Ever wondered who actually owns what's beneath your feet? In our latest episode, we dive into the world of mineral rights - a concept that can dramatically impact rural property owners but is often misunderstood or overlooked during the buying process.
When we purchased our land about four years ago, understanding mineral rights became critically important. We share our personal journey and explain exactly what these rights entail - essentially determining who has legal access to valuable resources like oil, gas, and coal underneath your property. The implications are far-reaching and sometimes shocking: companies that own mineral rights can literally come onto your land, tear down trees, create access roads, and dramatically alter your property without your permission or approval.
The financial aspect is equally eye-opening. We break down the potential value of mineral rights, which can range from a few thousand dollars to over $25,000 per acre or even $1 million for high-potential properties. While these figures might tempt some landowners to sell, we discuss the devastating consequences we've witnessed firsthand - from properties transformed into strip mines to pristine land reduced to barren dirt pits.
For anyone considering rural property ownership, this episode provides crucial knowledge about what questions to ask, what to look for in disclosures, and why we personally would never purchase land without mineral rights. Whether you're a current homeowner or prospective buyer, understanding these often-overlooked property rights could save you from making a costly and irreversible mistake. Subscribe now and gain the knowledge to protect your investment and preserve your land for generations to come.
To learn more about Habitation Investigation, the Three-time Winner of the Best Home Inspection Company in the Midwest Plus the Winner of Consumer Choice Award for Columbus Ohio visit Home Inspection Columbus Ohio - Habitation Investigation (homeinspectionsinohio.com)
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Episode Transcript
Habitation investigation is the way to go
for a home inspection in Ohio.
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From radon to mold towarranties For a great home
inspection, you really can't gowrong.
(00:21):
Visit HomeInspectionsinohiocom.
Speaker 2 (00:26):
Hey everybody, welcome to Standing Out in a Hub
podcast.
This is Jim and Laura theoffice.
Goddess is with me.
Speaker 3 (00:31):
Hello everyone.
Speaker 2 (00:32):
All right, laura.
All right.
We bought land about four yearsago.
Yes, maybe four and a halfyears ago now.
Speaker 3 (00:40):
Oh, maybe Something like that.
Yeah, something like that.
Speaker 2 (00:42):
So what I didn't?
I knew it was a thing, but Ididn't really quite understand
because, living in a little citywhere I grew up, we didn't have
to deal with mineral rights.
Speaker 3 (00:56):
My first question was do we have the mineral rights?
And you're like what do youmean?
Speaker 2 (01:00):
Yes so.
So let's, talk about that meanyes, so so let's talk about
explain what mineral rights are,because I don't like the.
I kind of understand theconcept of it, but I don't know
why you'd give them up totally Inever got that either.
Speaker 3 (01:17):
So, for example, let's say um, we'll talk about
property.
Where I grew up, that was aboveus.
They had a huge tract of land.
They sold their mineral rightsto a coal company for a shit ton
of money.
Speaker 2 (01:32):
Well, how much money are you talking about?
Speaker 3 (01:35):
It was quite a significant amount, like
thousands upon thousands.
Speaker 2 (01:39):
Okay.
Speaker 3 (01:40):
And that whole area became strip mined.
And that whole area becamestrip mined, that whole area
became a dynamite blast zone,which is actually, ironically,
why our wells ended upcollapsing, because they were
(02:00):
putting off blasts that were notsupposed to be put off.
They were too strong, like coal, like gas oil, things like that
that you sell to a company andthen you give them the right to
come onto your property andmonitor that.
You lose those rights when yousell those.
They stay with that companythat has purchased them, so you
can't just like so like, let'ssay, that place up above me
(02:22):
where I grew up, when they wentto sell that property.
Eventually there would havebeen no mineral rights with that
, because that was all stillwith the coal company to to be
able to mine all of that sobasically sold off the land for
them to come in and do whateverin the hell they wanted to.
It totally tear it up.
