Ganje on mineral rights: Those who slumber lose | TSLN.com
YOUR AD HERE »

Ganje on mineral rights: Those who slumber lose

Who owns that which cannot be seen? Most mineral rights cannot be seen. They are not found on the surface of land. Most mineral rights are under the earth’s surface. It is a curiosity of law that you need not own the surface to own the mineral rights underneath the surface. Yes, a non-surface owner may have title to mineral rights under a stranger’s land. This quirk in the law is true outside of Indian Country. Natural resources ain’t natural. Individuals, companies, and trusts may be your unseen neighbor with claims against the minerals under your land.

In my experience about half of mineral interest owners in North Dakota and South Dakota live outside of North Dakota and South Dakota. They own what we call severed mineral rights. Some of this has to do with the Great Migration during the depression. Some of this statistical quirk has to do with kids moving on in life or moving out in life. And, yes, some of this may have to do with a fellow wanting to give a girlfriend some benefits without letting the wife know.

South Dakota describes a mineral interest as “any interest, in oil, gas, coal, clay, gravel, uranium, and all other minerals of any kind and nature, whether created by grant, assignment, exception, reservation, or otherwise, owned by a person other than the owner of the surface estate.” However, a mineral interest claim is considered abandoned if it is “unused” for twenty-three years (20 years in North Dakota) and if certain action by the owner of those rights is not taken.



To keep ownership of a mineral interest and avoid a lapsed claim, the mineral interest must be used. The state statute describes “use” eight ways in order for a claimant to fulfill the statutory “use” requirement. Several things will fulfill this requirement, but the risks of owning an abandoned or lapsed mineral interest are technical. And the risk of loss has increased in the last several years due to a law change. Not many know about or seem to care about the change, so let’s explore this new risk.

My dad is a typical example. He bought some interests when he was a younger man. He was told, ‘hang on to that stuff as I may be worth something someday.’ That might be good advice concerning wholesome life-style habits but is not good advice for property ownership. Property needs to be managed, overseen, cultivated, and not ignored. Even more so in South Dakota since 2016 when the law changed on mineral interest ownership rights.



If you are the absentee owner of mineral interests which are not under development or not actively explored, there is probably no visible sign of ownership. The law may penalize such an owner. That owner has a duty to keep the public records up to date. Silence or just ‘sitting on it’ is bad policy. As of 2016 it is the owner’s “obligation to maintain an address of record in the office of the register of deeds in the county in which their mineral interest is located.” In basic terms, if the mineral interest owner does not keep current the public records, he or she has waived the right to receive mailed notice if the surface owner should choose to clean up and try to get rid of old mineral interest claims. Equity aids the vigilant, not the indolent.

David Ganje practices law in the area of natural resources, environmental and commercial law with Ganje Law Office. His website is Lexenergy.net.

 


Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User


Comments

0 Comments
Loading comments...