Acreage property involves two levels of ownership – surface rights and mineral rights. Understanding the key differences and overlaps between these rights is crucial knowledge that every land buyer and seller must understand.
What are surface rights?
Everything on the exterior or upper boundary of the land is covered by a landowner’s surface rights. This includes all physical structures – your house, yard, garage, and barns and storage sheds. Access to water resources and other substances not too deep below the topsoil are often referred to as subsurface rights.
Ownership of surface rights includes the right to use the property for crop farming, as well as to build structures on it. You are also allowed to dig into the land to install underground storage tanks, wells, or septic systems.
What are mineral rights?
Mineral rights grant owners the legal ability to explore, extract, and sell naturally occurring deposits found beneath the surface. These deposits include oil, natural gas, coal, gemstones, and precious metals like gold, silver, iron, and copper. Elements like uranium and scandium are also covered by mineral rights.
Who owns surface and mineral rights?
In Colorado, ownership of surface rights is distinct from ownership of mineral rights. This means landowners can claim, use, and profit from the resources accessible on the topsoil, but they cannot directly profit in the exploration and extraction of the deposits beneath their property.
When surface-level acreage real estate is sold or leased separately from the mineral rights, this is known as a split estate.
According to state law, mineral rights are typically conveyed with the sale or lease of land originally owned by the government or a private owner, known as a mineral interest transaction. The landowner and the party with mineral interest agree to create a deed or a lease that determines the ownership of the mineral resources. Legal contracts enforce the transfer of these rights. All mineral rights transactions are placed on public record.
How do mineral rights affect surface rights owners in Northern Colorado?
Surface rights owners should be aware of the mineral rights ownership situation involving their property. For example, if an individual or business entity that owns the land’s mineral rights wants to build or place drilling and storage equipment on your private property to extract oil, they are legally allowed to do so. This party should be limited, however, to “reasonable use” of the surface – just a small portion of the surface-level property that is described in the mineral rights transaction contract.
For a surface rights owner’s protection, it’s best to review the property deed with your Realtor and a lawyer who is familiar with Colorado State mineral laws to ensure that the mineral owners abide by the restrictions and regulations that describe the extent of mineral extraction allowed and the clean-up efforts involved after extraction.
Resolutions to surface and mineral rights resource conflicts vary from case to case. However, it is common for surface rights and mineral rights owners to reach a compromise such that surface-level landowners can minimize the impact of the mineral removal operations on their property.
Learn more about land for sale in Northern Colorado with me, Claudia Hewell. Contact me for inquiries today at 970-672-6976 or Claudia(at)HorsePropertyDeals(dotted)com.