in one of the geological formations which forbid the existence of petroleum deposits... Or, you might find a fool willing to give up a gold mine... but those rubes are getting harder and harder to run up on.

Would you sell mineral rights, that bring in more than the land is worth, each year? I wouldn't, and won't.

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  #6  
Old 12/09/05, 07:39 PM
 
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I guess my concern was buying a piece of property in Montana and having someone come in and tear up my land and my home because they owned the mineral rights.

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  #7  
Old 12/09/05, 07:49 PM
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Elle,
a lot of land in Mt is split estate, you own the surface, and either the govt. or a timber/railroad holding company owns the minerals.

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  #8  
Old 12/09/05, 07:51 PM
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I have owned properties that had easements on them. Sometimes for a road, or for power, or a water pipe. But I have never had a property that did not include mineral rights. Two different properties in California we had did not include the water rights {meaning that water running down from the mountain, did not truly belong to you and once it flowed into a canal it was owned by others hundreds of miles away}.

My place now has a 2 foot dia fuel pipe running across it. It goes from the ocean, up to a closed down air force base [Loring]. 200 miles of fuel pipe for pumping deiseil. Not it has been flushed and is filled with high pressure Nitrogen [or so they say]. It cuts right through my forest.

But otherwise I own all mineral rights. I even own full access to the riverwater that runs along one property line.

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  #9  
Old 12/09/05, 07:51 PM
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How do you know if you own the mineral rights? We moved from our McMansion and I know that we didn't own the mineral rights because it plainly appeared in our title document. However, I have read through our title on our farm and I can't see anything about the mineral rights. Would there be specific verbiage to look for? We have the history of the land/house since 1860 when it was deeded from the government. Would there be a point where it says that the property was sold but not the mineral rights? Would the title indicate who does own the rights if, in fact, we do not?

Thanks for the info in advance...

T

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  #10  
Old 12/09/05, 08:01 PM
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Around here its very hard to find property that will allow you to also buy the mineral rights. I looked into it, but its all owned by the same family from ages and ages ago.

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  #11  
Old 12/09/05, 08:15 PM
 
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Quote:
Originally Posted by Terre d'Esprit
How do you know if you own the mineral rights? We moved from our McMansion and I know that we didn't own the mineral rights because it plainly appeared in our title document. However, I have read through our title on our farm and I can't see anything about the mineral rights. Would there be specific verbiage to look for? We have the history of the land/house since 1860 when it was deeded from the government. Would there be a point where it says that the property was sold but not the mineral rights? Would the title indicate who does own the rights if, in fact, we do not?

Thanks for the info in advance...

T
Boy that's a good question! Just because mineral rights are not on the contract does that mean they are implied or that they are not included! Did you do a title search when you bought the house?

We need a real estate lawyer on the board!
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  #12  
Old 12/09/05, 08:18 PM
 
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Quote:
Originally Posted by Terre d'Esprit
How do you know if you own the mineral rights? We moved from our McMansion and I know that we didn't own the mineral rights because it plainly appeared in our title document. However, I have read through our title on our farm and I can't see anything about the mineral rights. Would there be specific verbiage to look for? We have the history of the land/house since 1860 when it was deeded from the government. Would there be a point where it says that the property was sold but not the mineral rights? Would the title indicate who does own the rights if, in fact, we do not?
T

Your abstract might not show when the mineral rights were sold off. Generally speaking there is a point where the mineral rights ownership is split from the surface rights and then possibly further divided. The abstract for the mineral rights can be as long or longer than the surface abstract and so is usally not included in your basic abstract whatsoever. If you are lucky they might stamp it with "mineral rights omitted" just so you know. Regardless, the easiest way to find out is to call the county and ask.
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  #13  
Old 12/09/05, 08:25 PM
 
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hunh. I'm going to see if I have mineral rights on my quarter acre. Just for curiousity. I live in a group of 20 houses, all on an old farm. The farmer's 3 sons also live on the road and own 9 of the houses between them.

Not that I live in a big coal or gas area but there is gold in some parts of Virginia!

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  #14  
Old 12/09/05, 08:31 PM
 
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My opinion: never, ever buy any land without full mineral rights. Why even take the chance that someone will come in and ruin everything you've done? IMO, that'd be no better than renting.

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  #15  
Old 12/10/05, 08:54 AM
 
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Quote:
Originally Posted by ellebeaux
I guess my concern was buying a piece of property in Montana and having someone come in and tear up my land and my home because they owned the mineral rights.
Hi,
I live near Bozeman, MT, and mineral rights have been in the news around here a lot. There is a very pretty area to just to the east of Bozeman as you go over Bozeman pass called Jackson Creek that is mostly 20 to 80 acre parcels. A long time ago the mineral rights were sold off, so the property owners don't have mineral rights. An oil outft called J M Huber bought the mineral rights for about 20,000 acres of this land and want to develop coal bed methane. The residents protested, and after a few hearings, the county council voted to not allow the coal bed methane development. J M Huber is taking the county to court, and its anybodies guess how it will come out. I'm sure that if you Google for Jackson Creek Coal Bed Methane that you will find more details.

