Mineral Rights in Commercial Real Estate Sales Transactions: Project Development, Title, and Financing Issues

Description

The term 'mineral rights' generally refers to the ownership of subsurface minerals and the right to explore, develop, extract, and market the same. Commercial real estate transactions often encounter "split estates" where different parties own the surface rights and mineral rights creating challenges of which counsel should be aware.

The potential value of mineral rights may appeal to property investors on one hand; however, there may be constraints designed to conserve mineral resources which could hinder land use and project development. Alternatively, the purchase of real property over subsurface resources owned by another party could also create project development challenges where the mineral owner's rights include access for extraction.

Methods available to resolve mineral rights issues include obtaining a waiver of surface rights from the holder of the mineral estate or entering into a surface rights agreement that limits the project footprint on the site and permits the mineral rights holder to use a particular portion of the surface outside of the project footprint. Affirmative title insurance may also resolve the issue.

Listen as our expert panel provides guidance on navigating the complexities of commercial real estate transactions involving mineral rights. The panel will discuss development and financing issues that can arise when mineral rights are severed from property rights. The panel will also address best practices for due diligence and drafting considerations to mitigate the risk of conflict.