Real Estate Questions

[HorseGal]

I contacted a realtor about some land my DH and I are interested in. Its 21 acres, lots of trees and the right type of terrain we are looking for, right price, and in an area we are interested in. I asked the realtor about access to the property, power, and timber rights. Today he emailed me back answering all my questions, power is to the property line, there is a dirt road to our property from the county road, we will have to plow at times, but its pretty much year 'round access. We have full timber rights but on 49% mineral rights?? Huh?

What exactly does that mean? That if we find something we only get 49% of the profit from it? I've never talked with a realtor before so I have no idea about these things lol. I did ask about a perc test but he forgot to answer that question.

What other questions should I ask?

[rambler]

Originally Posted by HorseGal

there is a dirt road to our property from the county road, we will have to plow at times, but its pretty much year 'round access.

I can't help with your main question, but what does this part mean?

Is the dirt road govt maintained (by county or township, on a govt eternal easement?

Or is this a private road on a private easement, which means you maintain the road, but other people own the land it is on, and occationally 'issues' develop if others want to use the road as well to get to other property in the area, or you & the land owner see things differently.....

--->Paul

[Boleyz]

The land I live on has natural gas under it. It used to have coal also, but that's been strip-mined. I bought this place without ANY mineral rights.

The folks who owned it have sold a couple of pieces of what used to be a large family farm. I bought a piece (4.5 acres) to build a house on.

They have a gas well just over the hill which taps the gas under my land as well as the gas under theirs. If they had sold me mineral rights, then they would have had to allow me to run a line to the well and tie on to the natural gas. That would have been great for me...free gas.

In order to insure that they always have free gas, when they sold the pieces off the main farm, the deed had a stipulation that mineral rights were not included.

Basically what that means is that I own everything on TOP of the ground, but they own everything UNDER the ground.

However, by law, they can't come on my place and set up a new well or start mining coal without adequetly compensating me for any inconvenience or mess they make. Basically, if they tear up what's on top of the ground to get at what's under the ground, they're tearing up my stuff to get to their stuff and so they have to pay me.

I'd say that there is something under your place of value. If you're getting 49% of the mineral rights, then that means the seller is reserving 51%. That gives him the controlling interest over the minerals, but it looks like that if he decided to mine or drill your place, you'd get 49% of whatever came out of the ground.

Basically, you're buying a 49% interest in whatever minerals there may be there.

If I was you you, I'd find out what's there and also find out if the owner has any plans of ever mining it out.

Sometimes on old farms Grandpa had a deed restriction in his will that the family could never sell the mineral rights, or in your case, never sell controlling interest in the mineral rights.

It could be just as likely that the owner won't sell controlling interest in the mineral rights to the place because he wants to make sure that the new owner (you) can't go in there and rip the place to shreds. He may have that stipulation, strictly because he is a conservationist and doesn't want any drilling or mining done next to the surrounding property.

A lot of times, here in the coalfields of Eastern KY, someone will go in and buy a small patch of ground and start up a small mining operation. The dirt, dust and runoff impacts a lot of the surrounding land, but there's nothing the surrounding owners can do about it. So, lots of times a small parcel will have a deed restriction on the mineral rights.

[Mike in Ohio]

Someone will need to do some research or explaining. Is it 49% of all mineral rights? I would find that odd.

Is it 49% of oil and gas rights? That might make more sense, particularly if the oil and gas rights were split off a while ago.

You might also look into your state laws and also case law for your state regarding mineral rights. If someone else owns 51% do you have any say in what may or may not be done?

Just a few thoughts.

Mike

[quietstar]

It might be a good idea to inquire about surface control which would be more important to me than the slim chance of receiving a windfall. Good luck...Glen

[texican]

On mineral rights, a person can sell, will, donate, give away, any percentage of the mineral rights as they deem proper. I own varying amounts of royalty under the properties that I own... and even more royalty under property I don't own.

If you own minerals, they may already be leased by someone else, if it's oil or gas. If they aren't leased, they will need to be, before the Oil/gas could be produced. You're acreage is too small for an oil/gas unit, as a standalone unit, (most 'units' are a minimum of 40 acres, more likely 640 acres)... and unless you have ~million bucks, it's difficult to actually produce the gas yourself (drilling/producing a well is an expensive proposition).

Boleyz... Don't know diddly about your state, but here in Tx, it's erroneously assumed that a person has to have mineral rights in a gas well, in order to get a free tap on the well. If you have land in a unit, and the wells christmas tree is on that property, AND if the original lease allowed free gas, that one household has free gas rights. My parents were on free gas, then off, then on again (first time was deeded free gas, but the well died... second time, different well, different unit, no gas rights, but the well was on their property).

