Mineral Rights

Colorado is lucky to be one of the great states in the country that is rich in land containing valuable minerals. The states vast land expanse contains soil and rock loaded with a variety of minerals that are desirable by parties that have means to develop them. The plethora of minerals that can be extracted from the ground include coal, oil, natural gas, metals, ores, gemstones, and salt, or other materials extracted from the ground. It’s a loose definition and can vary from state to state.

Colorado is a state that recognizes separate ownership between the private land (Surface Estate) and the minerals (Mineral Estate) that lie within. It is usually the case that different owners own the surface and the subsurface estates. The law in Colorado states that in order for a party to develop the mineral interest on a mineral estate, access to the subsurface estate must be granted for “reasonable use.”

Mineral rights are exercised by owning parties in order to develop a resource. Land originally owned by the government or by private land owners is sold or leased in a subsurface mineral interest transaction. A deed or a lease determines ownership and rights are transferred through legal contracts. A real estate property may not always include minerals with the purchase of the property. The rights may have been sold or leased by a previous owner. This is called a Split-Estate, where the Mineral rights are sold separately from the Surface rights.

All mineral rights transactions are public record. Oil and Gas companies drill wells frequently on Colorado land and this has proven to be both a challenge and a blessing. Land owners and real estate agents are better off if they can stay on top of the details involved in this process and the effects it can have on business and ownership. The downside can be unsightly excavation, noise, and round the clock activity.

The upside includes development of new roads, road maintenance, and job openings. Transactions and leases concerning mineral rights are involved and include the exchange of large sums of money. An owning party and a lawyer should together be involved in the details and research surrounding a particular location or situation. Buyers and sellers should cover all bases before engaging in a contract, including consulting with experts. If you have questions please Contact Us.

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