Thursday, January 29, 2015

Homestead: Mineral and Timber rights

Mineral and Timber hear this term a lot when your buying land here. I thought a post about what they entail would be of some help to buying that perfect home stead.

Mineral Rights are property rights to exploit an area for the minerals it harbors. Mineral rights can be separate from property ownership.

Timber Rights are an interest in a property's timber that allows one to buy or sell the interest in the timber separately from the land.

Ralph and I are much concerned about Surface rights to any property we buy. We want to own all of the land for the time God has alloted us. We want land security in knowing we will not wake up to a drilling rig at the door or our favorite pasture being ripped up as it is strip mined. The big grove oak trees will continue to shelter our pigs not be cut and hauled away buy someone who does not own the land. 

Why do we think Mineral and Timber rights are so important? Well for one thing we want to feel secure in the fact that no one can come on to our land without our say so. We think having the option to log or mine is something land owner should choose or not choose to do according to their needs and wants. Timber is like a bank account...there to give you the pleasure of trees or to harvest if you need help financially. If you do not have the timber rights secure you may not own the trees at all. Mineral rights have a different connotation for us. We do not want to mine or destroy the land that will feed us and provide for our livestock. We do not want to have the ground stripped out from under us.

Here are some basic explanations of mineral rights and what they entail.

A Fee Simple Situation
Landowners can find themselves in a variety of mineral rights situations. Therefore, it helps to know what rights they may have in any given situation. One of the easiest, hassle-free mineral rights situations is called fee simple. The fee simple grants landowners the right to complete ownership of anything that resides on or underneath the surface of their property. Landowners can retain their rights or sell them to someone else. Landowners can also sell, trade, or transfer any mineral interest to another party. Landowners lose their mineral rights once they sell a particular piece of land. Since those minerals belong to a separate entity, whoever purchases the land next will no longer have the benefits of a fee

Selling A Portion of Mineral Rights  
In some cases, landowners may sell a portion of their mineral rights to an interested party. For instance, a landowner may choose to sell their rights over the oil found beneath their property, but retain their rights to all other minerals. The mining company receives an easement, also known as the right to enter the property with the intention of extracting the mineral interest. The mining company may choose to lease their rights if they have doubts over the quantity of minerals they wish to extract.

Leasing Mineral Rights versus Extraction
Oil and gas companies favor leasing mineral rights instead of outright extracting the mineral from the property. In some cases, the drilling company may offer the landowner a sum of money to begin the extraction process. This only occurs if the drilling company deems a piece of property suitable for subsurface mineral exploration. Extraction usually begins if the drilling company finds adequate quantities of the desired minerals. Landowners typically receive royalties from the amount of minerals extracted from their property. If the drilling company finds less than adequate quantities, then the lease expires; however, the landowner still retains the signing bonus and mineral interest.

The Backlash of Mineral Rights Transfer
Transferring mining rights can have its negative drawbacks, especially in congested areas where neighboring properties become affected. For instance, oil can easily cross property lines if the drilling company begins the extraction process at a certain angle or level. Some states have enforced regulations, such as mineral unitization, to keep this from happening to neighboring properties. Many states have no restriction, which makes mineral rights transfer risky business. The majority of landowners involved in mineral interest transactions consult land service companies and/or law firms who specialize in mineral rights law. This will help them preserve their rights in case a lawsuit ensues over the intrusion into neighboring properties.

I hope this information can be of some help. You can never have too much information when you are making the investment in your future with the purchase of a property. Below are some very good links to more detailed information.

God Bless all of you and happy Homesteading.


  1. Where I live in Oregon, the mineral rights belong to the state. We live in high desert with sagebrush and yet, we have no timber rights, either. They belong to a private company since the 1800's. No timber on our place and never has been.
    Go figure. Property taxes are sky high if you own timber and you must pay tax on any you harvest.

  2. Thank you for that information, do you have to have water rights where you are? I come from a region where the government owns the oil, gas, coal etc., rights. It was a learning curve when I started land research. I never thought of the mineral rights.

  3. Yes, we own our water rights. The irrigation ditch has the water right dating back to 1888.....the second oldest in the county. It came with the land. The water in our well is ours, as is the water in our ponds. The EPA wants to control every drop of water in the country.....they will have a fight on their hands, We were just stupid lucky when we bought this place.....if we buy again, it will be with an land attorney checking everything out.