Do you want to know if you own the mineral rights to your property? Here are a few ways you can find out.
If you discover your property has a large deposit of minerals, it could boost your property value into the millions. Mineral production takes your property value to 36-72 times the monthly production value. Now if only those minerals that gunk up your shower head could be worth that kind of money.
When you start talking about these kinds of numbers, people will want a piece of the pie. To protect your investment by ensuring you are the sole owner of your property and the mineral rights associated.
Let’s go over some ways you can be sure you own your mineral rights.
Do You Own the Land?
Don’t answer this question too quickly. Hire a title company to perform a thorough search of your property’s title. They will trace your chain of title backward to make sure there are no questionable spots.
Typically a search will go back 40 to 50 years. This may not be enough for mineral rights though as they have been known to be 100 years old.
Once you are confident you own the property, you can look into whether or not you own the mineral rights.
Hire a Lawyer
A knowledgeable mineral rights lawyer will be able to help you look through public records to determine any previously approved mining, permits, or actual production on your property.
Sometimes mineral rights are transferred with the purchase of the land. Sometimes the mineral interest gets sold separately and then subsequently forgotten about.
If this happens no amount of searching will uncover the interest because it was never sold or transferred via probate. In these cases, there is no written evidence of ownership.
Different Types of Ownership
Once you determine that someone else has an ownership interest in your property’s mineral rights, you need to determine what exactly they have an interest in. Check to see if they have an interest in the entire property or only portion.
Then check to see if they have a time limit on their interest. There may be a time limit on how long they have to start exploring, and then producing once they locate minerals. This type of interest would be a working interest.
There are also ownership interests that focus more on royalties than the actual production of minerals. When you as the property owner enter into a lease agreement, you need to pay the royalty holder an interest.
Claim Your Mineral Rights
Before you get too excited about an offer for your mineral rights, check and make sure you have a free and clear title. You don’t want anyone knocking on your door with their hand out as the rightful owner to your property.
You will also want to make sure that no one else already owns the mineral rights through a previous agreement. Then finally, make sure you know what mineral rights you are selling.
Mineral rights aren’t the only reason why investing in real estate make sense, check out this article for a few more.