In the realm of real estate, the significance of title insurance is widely recognized as a means to protect buyers from various pitfalls. However, a less understood aspect is how mineral rights intertwine with title insurance, particularly in the context of the burgeoning oil and gas industry. At True Concept Title, we aim to clarify this intricate subject, helping you understand the implications of mineral rights on your property purchase.
The Overlooked Aspect of Mineral Rights
When buying property, especially in states like Ohio, Illinois, Michigan, Pennsylvania, and West Virginia, it’s crucial to realize that standard title insurance policies do not automatically include mineral rights. This means that if someone else holds these rights, you won’t acquire them with your property purchase, and, importantly, your title insurance won’t cover them. This exclusion typically falls under Schedule BII of the policy.
Implications for Property Owners
If another party owns the minerals beneath your property, this could significantly impact your surface rights. The mineral rights holder may have the legal entitlement to use your land’s surface as necessary to access these minerals. Additionally, if you purchase a property with existing mineral leases, like an oil and gas lease, your title insurance won’t offer protection against the leaseholder’s rights to access and extract these resources.
Navigating the Risks in Mineral-Rich Areas
Buyers of significant land tracts in areas rich in minerals often face risks due to a lack of complete understanding. To mitigate these risks, it’s essential to:
- Request Deletion of Mineral Exceptions: When acquiring property, ask your title insurance company to remove the mineral exceptions in your title policy, or at least understand the implications of these exceptions.
- Seek Legal Advice: In areas prone to oil and gas exploration, obtaining general advice or a title opinion from a law firm with experienced oil and gas counsel is crucial.
The Role of a Title Opinion
A title opinion offers a more in-depth examination than a standard title commitment, delving into the property’s history as far back as the mid-1800s. This legal opinion covers ownership matters, surface estate, and mineral-related issues, including existing and expired oil and gas leases, coal leases, and restrictions on oil and gas activities. It also interprets relevant laws and statutes, such as the Dormant Mineral Act, which can be complex and ever-evolving.
Understanding and managing mineral rights in real estate transactions is a complex yet critical aspect, especially in mineral-rich regions. As your trusted title company, True Concept Title is here to guide you through these nuances, ensuring you are fully informed and your investments are protected.
Exploring Property in Mineral-Rich Areas?
Before diving into a property investment in a mineral-rich area, let True Concept Title help you navigate the complexities of mineral rights and title insurance. Reach out to us for expert guidance and ensure your real estate decisions are sound and secure.