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You Might Own Your Home, But Do You Own the Land?

By Allison Halliday | October 14, 2013

Most people’s reaction to this question would be yes of course, but a Reuters report has highlighted the fact that many homeowners in the US may only own their home, not the land beneath it. Apparently it is becoming increasingly common for builders to sell homes while making sure they retain the mineral rights to the land underneath the property. Before buying a property, you should do your research regarding whether or not the land has mineral rights and how to determine the value of these mineral rights. 

These mineral rights include natural resources such as water, gas and oil, and homeowners are often not aware of this situation when they purchase their property. Not surprisingly it is somewhat disturbing to find out land bought in good faith is not fully theirs. Experts on law have pointed out that most people who move into suburban areas would not be aware this is happening, and it is not something that is heavily advertised.

© JSB -

© JSB -

The policy in most states is that sellers do not have to tell buyers if they are retaining the mineral rights to the property. Apparently it is sometimes disclosed in sales contracts, but the fact can easily be overlooked unless the homebuyer is especially vigilant over reviewing the paperwork. This is more likely to happen if the homebuyer chooses not to hire a lawyer to deal with the sale. Some homeowners who have noticed the clause to retain mineral rights have tried to fight it, but have found it is not generally something that can be negotiated.

Many people will have bought properties in gated communities, golf clubs and housing developments over the past few years, completely unaware of their lack of mineral rights on their land. This growing trend is thought to be due to the increase in technologies to extract minerals from the ground, and which have made this type of exploration more likely. Developers have been quick to spot the potential in this, and have set themselves up to profit should anything valuable be found underneath these developments.

Reuters did ask numerous builders about their opinion on this practise, but many declined to comment. One of the major concerns amongst homeowners affected by this trend is the practise of fracking. Research is still on-going as to whether or not the process can contaminate the surrounding areas. Retention of mineral rights has the potential to affect homeowners in other ways, such as property tax assessments. They may also find it more difficult to get extensions on mortgage loans.

It is quite unusual for private owners to be able to own both the land and the minerals underneath it. In most countries these mineral rights are owned by the governments or the country’s monarch.

Allison Halliday is a Realty Biz News contributing writer. She handles International Real Estate and is a seasoned blogger.
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