It’s been twenty years since Joe Dirt bought a ranch in Central Florida. On an inconspicuous Saturday, he gets a knock on the door and a man dressed in suit and tie announces that gold has been found on his property! Joe is ecstatic, having hit the lottery, makes plans to retire early and travel the world. However, to his dismay, he finds out that the gold isn’t his – in fact, he owns no rights to it. How can this be? It boils down to his purchase twenty years ago. Too often buyers are so focused on the home and furnishings they are purchasing, and may not consider what lies beneath…
Mineral rights are ownership rights to natural resources, such as oil, natural gas, metals, coal, etc. located beneath real property. The mineral rights can be separate from and are not always held by the same property owner. This means that a prospective homebuyer can purchase property and have surface rights, and own the structures and/or improvements above ground, and someone else can own the rights to the natural resources beneath the property.
Generally speaking, surface and mineral rights are held concurrently in a unified estate. In this case, the record owner to the property owns both the surface and mineral rights. However, the estate can be severed and the mineral rights can be sold separate from the surface rights. In these instances, the property owner does not own the mineral rights, if any, beneath their property. Further, the mineral rights owner has the right to access the property, bulldoze the home, drill for and profit from the natural resources without the property owner’s consent.
What should a prospective homebuyer do? A prospective homebuyer should be prudent in checking to see if their purchase is subject to existing mineral rights to the underlying property. The existence of mineral rights can be disclosed to the buyer by the seller, revealed in a title search, or obtained through the public records. If someone has valid mineral rights to a property, it could potentially be considered a title defect and render the property unmarketable. To cure this defect, the mineral rights should be terminated or the right of entry by the mineral rights owner should be extinguished. Oftentimes, but not always, the right of entry has been released by Section 270.11, Florida Statutes. If the right of entry has been released or has otherwise been terminated, the right to come onto the property has been lost, rendering the mineral rights harmless. It is recommended that the prospective homebuyer consult with a local real estate attorney to ensure that any mineral rights issues are addressed prior to closing.
If you have any questions regarding mineral rights, or any other real estate related questions, please do not hesitate to Contact your trusted local real estate attorney.