Its my understanding that the way this has typically come down in MT is that the owner of the mineral rights must be given reasonable access to develop the minerals he owns, but that he can't cause excessive damage to the property. That kind of language obviously leaves a lot of room for interpretation, and cases have gone both ways. I don't believe they would ever allow intrusive mineral development in a residential area with homes on (say) half acre lots, but for 20+ acre parcels its much more iffy.

We tried to check on whether we own the mineral rights to our property, and could not even find out. Selling off mineral rights does not show up on a regular title search or in your title property insurance. Finding out involves a separate search which is considerably more expensive than a title search.

All that said, I don't think its really a very common problem in MT.

Gary
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  #16  
Old 12/10/05, 09:53 AM
 
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Alaska Permanent Fund

In Alaska the Mineral right belong to the state of Alaska. As a resident of Alaska (there is a lenght of time residentecy requirement- Just a couple of years ect) I am a part owner of all the mineral rights in Alaska.

The state is financial supported by the royalties. It was set up that a part of the surplus was tucked away and invested and a portion of the money is given out to each Alaskan resident. The yearly amount of the PFD (check your IRS tax for for a Special information for AK residents mentioning the PFD) The amount has varied from $500. to $1,064.

Alaska, being on of the more rescent state's for Fathers saw that in many states the mineral rights ended up in hands of just a few "families" that got super rich. Being that Alaska was seen as having too small of a population to truly support it self via taxes- Schools cost money, ect. It was choosen to use the mineral right to create a State where the cost of goverment would not create an imposidable demand on the residents.

In Alaska it works. New people who come to the state do get upset that they must wait the years to get the check but they must accept that while they are waiting the cost of police, hospitals schools, clean water, roads. fire protection is the benifit.

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  #17  
Old 12/10/05, 01:43 PM
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You not going to buy much rural land in ohio if you want mineral rights. Those were sold off long time ago.

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  #18  
Old 12/10/05, 02:43 PM
 
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This discussion on mineral rights is really appropriate and timely for DH and I. Just this afternoon a representative from an oil and gas exploration company came to our door and sat down at our table to inquire about leasing our mineral rights. "Everybody's doing it" around us, so why not? Now that the real estate listing on our property is over, we will benefit financially until we sell. Whether or not anything is found, when we do sell, the mineral rights will possibly be included in the sale.

Nappy

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  #19  
Old 12/10/05, 03:46 PM
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Quote:
Originally Posted by antiquestuff
My opinion: never, ever buy any land without full mineral rights. Why even take the chance that someone will come in and ruin everything you've done? IMO, that'd be no better than renting.

Sounds like you're a real expert on real estate, AS. Good luck finding ANY land at ALL with full mineral rights. With your attitude, unfortunately you will probably never own land. BTW, diagonal and horizontal drilling may be going on underneath you right now.
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  #20  
Old 12/10/05, 04:18 PM
 
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In WA and CA, it's a lucky few who find land with any surface water rights. Around here, land is even being sold without underground water rights (which means you can't drill a well). Water rights are typically owned by the big cities or the Indian tribes. We have 2 creeks running across our property - one runs year round, the other dries up in the summer. We hold surface water rights to the creek that dries up, along with subsurface rights for a well. Paid an extra pretty penny for those surface rights, too.

Also realize that if you don't use your water rights for 2 years consecutively, you lose them. Even if it's bare land you're not currently living on or farming, if you have water rights on it sink a pipe in or turn on the hydrant at least a couple times a month. Also, keep any and all documentation you have showing consistent use of that water - just being able to show that an orchard was present on the land 100 years ago and had to be irrigated helps when the state comes around with questions.

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  #21  
Old 12/10/05, 05:53 PM
 
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Quote:
Originally Posted by SolarGary
All that said, I don't think its really a very common problem in MT.

Gary
www.BuildItSolar.com
Thanks Gary, I guess I see those ads in Countryside magazine for acres of land in WY and MT and wonder if they are really as good of a deal as they seem. I lived in Billings for 4 years and fell in love with Montana so my long-term goal is build off-grid somewhere near where I can make a living. Missoula or Bozeman. Red Lodge? So I was thinking to buy some land now and just hold onto it until I could afford to move out there. But I didn't want to show up and find it all dug up!

I'll look up that mining issue - that's VERY interesting. I'll be curious to see how that all turns out.
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  #22  
Old 12/10/05, 08:47 PM
 
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Quote:
Originally Posted by SteveD(TX)
Sounds like you're a real expert on real estate, AS. Good luck finding ANY land at ALL with full mineral rights. With your attitude, unfortunately you will probably never own land. BTW, diagonal and horizontal drilling may be going on underneath you right now.
Well, in your area maybe, but in other states it is easier to do so.
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  #23  
Old 12/10/05, 09:40 PM
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My place in Ca does have water 'issues'.

My property in Ct, includes it's mineral rights.

As does my property in Me. though our place in Me has a long fuel pipe buried and running across it [it goes from Searsport Me to Loring].

