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Old 04-11-2012, 09:25 AM
 
3,271 posts, read 964,386 times
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Does a developer's sale of mineral rights to an energy company foreshadow fracking? | North Carolina | Independent Weekly

Quote:
For less than $300,000 you can own a 3,100-square-foot house and a quarter-acre of land in Brightleaf—but you will not own most of what lies beneath it. Starting at 501 feet below the surface, the mineral rights—ownership of natural gas, oil, geothermal heat, hydrocarbons, even water—belong to DRH Energy, a subsidiary of D.R. Horton, one of the nation's largest homebuilders.

For the past two years, D.R. Horton has sold the mineral rights—and the right to drill, mine, store and explore for them—to its Colorado-based energy company on at least 425 of its lots in Raleigh, Cary, Durham, Chapel Hill and other Triangle cities, according to deed records. Coincidentally, the transactions began occurring in the summer of 2010, around the time the push began to legalize fracking in North Carolina.

While common in other states, including Texas, where D.R. Horton is headquartered, the sale of mineral rights is new in North Carolina. Several title companies, real estate agents and other real estate professionals contacted by the Indy were unaware of D.R. Horton's activities or the assignment of mineral rights in general.

The Consumer Protection Division of the N.C. Attorney General's office is expected to address the issue, and the Horton case specifically, in its upcoming report to the Legislature about fracking, a spokesperson for the attorney general said. The report is due by May 1.

Given the issues surrounding hydraulic fracturing, this is a potentially disturbing development for homeowners in the affected areas. The article goes on to state that non-DR Horton owned lending entities including banks and SECU refuse to offer mortgages on properties where any part of the usage rights have been sold off previously, which severely impacts resale value.

Of course this begs the question why does a home builder also happen to own an energy exploration company, but I guess that's corporate synergy for ya. Sucks to be the poor saps who unwittingly signed away the ground under their feet for their Bluth model home.
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Old 04-11-2012, 09:47 AM
 
Location: Salisbury,NC
2,136 posts, read 760,393 times
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wow brings the ground you live on into question. How can a contract that gives away the ground under which you have a house built be underwritten by Bank or Ins. co.
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Old 04-11-2012, 10:01 AM
 
3,271 posts, read 964,386 times
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Originally Posted by Boss View Post
wow brings the ground you live on into question. How can a contract that gives away the ground under which you have a house built be underwritten by Bank or Ins. co.
That's it though, the only financial company that apparently will cover those properties is the mortgage lender subsidiary of DR Horton. Pretty much no third party bank will touch them. The current and subsequent owners are essentially forced to deal solely with the company store.
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Old 04-11-2012, 10:26 AM
 
Location: Salisbury,NC
2,136 posts, read 760,393 times
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So if fracking occurs the property owner has no recourse if there is:
1. a mineral which has value under there property (500 ft)
2. if a chemical or gas is forced up through their property, ruining the value.(ex. a sanitary sewer Leak may take years to come to surface)
3. If tunneling under the property causes a shift to grounds that home is built on.
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Old 04-11-2012, 10:48 AM
 
Location: North Carolina
2,657 posts, read 5,020,370 times
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The reason for concern

Fracking in North Carolina? (http://www.southernenvironment.org/cases/fracking_in_north_carolina - broken link)

Until I read about the toxic chemical component, I thought of this issue in terms of our previous residence in southern Illinois - once a large coal mining area. Subsidence and radon exposure was the boogey there. It was normal to shrug off the knowledge that under your home ran miles of coal tunnels.
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Old 04-11-2012, 10:53 AM
 
Location: Fayetteville, NC
1,484 posts, read 3,078,744 times
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They are now building in my market. I will be sure to make my buyers aware of the possibility. I would never buy a property without all rights.
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Old 04-11-2012, 04:21 PM
 
2,679 posts, read 2,120,108 times
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Was advised by my realtor in the mountains to make sure you have mineral rights beneath your land in all cases - coal, oil, gems, minerals, etc that may have been sold in times past and the company could come and dig it up at any time. Or they may not.
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Old 04-15-2012, 10:34 PM
 
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Default fracking

People havent even touched the fact of what fracking can do to the water supply of wells.
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Old 04-18-2012, 06:14 PM
 
276 posts, read 163,227 times
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I live in PA and have seen how the industry moves in. They promise jobs but most of the workers are from out of state. Once they get a foothold they will never stop operations till the wells run out. This is because they write checks to just enough people to get their say, the politicians, royalties payments, even livestock showing farmers at the county fair, etc. It's either keep them out entirely or welcome them with open arms.

I've heard from one oil and gas guy up here that NC is the next big 'play'. I was incredulous but this is some minor confirmation.
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Old 04-21-2012, 06:47 PM
 
Location: Cary, NC
91 posts, read 101,879 times
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DR Horton only kept the mineral rights of the homes that were sold to people who did not have a buyer's agent. It seems kind of shady to me.
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