Establishing Mineral Rights

Posted By on Apr 3, 2014 | 0 comments

If you have property in certain parts of the US that are known to yield profitable quantities of valuable minerals, oil, and natural gas, you may want to consider selling mineral rights. According to The Mineral Auction website, speculators are willing to buy these rights at good prices even if a property is non-producing in case it later yields the mother lode. Before you can do that, however, you need to do some digging around to establish whether you are the rightful owner of the mineral rights.

It is not enough to have ownership of the surface land. In the US, land owners can own the rights to anything that may be found under their property, but these rights can also be severed from the main land title. So just because you have a title to the land does not mean you own the mineral rights. You need to do what is called running a title, which is basically backtracking the history of your own title back to the original owner, much like tracing the lineage of a dog or horse.

The easiest and cheapest way to do this is to first check the land records lodged with the office of the county clerk, which is typically found in the vicinity of the courthouse. Checking the land records yourself is free although it can be difficult to search for the right tract or grantor/grantee index book, especially if you are not sure about the legal description. The index book will only tell you where these documents are, not the actual records themselves.

Your purpose for this is to establish a chain of title, which is a sequence of records documenting the transfers of ownership for your property, which should also include a record of the mineral rights at the time that it was severed from the surface title. Be on the lookout for any mention of mineral rights being reserved by the seller as this will signal a severance of the titles.

You may also need to check the records lodged with the court clerk for any stray record that is not in the county clerk’s office such as divorce decrees or mortgage agreements.  Even then, there may be gaps in the records, and this can be bad news if you are bent on selling mineral rights, because this can cast doubt on the clarity of your ownership.

You can hire an abstracting office to reconstruct the chain for you and provide you with a take-off list which you can then use to find the records themselves and make copies, but you will need to pay them for the service. You can also ask them to track down the actual records and make copies for you, but that will be even more expensive. However, it may be worth it in the long run as it is not at all easy to run title, and may take more time than you can afford.

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