When you are purchasing a property, there are many important considerations involving the house above the ground and the land immediately below the house. In some cases, there are also important considerations that can be found even further below the surface. Some properties may have considerations involving their oil, gas or mineral rights (“subsurface rights”). The main example of this to be aware of is when subsurface rights are owned by a third party.
When purchasing, how will a buyer know if someone else actually owns the subsurface rights of the property?
If a buyer is purchasing a new construction home, there is a Florida statute which requires disclosure if the seller of the property or an affiliated entity has previously severed or retained, or will sever or retain any subsurface rights to the property. Before executing a new home purchase agreement, it is important to have this agreement reviewed for this type of disclosure so that the buyer can make an informed decision on their purchase.
If a buyer is purchasing a resale home, then such reservations of subsurface rights may be found in the previous deed or recorded documents and will also show up on the title commitment as an exception to the title policy. Discovering that there are subsurface rights owned by a third party is not necessarily a deal breaker. It is important to review the chain of title and the reservation of rights to see if perhaps there is no actual right of entry to retrieve what is under the property, or if the right of entry has expired through operation of law before making the decision of whether or not to purchase the property.
It is also important to note that owning the subsurface rights to a property as well as having a right of entry still does not necessarily mean that the owner of those rights can exercise their rights. Oftentimes the zoning of the property does not allow for mining or drilling activities. It is important for a potential buyer who desires to take advantage of what may be under a property surface to do their due diligence to ensure that they will actually have the right to use the property as they intend to.
If you need assistance understanding how subsurface rights may impact you or your buyer, please contact your local real estate attorney.
Berlin Patten Ebling, PLLC
Article Authored by Jessica Featherstone, Esq. firstname.lastname@example.org
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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