Buying Land With Mineral Rights

Written by about Leases + Ownership and Transfers on June 21, 2012

We get lots of phone calls from folks who want to purchase land, either at a sheriff’s sale, at auction, or just from a local seller. They want to know if the mineral rights are included in the sale. These people want to buy land and quickly lease the mineral rights for a sizable signing bonus that can often offset a large portion of what they just paid for the land.

In a private transaction, the Seller will frequently make that information available to the buyer. In an auction or at a sheriff’s sale, most often the auction or title company will make no guarantees about the mineral rights. Think of the person who relies on a title insurance guarantee that certain land he wants to buy includes the minerals. The buyer then bids a really high price at auction and wins the land, thinking that he now owns the mineral rights. If this person then tries to lease his land for oil and gas exploration and comes to learn that he does not own the mineral rights to the land he just bought, he will probably be more than a little mad at the title insurance company. Because the value of minerals is so high right now, title insurance companies are staying away from guaranteeing them in land transactions. They have too much to lose.

So how do I know if the land I want to buy comes with the minerals? There are a couple of ways to accomplish this. One of them is obviously to spend a lot of time in the courthouse recorder’s office and simply research the issue. That is how title insurance companies approach the question. This process can be confusing and labor-intensive, however. Other methods exist that approach the answer to this question in a slightly different way. Contact us today if you are considering buying property but want to know if it includes the mineral rights. We can help.

Eric Johnson

About Eric Johnson

ERIC C. JOHNSON attended Ohio State University, earning a degree in economics and then graduated from the University of Cincinnati Law School in 1983. His areas of practice are personal injury law, real estate, oil and gas, contracts, litigation and appeals.