Whether you plan to sell your property or simply figure up the value that your land has, determining the value of the mineral rights in your land is not as easy as it might seem. Luckily, there is an easy way to determine the value of minerals in your ground, which can help boost the […]
You can sell or lease the rights to the minerals beneath your land without selling the surface. This allows you to make money from your land without selling your home. You’ll get more from your lease or sale by following these guidelines and tips.
The term mineral rights refer to the right of an individual or organization to explore and or mine the elements, minerals, natural gases and liquids, such as oil on or below a parcel of land’s surface. The owner of the mineral rights may also bequest, give, hold, lease or sell them.
An owner may also offer partial or full mineral rights in a transfer. In a transaction, the owner may transfer rights to the following:
In most countries, mineral rights belong to the government. In a few countries, including the US, individuals and organizations may own mineral rights. Complete, private ownership of both mineral and surface rights constitutes a fee simple estate. State laws govern real estate transactions, including mineral rights. For example, mineral rights in Texas, a major oil & gas state, are governed by the Railroad Commission. Both the federal and state government have laws relating to drilling and mining of commodities and minerals. With the purchase or lease of mineral rights, the buyer or lessor also obtains rights of entry and exit to the property.
No set price exists for mineral rights. The price of rights varies dependant on the minerals or commodities obtained, the buyer, seller, and their attorneys. It depends upon whether a lease or sale takes place. In a lease agreement, the lessee often receives royalty payments from the mineral extractions. It’s common for the proceeds from the mineral rights (lease plus royalties) or sale to exceed the surface rights value.
Don’t immediately sign any lease or sale agreement or offer. Take it to an experienced oil and gas attorney. Your attorney will help negotiate the best deal for you.
Start by documenting the available reserves beneath your land. This usually requires hiring a geologist. Once you have an idea of what lies beneath the land parcel, you can calculate its current value. This provides your attorney a starting point for negotiations.
You might decide to auction the rights to your minerals. This drives competition between rival mining or oil companies and can increase the sale amount.
Your lease or sale document should cover more than just the sale or lease price, or royalties. It needs to specify methods and location of egress and ingress, the way of life of the surface owner during exploration and mining, protections for the surface owner’s home, other structures, driveways and roads, and other property, such as crops or livestock.
Leasing or selling your mineral rights provides a method of earning money from your land while still using it. Check your state’s geological survey to learn what, if any, commodities or minerals may lie beneath your land.
Frequently Asked Questions from Mineral Rights Owners A mineral owner can extract, lease, or sell minerals discovered below the surface of a specific piece of land. A title will define what the rights consist of all. It can be all the minerals under the ground or be restricted to defined minerals. The most common minerals […]
If you are a landowner, you tend to prefer to maximize the profitability of your property. One of the ways you can do this is by leasing out parts of that property to people to build on. If there are natural resources under the land, you can lease some of it to a physical energy […]