Homeowners get rude awakening on ‘mineral rights’

Dan Weissmann Sep 19, 2014
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Homeowners get rude awakening on ‘mineral rights’

Dan Weissmann Sep 19, 2014
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Ohio’s Supreme Court ruled that strip mining can proceed in a state wildlife area. When the state bought that land in 1944, it didn’t get what are called “mineral rights”  the rights to underground coal, oil and gas. In many cases, mineral rights owners can do whatever it takes to pull those out. Here’s the thing: A lot of homeowners don’t own their mineral rights. As the fracking boom spreads, they’re finding that out the hard way.

Jim O’Reilly teaches law and public health at the University of Cincinnati College of Law. He’s writing a legal textbook about fracking. 

Here’s how he describes the conflict between surface rights owners and mineral rights: Say the two of us own a house with a beautiful lawn, he says — but not the mineral rights.

Someone else can buy the coal, or the oil, or the gas underneath us. And then say, ‘I’ve got a right to put up this massive drilling rig and do all this other stuff.’ And — you’re screwed,” he says.

Surprises like this have become a big enough issue in some parts of Ohio — the parts with a lot of coal, oil and gas that real-estate listings now often specify whether mineral rights are included in the deed.

A routine part of most real-estate transactions, the title search, seems like it should protect buyers. Isn’t this what title search companies get paid to do?

No, says Lance Astrella, a lawyer who specializes in mineral rights issues.

“Most title companies do not insure mineral,” he says. “So to be certain who owns the minerals on your property, you have to check the county records, generally.”

That’s a big undertaking. Expensive too.

There is a mitigating factor in all this, which lawyers call the “accommodation doctrine.” Mineral owners are supposed to accommodate surface owners to some degree, but the interpretation and emphasis varies state by state.

Judon Fambrough is an attorney with the Real Estate Center at Texas A&M University. In his state, he says, “The accommodation doctrine says, ‘Is there a way to accommodate the surface owner’ — and this is what they forget to mention— ‘and still get the oil and gas?’ It’s not accommodation strictly.”

It’s more like: Hey, if there’s a win-win here, great.

Otherwise, as Fambrough puts it, “You’re in a mell of a hess, yeah.”

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