Speaker 2 (02:41):
Yes, dig down and then, when they're done, like
all right, here's your land backyeah, pretty much, and you have
no say.
Speaker 3 (02:48):
They can come in at any point in time, they can do
anything they want.
You have absolutely no controlover any of that when you give
up your mineral rights, which iswhy it is so important if you
are buying property in thecountry, you need to find out
about the mineral rights, youneed to find out what the
mineral rights, you need to findout what the exceptions are to
those, if there are any, and youneed to make sure that you are
(03:09):
comfortable with that and okaywith that.
So for me, I wasn't.
I didn't want anybody to haveany rights to my property.
I didn't want anybody to havethe right to come up.
The only thing we did was wegave a right of way to the
electric company to be able tofollow their electric up here
and keep track of that line yes,yeah, well, we got a
transformer right comes up theproperty and then it's.
(03:31):
I don't know how far is that itwas from the house 30, 40 yards
maybe from the house there's atransformer, so that, that's
their line, right that's that'stheir line, that they maintain
that that's that's all them.
So we had to sign the rightover for them to be able to come
up and check that out.
But that's different access,which which they don't have
(03:53):
mineral rights to, that theydon't have mineral rights, but
they have the right to be ableto come up and maintain and take
care of the line, and theydon't have to notify us of that.
Speaker 2 (04:01):
Okay, that's my understanding, yep.
Speaker 3 (04:03):
So that is different than giving away your mineral
rights.
If you have oil, if you havegas, if you have coal on your
land and you give those up, theycan literally come in and they
can tear your land up and theycan totally destroy it and you
can't say squat about it.
So you need to make sure thatif those are actually not with
(04:25):
the property you're buying,where they're at in the stage
what are the plans and you needto follow up on that or you need
to walk.
Speaker 2 (04:32):
Well, there's something here called producing
mineral rights.
Well, there's something herecalled producing mineral rights
and it says, for propertiesgenerating royalty income,
values often estimated at threeto six years of current royalty
income.
For example, if you receive$100 per month in royalties, the
(04:59):
value might range from $3,600to $7,200 for like 36 to 72
months.
However, if future drillingpotential exists, offers can be
significantly higher, sometimesexceeding $25,000 per acre or
even $1 million for a highpotential property.
So this is more for, like, oilor natural gas drilling.
(05:21):
Yeah, so I have inspectedhouses that have a well in the
backyard.
Speaker 3 (05:27):
Well, yeah, an oil.
Speaker 2 (05:27):
Well, um, you had some that had a gas line, so I
remember the I was.
I think I was with you on acouple of those and one lady
that had a gas line I think Ithought it was the one producing
the gas.
She did not have natural gas ather house.
She couldn't.
(05:48):
She was like why can't I get mythat's?
Speaker 3 (05:50):
a really good question, that's a question I
asked them.
Speaker 2 (05:52):
I mean that that line there probably has way too much
pressure to be able to take itto your house.
But they could put a regulatorbut they're not going to take
this.
And it was a pretty good sizepipe, 18 inch pipe.
They're not going to tap intothat to get natural gas, just to
you, but somehow they hadrights for that pipe going
across.
(06:13):
So she did not know anythingabout mineral rights.
My, I told you ask about that.
I'm not really certain about itmyself.
I know you basically sell oryou get a percentage of what
they're producing every month asincome right but sometimes they
can do whatever the heck theywant to, and I don't know what
(06:37):
their contract is?
Speaker 3 (06:38):
it only limit.
Speaker 2 (06:38):
Hey, you only this one strip back here, or because
I doubt they would mineralrights do not go to a strip is
my understanding.
Speaker 3 (06:47):
It goes to that property.
Now I may be wrong.
Speaker 2 (06:50):
That may have changed because it's been changed
because there's no way that youwould, I hope, a mineral, let's
say oil drilling, We'll say gas,We'll say natural gas.
I don't think that.
