If you own your house, chances are you also own the mineral rights. Minerals are below the ground and include crude oil, natural gas, salt, sand, gravel, gypsum, and a host of other substances. The rights to develop minerals on your land could mean a great deal of money. Each state has a different way of handling mineral rights, but there are some common steps regarding leasing.
Instructions
1. Define mineral rights. A mineral right is the right to extract mineral from the earth or receive payment in the form of royalties. A mineral right may be sold, transferred or leased in the same way in which other property rights are. A person may own all or some fraction of the mineral rights.
2. Review the use of leases. A mineral owner can develop his or her own land, but this takes a great deal of capital and expertise. The more common approach is to lease the mineral rights to a mineral development company. The lease grants the person or company receiving the lease the right to develop and produce minerals in the leased parcel. The lease represents a private contract between the parties.
3. Understand the terms and conditions of the lease. When the lease is signed the mineral owner is usually paid a bonus. The lease might also stipulate a certain royalty to the mineral owner. Leases have a special term and may provide a rental payment to the mineral owner if no minerals are found.
4. Contact a real estate broker or office of geological survey. Also contact a real estate attorney for advice on additional provisions placed on certain minerals such as oil and gas treatment. The attorney also will be able to draft a leasing agreement specific to the laws of your state. See Resources for a sample leasing agreement.
Related posts
Mineral rights apply to oil, gas, coal and other valuable substances (even gold) located beneath the ground. In many cases, the minerals underneath a property are worth far more than the value of...
Lease Petroleum Oil Gas Mineral RightsIf your property contains underground petroleum or natural gas reserves, you may either sell them or lease them to a company willing to extract them, while re...
Properties sitting on potential mineral deposits could be worth a fortune.The term "mineral" refers to all fossil fuels, such as oil and natural gas, and nonmetallic minerals such as lim...
Property & Mineral Rights in IowaProperty and mineral rights in Iowa are known as fee simple estates meaning property owners hold both the surface and mineral rights of a property. In other ar...
The abundant mineral resources in Michigan are important to the overall prosperity of the Michigan economy. Nationally, Michigan ranks 17th in the production of crude oil, second in production of...
