No Mineral Rights + Guaranteed Non Surface Lease

Hello,

I am looking to purchase some land in NY state without mineral rights. The land is currently unleased. Is there any way that my deed and title work can be written to prevent the mineral owner from signing a lease that allows surface activity ? If possible, I'd like some guarantee that the mineral owner can only sign a non-surface lease.

Thanks, Mister Bluebird

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Permalink Reply by Mr. Bluebird on December 16, 2012 at 7:26am

Thanks Frank.   The mineral owner is surface owner (seller) and the property is unleased.    The wouldn't sell minerals.

Permalink Reply by Jim Litwinowicz on December 16, 2012 at 8:44am

I disagree.  It is my understanding that one cannot put such restrictions on surface activities   Courts have ruled against such things in the past. I am not an attorney so consult with expert O & G attorneys before signing any such agreement.
As for your question about being near the NY border. NY will be lifting its moratorium soon.  And these companies can and do drill across state lines. So don't assume that they will not use your property for a pad.

I don't know how large this parcel is but companies usually don't use parcels smaller than 40-50 acres, especially if its in a rural area with large parcels.  No guarantee, though. Keep in mind that if they use your property there i usually a "spud fee," generally $15,000 to $25,000 plus an annual payment instead of free gas

Permalink Reply by Mr. Bluebird on December 16, 2012 at 9:20am

Thanks for the info Jim.   I didn't realize that they drilled under state lines.   That changes everything in this situation.      I won't assume anything for now but the more I know, the better I will be at guessing.  :-)

Mr. B.

Permalink Reply by Jim Litwinowicz on December 16, 2012 at 9:35am

Mr Bluebird. I do nt know how common it is. I imagine it would be a lot more permitting doing two states.  But I have been told of at least one such situation between Oh and Pa.  It is possible that NY wouldn't allow it.  Check with the NY officials to see.

Permalink Reply by Golddigger on December 17, 2012 at 3:56am

Jim,

Surface restrictions are put on Deeds all the time. They are called "Covenants and Restrictions" and will hold up in a court of law every time. Otherwise any and all sub-division owners would have no control on what a property owner would put on his new purchased lot within that subdivision. Mobile home, unlicensed vehicles, cell tower, commercial use, etc. The same holds true with gas pads!

Permalink Reply by Jim Litwinowicz on December 17, 2012 at 4:00am

Golddigger;  from what I have been told, one cannot put surface restrictions on someone's mineral rights. You cab do so temporarily in a lease but when the lease expires so do the restrictions.

Permalink Reply by Kathleen on December 17, 2012 at 8:44am
Just wondering could a second lease type document be placed on the deed that has, say a 99 yr clause pertaining to the surface? If something like that went on 1st wouldn't it supersede any other lease language. This would be done before the minerals where severed from the surface.
There has to be a way to protect the surface owner. I bet if we went into the Texas boards we would find out how they deal with this.
Interesting topic.
Permalink Reply by Golddigger on December 17, 2012 at 10:02am

Jim, Sorry I should have clarified.The surface right owner also has to own the sub-surface rights when placing any surface restrictions that might inhibit OGM exploration in the future.
The general rules regarding free use of the
surface to benefit the mineral estate may be changed by
the specific terms of the mineral lease covering the
property or of the deed that severed the mineral estate
from the surface estate. If the bundle of rights have already been severed in a previous deed where one owns the surface rights, another mineral and/or still another gas & oil rights, (could be 3 owners in Pa.), at that point the surface right owner would be at the mercy of the OGM owners as far as surface disturbance and any leasing terms. However the surface right owner still has limited rights. Surface restrictions can be put on surface activities as long as they are documented prior to or at any severance of the compete bundle of rights to any certain property. However, ask 5 lawyers and get 5 different answers.

Permalink Reply by Jim Litwinowicz on December 17, 2012 at 10:07am

However, ask 5 lawyers and get 5 different answers.

Ain;t dat da truth!!!

Permalink Reply by Kathleen on December 18, 2012 at 2:24am
To make it worse ask the same lawyer the same question a few days apart and you still get two different answers!
Permalink Reply by Mr. Bluebird on December 20, 2012 at 4:30am

I will be purchasing the property without mineral rights.   My real estate agent (whom I have known and trusted my entire life) has assured me that there will be no problem adding the "no surface disturbance" verbiage to the deed/title since the land is unleased and the seller owns mineral rights.    Although NY doesn't allow fracking, this particular region has seen a lot of gas/mineral related activity in the past 80 years so I am actually confident that our attorney will have sufficient OGM knowledge.

Once we close, I'll post an update to describe what verbiage was added to the deed and how everything went with our attorney.    Thanks again for all of the information and opinions.   This is a great site.

 

Mister Bluebird.

 

Permalink Reply by Jim Litwinowicz on December 20, 2012 at 4:33am

Just a clarification; NY does allow fracking, just in vertical wells.  They have been fracking wells in NY for decades. They don't allow horizontal wells with High Volume Hydrolic Fracturing.

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