When purchasing real estate, it is common for surface rights to convey to the buyer. But there are also subsurface rights, such as gas, oil, and mineral rights, that do not always transfer. For any buyer in a real estate transaction, it is important to be aware of exactly what they are receiving. If they expect to have mineral rights, for example, it should not be just assumed that those will convey when the deed is transferred into their name. In a lot of cases, subsurface rights belong to the seller and will stay with the seller, or they belong to a person or corporate entity that they were sold to a long time ago, and not the current seller of the property.
For those who are just purchasing real estate, finding out whether the subsurface rights are going to convey is important. For those who already own real estate, discovering whether they own the subsurface rights to their property or whether they can get them back can also be important. In some cases there is a great deal of money to be made from the use of these rights, such as when precious minerals, natural gas, or oil is discovered beneath the surface of someone’s land.
Here’s what should be considered when addressing the issue of surface and subsurface rights, along with whether those rights both belong to the owner of the land and how to make potential adjustments to ownership.
Does the Real Estate Owner Own the Subsurface Rights?
Many real estate owners may wrongly assume that they own the subsurface as well as the surface rights to their property. However, the first thing they will want to do when considering this issue is checking to see if that is actually the case. The easiest way to do that is to look at their deed and see if it states whether they received the subsurface rights along with the surface rights or not. If the deed does not clearly say that they own these rights, or if it says that they do not own the rights, finding out who owns the rights is the next step.
A city or county will have property records on file, such as deeds and other types of conveyances, along with liens, easements, setbacks, variances, surveys, and more. This information may be available online, depending on where the person lives. Some areas of the country make this information much easier to locate than other areas do. If the records cannot be found online, stopping into the county clerk’s office can provide answers to questions about who owns subsurface rights to a specific piece of property.
It may be necessary to trace this information back through several real estate transactions to find out where they were originally sold, and then use that as a start to investigate whether the rights were then sold to someone else after that initial transaction. While something as simple as an internet search might provide this information, in many cases it will take some digging to uncover who currently holds a property’s subsurface rights – provided that they do not belong to the current or immediately previous owner.
How do Subsurface Rights Become Separated from Surface Rights?
A lot of real estate owners are surprised to find out that they do not own the subsurface rights to the property. That is generally because most people either assume that the rights to a piece of property mean all the rights, or they do not even think about the subsurface rights at all. Maybe they genuinely do not care at the time, but it could become important for them later. As for how the two sets of rights became separated in the first place, there are several ways in which this could have happened. Typically, these rights can be:
- Sold to a person or a company
- Retained by a previous owner
- Leased to a person or a company
Rights that have been sold to a person or a company can be tracked down through the clerk of court. If that does not work or the records cannot be found, there are private abstract companies that can be hired to discover who owns something. This is not free in the same way the clerk of courts would be, but it may be necessary in order to determine who the actual owner of the subsurface rights is. That is especially true if the rights have been bought and sold a number of times, or if they were sold a very long time ago when records may not have been as accurate as they are in more modern times.
When rights are retained by the previous owner, it is much easier to determine where those rights are located and who they belong to. With that in mind, though, it may still not be easy for the current owner to acquire those rights from the previous one. In short, the person who owns the rights may not want to sell them. It could be that they retained them when they sold to the current owner for deliberate reasons, or it could be that they just did not think about including them in the sale. If they were not committed to keeping the rights for themselves, the current owner may be able to purchase them for a fee.
Sometimes, rights are not sold to another party, but they are leased. That can result in a very difficult time getting the rights back. A company or person who has the lease may not want to give that up, and the lease agreement could be part of the deed when the property transferred to the current owner. That owner can ask to break or dissolve the lease agreement, but the other party may not agree to do so. When that occurs, it may be possible to seek legal remedies. A real estate attorney would be the one to talk to on this matter, in order to determine whether there is a valid case for breaking the lease agreement.
How Can the Surface Rights Owner Reunify the Subsurface Rights?
The most common way to reunify surface and subsurface rights is to buy the subsurface rights from the current owner. There may be other options, of course, but this should be the first course of action. It is generally the easiest in most cases, and it is also the least likely to be contested by another party later, causing problems with the title, or otherwise affect the validity of the ownership interest in the property. Even though other options for a subsurface rights transfer exist, purchasing the rights is by far the most common and safest choice when done correctly. To do this, a surface rights owner would need to:
- Find the current owner of the subsurface rights
- Negotiate a purchase for those rights, either in part or in full
- Transfer the title to the subsurface rights to the current owner of the surface rights
There are several types of deeds used to convey these rights from one party to another, such as warranty deeds, quit claim deeds, and mineral deeds. Whether or not the party that owns the rights would agree to one of these deed transfers, though, is ultimately what matters. Additionally, the current owner of those rights may want to use a method, such as a quit claim deed, that does not guarantee as many protections for the party buying the subsurface rights as another method, such as a warranty deed. A deed that is transferred through a title company with proper protections in place is generally the best option.
There are several functions of law that can also be used to claim subsurface rights. These are far different from a standard transfer of the rights through a deed from the current owner to the purchaser. They generally require the services of an attorney in order to make sure they are handled correctly, and if they are contested by the current subsurface rights owner, they could become contentious. That can result in lawsuits and related problems that most real estate owners want to avoid. However, if trying to find the current owner to purchase the rights has not been successful there are other choices, including:
- Quiet title action
- Adverse possession
A quiet title action is when the current owner of the surface rights files for title to the subsurface rights. This must be done through proper channels, and the current owner will have the opportunity to step forward and claim their rights. If the current owner cannot be located, does not respond to being notified about the quiet title filing, or otherwise does nothing to try to claim their rights, then there may be a legal ruling in favor of the person attempting to acquire those subsurface rights. At that point, they would then own the rights to the minerals, gas, and oil, or whichever of those they specifically applied for title to.
Abandonment essentially states that the party who owns the rights has abandoned those rights. This would most commonly be seen in cases where a person or company has owned the subsurface rights for many years, but they have not done anything with them in any way. That could result in the current real estate owner claiming that the owner of the subsurface rights has, essentially, abandoned their claim to those rights and no longer should have any ownership. This will generally also require a legal ruling, as the other party must be located if possible, and there are specific ways in which that party has to be notified.
When a real estate owner files for adverse possession, they are saying that the current owner of the subsurface rights should not be the owner, and that they, the current owner of the real estate, should be the rightful owner. They must “take over” the rights to the subsurface minerals, or the gas and oil that they are attempting to claim ownership to. If they start mining the property, for example, and the current owner of the subsurface rights does nothing to stop them and assert their own ownership interest, the party who has taken over the actionable use of those rights may be able to claim adverse possession.
Why Would a Real Estate Owner Want to Reunify Surface and Subsurface Rights?
There are several reasons why a real estate owner may want to reunify the property rights and hold the deed to both the surface and the subsurface rights on a piece of property. The most common reasons for attempting to do that include:
- Loan issues
- Marketable title
- Value or income
All three of these can make sense in particular situations. For example, a mortgage company may not want to provide a loan on a property where all the rights do not transfer to the purchaser. Additionally, if the current owner is trying to sell the property it may be much more marketable and command a higher price if the subsurface rights convey along with the surface rights. Not everyone will care about those rights, but some buyers would not want to purchase a property where they were “losing” a lot of the right to the use of that property through the lack of ability to access any subsurface rights.
For real estate owners who see value and income in the subsurface rights to a piece of property, the reason for attempting to reunify those rights with the surface rights is more obvious. They want to make money off of their property, and if they can get the subsurface rights through a legal action or purchase them at a fair price, it may be well worth their while to do so.