Mineral Rights Contract
The United States permits separate ownership of surface and mineral rights, a phenomenon called a "severed estate." While both surface and mineral rights were at one point held by the same owner, that original owner may have sold/leased the mineral rights to an interested prospector. Due to the possible complications that can occur as the result of a severed estate, it is necessary for the seller and purchaser to draw up a mineral rights contract.
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Assistance
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The key to a successful contract is to get the help of experts. Mineral rights contracts involve a great deal of nuances and involve knowledge of real estate, market value, geology and legalities. There is potential risk for both sellers and prospectors. The sellers risk permanent damage to their land, and the prospectors risk having contracts that do not allow them to effectively explore for minerals. By obtaining assistance from qualified experts in the area of mineral rights law, both the seller and purchaser can avoid the pitfalls associated with mineral leases, while reaping all the benefits.
Options
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A mineral rights transaction can involve all of the minerals beneath the property, or can be restricted to specific minerals. Sometimes investors will even acquire rights to minerals that they have no intention of extracting, as an investment they can sell or lease to someone else. Because some land surface disruption is inevitable in the process of exploring, a mineral rights contract should clearly explain how much surface access/disruption is permitted and what steps is the mineral prospector required to undertake to get the land back in original order.
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Benefits
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Landowners are often approached my prospectors interested in purchasing mineral rights on their property. In return of granting mineral rights the landowner will receive money. Similarly, miners might not want to pay full market price for expensive real estate that happens to lie above a potential mineral deposit. The landowner might not have the means to dig up and capitalize on those assets, or any interest in embarking on such an endeavor. In these situations, the two parties can come to a mutual agreement, one that will be spelled out in a mineral rights contract
Drawbacks
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When you purchase surface rights, you should research to find out if your land is already subject to a mineral lease, otherwise you may be bound by a mineral rights contract drawn up by a previous owner. When drawing up a mineral rights contract, it is important to explicitly state the duration, the minerals involved, and the surface access provided by the agreement. Find a knowledgeable mineral rights lawyer to assist you with all the nuances of a mineral rights contract.
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References
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- Photo Credit mineral image by Benjamin Herzog from Fotolia.com