Hey, they got mineralized thisproperty.
They can come tear your houseup because there's gas
underneath it.
Speaker 3 (07:07):
No, they won't touch it.
It's the land, so it's not theentire property.
They're not going to come anddamage your house or destroy
that, but they will come andthey can literally like tear
down trees.
Speaker 2 (07:18):
There's criteria what of areas they can do.
Speaker 3 (07:20):
I'm sure you put that in a contract but some people
may not, you know, like they'rejust looking at the money maybe,
and just okay, well here, I'mnot going to stay here forever.
Anyways, take them and they,they don't know what they've
(07:43):
given up, like that, the, theplaces that I'm talking about,
that sold mineral rights.
Everything was gone, like justcompletely and totally gone.
Speaker 2 (07:48):
there were no trees, there was nothing that like it
was just completely a loss.
It was sad.
Speaker 3 (07:50):
So, yeah, they just turned into a dirt pit yeah,
pretty much yeah a dirt pit witha little lake in it, because
for some reason they needed therunoff water from something and
I don't know it was a cool thing.
Speaker 2 (08:00):
It kind of turned into a stone quarry.
Speaker 3 (08:02):
Kind of yeah.
Speaker 2 (08:03):
Maybe down the road they can turn that into a little
swimming hole and then haveliability issues for people
swimming in a quarry.
Speaker 3 (08:10):
But yeah, I've known a couple of people that have
sold sold mineral rights inPennsylvania and just like shit
ton of acreage and it justdamaged everything.
Speaker 2 (08:20):
Yeah.
Speaker 3 (08:21):
It was sad.
Speaker 2 (08:22):
So yeah, they can do whatever they want.
So hopefully there's moreregulations on like hey, if
you're, if you're selling therice to I don't know, would
forestry be about the same thing?
It's not mineral rights, you'reselling the-.
Speaker 3 (08:35):
You're selling the timber and there would be a
Timber.
If you're doing that, myunderstanding with that is that
there are specific timbers thatthey're looking for and they
would look at specific trees.
It wouldn't be a clear cut ofeverything.
Speaker 2 (08:47):
Clear cut.
I do not like clear cutting.
Speaker 3 (08:49):
I don't either, so I do not like clear cutting.
Speaker 2 (08:51):
I don't either, so I do know some trees can be quite
valuable.
Speaker 3 (08:55):
Walnut is one.
You can get paid a lot of moneyfor very old walnut trees.
Speaker 2 (09:06):
Well, I think they make gunstocks out of the roots
that's one of the things thatthey do with that, but anyway,
if you're buying a house,selling it.
Speaker 3 (09:14):
Well, if you're selling it, you probably would
be glad they don't.
Speaker 2 (09:16):
You should tell the people, hey, they have mineral
rights.
That should be in all thepaperwork.
Speaker 3 (09:19):
That needs to be in all the paperwork.
That would be a disclosureissue.
If I bought a property and itwas not disclosed to me that I
did not have mineral rights, Iwould be livid.
Speaker 2 (09:31):
Oh yeah, so I am seeing here that, unlike real
estate, there really aren'tcomparables.
It's all private Right.
Values can range from $50,000to over $20,000 per acre.
Speaker 3 (09:47):
Yeah.
Speaker 2 (09:48):
So it all depends on where you're at, what you have
and how badly some company wantsthat or needs it?
Speaker 3 (09:56):
So, like Pennsylvania , coal was a big thing there.
That was a big thing to selloff were mineral rights for coal
.
Speaker 2 (10:05):
And here.
Speaker 3 (10:06):
I think it's more like oil and gas is what I've
seen.
Speaker 2 (10:09):
Oil gas.
There used to be a lot ofmining down in this area.
I don't that's happened so much, but we definitely have a
timber, oh clay.
They mined clay from ourproperty years ago years ago and
I, yeah, I kind of see, I kindof think I guess where they may
have done it.