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  #24  
Old 12/11/05, 08:14 AM
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You need to know what rights were given away and what can be done with those rights. I have no mineral rights on my place. Oil and Gas are the minerals being harvested in my area. The rights given on my property was for right to the minimals, NOT for rights for any surface access. Those are seperate rights. They have no rights to put an oil well on my property, they have no right to even be on my property. I can negotiate a seperate rights if I wanted them drilling on my land but they dont have it by default.

KNow what rights your given or have been given.

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Old 12/11/05, 09:21 AM
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Quote:
Originally Posted by Gary in ohio
You need to know what rights were given away and what can be done with those rights. ... Those are seperate rights. ... they have no right to even be on my property. I can negotiate a seperate rights if I wanted them drilling on my land but they dont have it by default.

KNow what rights your given or have been given.
Good ideas!

I would throw a small monkey wrench into it though.

We have always had 'emminent domain'. anytime that a developer can convince a judge that it would serve a 'higher purpose' to take your land and do something else with if. I have seen examples of 'emminent domain being used for many years.

Recently their have been new arguing in the courts about it, but the rulings have been to 're-affirm' and even more solidly the procedure for using eminent domain to take your land away.

To argue that ripping up an open pit to make greater access to minerals: would employ more people, would bring greater tax flow to the city and county, would lessen the nationwide prices for those minerals and would thus stimulate the nationwide economy, I would think that any judge in the nation would hand over your land in a heart-beat.

I dont mean this as an attack, judges would give away my land too.

Judges gave away my grandfather's farm back in 1970, so a 'vacation homes' developement could be built in it's place.
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  #26  
Old 12/11/05, 10:03 AM
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You aren't going to find any land out west with mineral rights unless you are buying an actual mining claim. They were all sold out years ago. Especially if you are buying a property in a development. Most of these out west were once large ranches. When bought by a developer..the mineral rights were sold (to pad the pockets of the developer even more ). Keep in mind if you are buying something in the neighborhood of 35 acres or less, more than likely it is in a development.

As to water rights. You have the right to obtain a well permit and dig a well, depending on the size of your acreage if you can use it as a domestic well (for household use only) or one that you can actually use to water livestock. (In Colorado you need min. 35 acres for this type of well)
If you have running water (stream, creek, river) You can buy water rights in "shares" if you can find someone to sell them to you. You can then use that water for irrigation or whatever.

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  #27  
Old 12/11/05, 11:52 AM
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The issue of mineral rights isn't as simple as it sounds here. Usually there are a few types of 'minerals', you have coal interests, oil & gas & others (usually including ores). If you own surface and someone else owns minerals, you continue to have rights. You have the right to be compensated for access to minerals through your surface, you have the right to proper and complete resotration of your land after the play is made and you are entitled to annual rental on the demised lands. It's nice to own your minerals but if you don't, make very sure you know your rights as a surface owner before you allow someone to just come onto your land to do as they will, you'll be offered a contract, read it carefully and know what your rights are in. Most mineral plays can be shut down fairly quickly in the event the lands are historically significant, ecologicaly sensative and a few other reasons. Look into all matters before you sign anything or accept the word of anyone as fact.

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Old 12/11/05, 02:58 PM
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  #29  
Old 12/14/05, 07:49 PM
 
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"Just this afternoon a representative from an oil and gas exploration company came to our door and sat down at our table to inquire about leasing our mineral rights. "Everybody's doing it" around us, so why not?"

I'd lease it in a heartbeat! If they're after you to lease it you have the mineral rites! They do their research; don't make offers to folks without the rites. I had a place that I sold a few years ago; leased it for gas twice; money in the bank! When I sold it I retained half the mineral rites; buyer wouldn't buy unless I let him have half. no way was I letting go of all of them though!

Lew

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  #30  
Old 12/15/05, 08:27 AM
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I can only speak based on my personal experience. We own all mineral rights except for a specific deep coal seam (It's about 600-800 feet below the surface). We didn't know who the current holders were for those coal rights.

If you had a fairly recent title search done then it shouldn't cost you much to have a title search done on the mineral rights. It cost us $150 to have one of our parcels searched (The coal rights were split off before the land was subdivided). We are currently looking into buying back the coal rights for 154 acres (that was the size of the farm when the rights were sold). This is part of a "parcel" that includes 1,000 acres of land and 16,000 acres of coal rights. They said I was the first person that has contacted them and if I'm at the edge of their holding we might be able to work something out.

It also helps to know the state regulations. In Ohio you need at least 20 acres to site a gas or oil well and there are additional restrictions as far as setbacks from property lines, etc. We know that our gas (primarily) and oil rights are worth something but we don't feel any hurry to lease. I'm more interested in free gas than the royalties and until we are at the farm fulltime we don't really need it.

Mineral rights are not a generic. One parcel might be very valuable because there is something there. Another parcel might not have any minerals worth talking about.

I guess my attitude is that if you buy property and someone else owns the mineral rights then you need to respect their ownership rights as much as you expect them to respect yours. Also understand that many mineral rights are held by corporations and their timescales are a little different than for individuals. They might have bought those rights 10 years ago planning to do something with them 20 years in the future based on their capital development planning.

As usual, just my 2 cents worth.

Mike

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