Following on from the article we wrote last month about the value of land where we touched on mineral rights, many of you got in touch with us skiing to explain more about what mineral rights are. In that piece, we made reference that you may or may not have expensive minerals under your land but we didn’t go into depth about what mineral rights are, and where homeowners stand on this issue. To help us get into it I caught up with a good friend of mine who worked mineral acquisitions for Ferrari Energy, and here is all you wanted to know about mineral rights.
What Exactly Are Mineral Rights?
Simply put mineral rights are the rights of an owner to what is beneath a certain area of land. The owner of these rights is allowed to dig under the ground and see what minerals there may be down there, and they also have the ownership of whatever they happen to find. These mineral rights can be bought and sold and many large scale companies in the oil, fracking and natural minerals industries very often buy huge areas of land and the mineral rights which they have.
Under Your Home
When you buy a home it is very rare that you will also own the mineral rights for the space underneath your home. There is nothing wrong with laying foundations into the ground below your home, this is widely accepted in construction and in mineral rights. If however, you were to find anything of value when you lay those foundations then it is important to recognize that they are not yours, as most homeowners only have what is referred to as ‘surface rights’ which is the surface of the land only.
Can I Buy Mineral Rights?
The simple answer is yes you can buy mineral rights if you so wish, and in most cases you will have to buy these from the government who own all mineral rights which have not been sold. The question really would be why do you want to? There are certain areas that have value beneath the ground of course, and if you fall into the category then you could most definitely look to buy the mineral rights with an idea to sell them to a larger company in the future.
Prices vary from state to state of course but there is generally a cost at the moment of $40,000 per acre when it comes to mineral rights that are bought from the government. If there is something of value underneath the surface then the government will tie a percentage of the commission into the deal for anything that is found.
If you are in any doubt about whether or not you do have the mineral rights below your property then check the land owners register to see if a previous owner has already purchased these rights and sold them on with the home.