Back to OP.... Odds are, even if they are drilling for gas in your area, the won't drill on your plot. I'd definitely lease the minerals... otherwise, they'll lease all around you, drill on the property next door, suck out all of the gas, and you'll get diddly. ~10 acres of minerals in a small unit can be anywhere from 50$ to 1000$/month.

[HorseGal]

Here is a C&P from the email the real estate agent sent me, I thought it might explain better:

The road off of the paved state highway is gravel and county maintained for about 2 miles and then it would be another half mile on a dirt road that you (and any other people that lived in there) would have to maintain. There are timber rights, but only 49% of the mineral rights. It borders National Forest on the back side and is nicely timbered. I would say it would not be very hard to get in and out year round. You definitely would have to plow snow from time to time in the winter, but that’s the case anywhere you aren’t right off a state or county road

So basically, I need to ask what type of minerals are under the ground, what the provisions are should something be discovered and what can the owner of the other 51% of the rights do to my property, is that the jist?

Also, I misread the email and it state that the power is about a 1/2 mile away. That's gonna be expensive isn't it? At this point we are just looking into it. It looks like a nice property for a good price.

[logbuilder]

I'm in WA too on the west side of the cascades. I don't know of any oil or gas wells anywhere near my place so I'm not concerned about mineral rights. Seems rather than make a big issue out of mineral rights, you need to be practical and see if there is any probability that it would become an issue. For me, it is a non-issue.

Robert

[Wolf mom]

Don't get side tracked by the mineral rights.... You NEED an answer about the land perking. It has to perk if you're planning on a septic. Cost's about $300.00 + here for a perk test & you will get a state certification. Make it part of the contract - have the seller pay, or negociate. BEFORE you buy the land. Get the answer in writing & the certification.

[Sand Flat Bob]

Also, I misread the email and it state that the power is about a 1/2 mile away. That's gonna be expensive isn't it? At this point we are just looking into it. It looks like a nice property for a good price.

The cost to get power run 1/2 mile could easily exceed the cost of the land. You need to check this out before you commit to buying the land. I just had a neighbor run a electric power line less than that, and it cost over $10,000, plus he had to clear an easement to the ground so the power company could have access with their equipment. Can be a big issue. Talk to the Utility serving the area.

Bob

[Hoop]

The property easement on this land and electrical service are both troubling. Very troubling.

The 1/2 mile private road will undoubtedly be your worst nightmare. First thing you have to do is examine the property. This will tell you volumes. Now imagine the month is December and you're in the middle of a snow/ice storm. Is this the type of road you'll want?
Then find out if the easement is actually on the deed and what specifics are spelled out. If the easement is not recorded on the deed, it means you have NO EASEMENT. Don't take anyones word on the easement. Go to the register of deeds office at the county courthouse and ask to see a copy of the deed.
Then, assuming the easement is in order, find out how many other people you'll have to share this road with.
Maintaining a 1/2 mile private road can be your worst nightmare. The more people involved, the worse the nightmare. One persons idea of a properly maintained road is being able to drive in/out with a bigfoot type truck....in July. Other people may think the road should be capable of driving a Buick Lesabre in/out without getting it dirty......in December. There will never be complete agreement on what constitutes "road maintenance" as long as more than 1 person is involved.
Know that funds for group maintentance of the road will be a never ending problem. Unless there is something in writing regarding 100% of the road users, which specify all the conditions of road maintenance, assume the worst.
Also expect to pay nearly 100% of all road maintenance costs. Other landowners will be absentee owners, drug addicts in jail, white trash without a dime to their name, or tightwads unwilling to spring for costs. Assuming you actually wind up with neighbors that are responsible, look for at best 1/2 of them to actually kick in for road maintenance costs. They will complain incessantly before finally writing the check.
Know everything there is to know about "shared roads". Most are nightmares. Some are tolerable. If you still want the property, go ahead & buy. At least you'll be an informed buyer.

The electrical service is troubling as well. Don't assume that road easement equates into an electrical easement. These are separate things. Running electrical service around here is approx $3.50 per foot.....and up. If you desire electrical service, first check to see if a utility easement exists and then find out how much it will actually cost to have service run in. Expect none of the neighbors to kick in for costs, but they will undoubtedly tap into the line afterward, costing them only a few dollars.

[citilivin]

You need to find out how the minerals can be extracted. You don't want property that may be stipped mined.