Vail Daily column: How important are mineral rights?
I am finally going to own some acreage I can call my own! I have been saving and looking for years. Now I have found this sweet spot — my dream property — on a creek that backs up to BLM. The only problem is that now, as I read over my contract to purchase, I see that it includes some really scary stuff about the mineral rights, which I know do not come with the land. How important is it that I own the rights to the minerals on property I buy? Am I in danger of a big oil company coming in and putting a well right in front of the cabin I plan on building? Should I refrain from going forward with my dream purchase? Thanks.
Dear Mineral-less Buyer,
You are in a situation common among land sales in Colorado (and the West). Many of our states’ mineral rights were originally reserved by the federal government when they issued patents for only the surface rights of the land they sold to entities and individuals. Then, during the oil boom, many land men went around buying or leasing mineral rights from the land owners who did actually own the minerals under their ranch land. This is a very simplified picture, but most sales of Colorado property do not include mineral rights.
Therefore, several years ago, the Colorado Real Estate Commission added another clause to our purchase contracts in paragraph 8.7 Title Advisory. Part of this paragraph states that “the surface estate may be owned separately from the underlying mineral estate, and transfer of the surface estate does not necessarily include transfer of the mineral rights or water rights. Third parties may hold interests in oil, gas, other minerals, geothermal energy or water on or under the property, which interests may give them rights to enter and use the property. Such matters, and others, may be excluded from or not covered by the owner’s title insurance policy. Buyer is advised to timely consult legal counsel … ”
This means that your safest bet is to hire a mineral rights attorney. At the very least, you are advised to investigate a “surface owners” rights so that you can feel comfortable with your purchase. The clause above is in every contract to purchase in Colorado so that you know who owns what, and which protections are available in the event that the mineral right owners would exercise their rights to take the minerals they own under your land.
Now remember, whether you are purchasing a Beaver Creek condo, a Vail luxury home, a property in downtown Denver or acreage anywhere in Colorado, this clause will be in your contract. Rest assured that in addition to some risks, there are also protections for surface rights and homeowners.
Please have your agent point you in the right direction to investigate what can and cannot be done on your land. After selling ranches and all types of properties in Eagle County for nearly 30 years, I have not seen any mineral extractions here … yet. This has been an issue in other counties in Colorado and your competent Realtor can give you more information on this and advice to help you make a good decision.
Mineral rights should not be feared, but it is important that you understand what you have, what you don’t have, and what your rights are. Good luck on your decision!
Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years, is a past chairman of the Vail Board of Realtors, past Realtor of the Year, former director on the Great Outdoors Colorado Board and a member of the Luxury and Land Institutes. Contact Harned with your real estate questions at Joan@TeamBlackBear.com, 970-337-7777 or http://www.SkiAndTee Homes.com.