How Do Mineral Rights Works?

Property owners may have the rights beyond the surface of their land.

Texas is known as the second-largest state in the United States, and one of the many protected by the “Landowner Bill of Rights.” The bill guarantees the interests of both the surface owner and mineral rights owner.

How Do Mineral Rights Works

Generally, mineral rights owners living in Texas have complete rights on the mineral content beneath the surface of their properties. However, surface owners may face complications if documents do not state total ownership.

Oil, gas, salt, and uranium are some of the minerals existing below the surface. In the account that there’s an independent surface owner, there should be a waiver of both rights to cover any damages that may occur in the future “harvest of rights.” There will be compensation for the use of mineral rights if the surface owner is an independent body.

An assessment by a land expert or an agent is advisable to ensure the coverage of ownership. Always read the contract carefully as this valuable content of property may sometimes be lacking something.

Limitations on the Rights of Mineral Estate

Essentially, the dominant estate holder has four limited mineral rights in Texas. Keep scrolling and read every rule carefully to avoid penalties and dismissal of operation.

Bear in mind that the length of disqualification for surface owners may differ depending on the value of their royalties.

1. Avoid negligency. The Texas government prohibits mineral owners to act negligently and create unreasonable damages to livestock and the property surrounding the mine.

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2. Adhere to the accommodation doctrine. The Accommodation Doctrine is the legal doctrine for mineral rights in Texas. Under this law, the government requires every owner to meet specific conditions before it can protect the existing surface. This doctrine also helps strike a balance between the interest of mineral companies and the rights of the owners.

3. The use of mineral estate must be reasonable. The mineral owner or any other operator should not create unnecessary damage or use the surface for testing dangerous substances.

4. Follow Common Courtesy Act. The Common Courtesy Act requires gas and oil operators to write a letter to the surface owner about their intent to operate in the property. In general, these operators must send their intentions, at least 15 days before starting their operation.

How Can Surface Owners Protect Themselves?

Owners should involve themselves in a mineral lease to avoid facing legal consequences. During the lease negotiations, make sure to include surface protections in the agreement.

Alternatively, surface owners can work with the oil company leasing the minerals. In most cases, oil and gas companies are willing to do anything in an attempt to be neighborly and avoid conflicts with the surface owner.

Other than that, surface owners can also relinquish their mineral rights for a lump sum to a third-party oil and gas leasing provider.

Doing so helps owners avoid costly title transfer process, proceed reinvestment, and accumulate significant tax gains.

On top of everything else, selling your royalties also puts an end to paperwork and record-keeping.

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