Yeah, I've seen somewhere thatwas such a long time because we
got fully mature trees and thosethose areas now, those areas
(10:32):
now.
Yeah, so it's all been takenback over by nature.
Speaker 3 (10:43):
Yeah, I can't remember when the there used to
be a brick factory here and theydid the clay for the bricks, so
I'm not sure when the brickfactory closed up.
Speaker 2 (10:48):
But yeah, it would probably have been around that
time when it finished.
I don't know if that was Ohiobrick.
Speaker 3 (10:58):
There was a brick company in nelsonville ohio.
There's one here in mcarthurtoo.
Speaker 2 (11:00):
I see the sign for it like I don't remember when that
one went out, but what I wastold was that it was for that
company gotcha.
Okay, well there's.
I hope that helps explain alittle about mineral rights.
If you are a home buyer andyou're buying something out in
the country, yeah, yeah, learnabout the mineral rights.
Make sure you have access tothose.
Or, if you don't have fullmineral rights, make certain
that you're okay with what'sgoing on with that.
Speaker 3 (11:23):
Or at minimum you're getting some type of money for
it, and if you're not, Igenuinely I would walk.
Speaker 2 (11:29):
Yeah.
So here's the question, Laura.
Okay, let's say I own land, Isold the mineral, yeah.
So here's the question, laura.
Okay, say, let's say I own land, I sold the mineral rights.
I'm getting money for it.
I sell the property to you.
Do you start getting that moneynow?
Speaker 3 (11:38):
I should yes, because that should transfer with the
property.
Speaker 2 (11:41):
What if I didn't tell the company I sold the land?
Speaker 3 (11:46):
At some point they're going to find out when Joe
Schmoe comes out with theshotgun going get off my land.
And they're like, well, we'vegot the mineral rights.
And he's like, no, you don't.
And he kicks them off.
Speaker 2 (11:58):
Because at some point and then that could be a
lawsuit between Because that'snot been a disclosure.
Speaker 3 (12:02):
That would be a disclosure issue Because they
tried to keep the money.
Speaker 2 (12:06):
You know that people are like I'm not telling them
I'll get this money coming infor like a year until they
finally settle it and then hegoes.
At that point I'll be out ofhere I.
Speaker 3 (12:19):
I think that would bite them in the butt way harder
than they think it would maybe,maybe and if not, it should, it
should it.
Speaker 2 (12:30):
Should disclosures are important?
Should Disclosures Areimportant?
Yes, they're definitelyimportant.
So I think that's about it onthis one.
But yeah, mineral rights makescertain you understand those and
how they apply to your, I guess, rural property.
Does anybody sell mineralrights in a city?
I don't think you're in a space.
I don't think you're allowed to.
Speaker 3 (12:51):
Yeah, I don't think you're, you're in a space.
I don't think you're allowed to.
Yeah, and what, what company isgoing to come in?
Speaker 2 (12:58):
and you've got like a little five acre spot and you
know what are they going to do,mine, that or no, they can't do
anything with that Cause you're.
Speaker 3 (13:01):
you've got all these other places around.
It's more of a rural areabecause they need that room.
They need that room and theylike, just come in and like I I
said, they'll just tear downtrees to get to wherever they
need and you have no say in whatcomes down.
Like you're, you're, you'vegiven up that right yep, that
would be why I would never buy aplace without mineral rights.
Speaker 2 (13:20):
But that's, that's just me nope, I'm with you on
that one.
Speaker 4 (13:22):
So all right, everybody, thank you bye guys
you've been listening to thestanding out in Ohio podcast.
Be sure to subscribe on Spotifyor Google Podcasts to get new,
fresh episodes.
For more, please follow us onInstagram, twitter and Facebook,
or visit the website of thebest Ohio home inspection
(13:43):
company athomeinspectionsinohiocom or
jimtroffcom.
That's J-I-M-T-R-O-T-H andclick on podcast Until next time
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