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My husband and I found a house on a couple of acres we like. I checked out the county website, and noticed listed in the legal property description: Cargill has mineral rights.
Could someone help me understand what implications this would have and what considerations one should take? Would this be a deal breaker for you? We are in New York State.
I'm not familiar with NY law but generally having mineral rights allows the holder to enter the property for evaluation and exploitation.
An example would be if coal was to be mined. The holder could extract that coal. In PA, the landowner would get a per ton royalty for that and the mining company would have to restore the contours of the property when finished.
A company could drill a gas well and again the property owner would get a royalty payment (or free gas supplied to the house, I've seen that).
My family holds the coal rights on the old family farm although someone else now owns the property and it has been stripped a couple times. There is still one more vein remaining which may or may not be taken out at some point in the future.
My grandfather gave the natural gas rights to a neighbor (whose grandchildren now hold them) and a well was sunk in the property a few years ago. The owner complained but had no recourse. The same as about 35 years ago when the coal was last taken out.
As far as keeping me from buying a property I don't know what my response would be.
You'd really need to have your realtor touch base and find out the implications of the situation. We can't tell you what sort of deal has been setup on that property. You'll have to do the legwork.
You need to contact an attorney for a full explanation, although the ones above are correct.
Would I purchase a property with deeded out mineral rights? Not unless it was hundreds of acres where mining/drilling wouldn't affect my home. Then again, maybe even the hundreds of acres wouldn't be enough. I would hate to have the land strip-mined or an oil well that I could see/hear/smell chugging away.
Perhaps you could purchase the mineral rights from the current owner.
I notice there are 5 threads concerning mineral rights on this forum: Nevada, Louisiana, Oklahoma, Dallas, and Tulsa. You might find more info there.
We are just starting to peek at what's out there again after a recent attempt to purchase fell through two days before closing (no realtor yet). Before posting, I had a hard time narrowing the search results here on CD to find what I was looking for (although now that I've posted, I clearly see the "similar threads" below. When I searched "mineral rights" in this forum, I didn't see those results. I'll keep looking!) I hadn't thought about the possibility of buying the rights, appreciate that input.
Its also wise to research how the mineral rights holder historically has handled surface owners in the past. Compensation varies a lot, and really what should dictate your choice should be primarily how your state, and the mineral owner tends to such advancements of exploration or exploitation. Some try to buyout landowner rights to minimize resistance, some pay handsomely to do so while others will try to squeeze landowners out. Tough to have a crystal ball in the matter. Good luck!
You should first determine what rights the company actually holds. Their rights in the property could run with the land--or they could be for a set number of years. Most of the mineral rights in Michigan are permanently conveyed, but I've run across instances where they were leased for a set term.
You would also need to determine the scope of their interest in the property. Most of the "mineral rights" in Michigan pertain to oil and gas. It may be similar in your area, but if it entails rights to coal--or other subsurface "minerals" which would require extensive surface disturbance to access, that may be even more of a concern.
If the rights are limited to oil and gas, that does not mean that they would plop down a well on your property to access the oil or gas. With only 2 acres, they would most likely be required to pool their holdings with other properties in the area, since you can't pump from a 2-acre plot and only pull out the oil and gas which is underneath the property. So, even though they hold the right, they may choose to locate any well at a distance quite removed from your property. Or...they might stick in right in your back yard.
Of course, many "rights" are not exercised. There may not be enough of a market for the substances involved, or there may not be sufficient quantities to make it economically viable to proceed with extraction. Lots of questions here, but you should have fun trying to look up all of the answers. Start with the recorded instrument conveying the mineral rights.
In the interest of time, rather than writing back and forth about clarification on the location, there are lots of salt mines in that area. So let me say the following. (PS you should really write a book about your house hunting adventures)
If it's one Finger Lake, Cayuga, I don't know that they'd give up the salt mines. They are probably already in use under the house you're looking at. If it's Cayuga, they started on this in 1915 and are not giving up yet. Click on the little red map and it will enlarge greatly. The salt mines are vast and deep and a serious operation there:
They have been working on this a long time. There are elevators that go 1/2 mile down and then workers commute underground about 40 minutes to work sites. Plants, conveyors, lunchrooms. The salt is used locally and even down south to NC.
If it's another Finger Lake, Seneca, US Salt sold to a corporation for the sole purpose of storing derivatives from fracked gas (propane and butane). The company plants to spend $40-$50 million to develop liquefied petroleum gas storage in caverns by this other lake that have been capped for more than 50 years. This is being fought by those concerned with safety risks and the environment, as you can imagine.
I own some mineral rights. I guess the first thing I would want to know is what's there. Oil? Gas? Coal? Minerals? If the property you are considering is under lease, chanced are the neighbor's land is too. I would meet the neighbors and ask about it. And I would drive around and look for signs of mining/exploration in the area. Ask your realtor to check it out too. You can also go to the county and take a look at the lease. And find out who owns the rights.
Most likely this means exactly nothing. Companies buy up leases and do nothing with them all the time.
In the interest of time, rather than writing back and forth about clarification on the location, there are lots of salt mines in that area. So let me say the following. (PS you should really write a book about your house hunting adventures)
If it's one Finger Lake, Cayuga, I don't know that they'd give up the salt mines. They are probably already in use under the house you're looking at. If it's Cayuga, they started on this in 1915 and are not giving up yet. Click on the little red map and it will enlarge greatly. The salt mines are vast and deep and a serious operation there:
They have been working on this a long time. There are elevators that go 1/2 mile down and then workers commute underground about 40 minutes to work sites. Plants, conveyors, lunchrooms. The salt is used locally and even down south to NC.
If it's another Finger Lake, Seneca, US Salt sold to a corporation for the sole purpose of storing derivatives from fracked gas (propane and butane). The company plants to spend $40-$50 million to develop liquefied petroleum gas storage in caverns by this other lake that have been capped for more than 50 years. This is being fought by those concerned with safety risks and the environment, as you can imagine.
They still own their rights on Cayuga Lake. Salt mines are not leaving the Finger Lakes. Seneca Lake has a salt mine that has been reopened. Another mine is being used as a storage facility for gas.
Before signing anything in the region, you must find out if there are any rights that have been conveyed. There are people who signed over various rights over the years. All do not mean the same thing. At this time, fracking has been banned in NYS, but that doesn't mean in the future it will be. Many have sold the gas rights as well.....it's not always called gas rights either. Definitely something you need an attorney for....one who is experienced with these types of rights - not all real estate attorneys are.
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