How to Transfer Mineral Rights

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Mineral rights are legal rights to any mineral on a piece of land. Minerals include gold, silver, coal, oil, and gas. [1] If you want to transfer the rights to these minerals to another party, you can do so in a variety of ways: by deed, will, or lease. Before you transfer mineral rights, you should confirm that you own the rights that you seek to transfer.

Part 1
Part 1 of 2:

Preparing to Transfer Mineral Rights

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  1. Generally, there are four types of mineral rights that you might own. They include: [2]
    • The right to the oil, gas, or mineral deposits. This is the most expansive right to have. With this right, you can extract the minerals or contract with another party to extract them for you. You may own mineral rights in conjunction with the surface rights to the property, or you may own just the subsurface mineral rights (while someone else owns the surface of the land).
    • A lease agreement to the minerals. You may have contracted for a lease. A lease generally lasts for a specific set of time. While the lease is in force, you have the right to enter the property and determine if there are suitable minerals. You may also mine the minerals for the duration of the lease.
    • A right to royalties. You might have a right only to royalties on the sale of minerals, particularly when they are mined by another party operating under a lease. The lease agreement fixes the amount of the royalties.
    • A combination of the above.
  2. People can transfer mineral rights for a variety of reasons. One common reason is that you want to sell the rights to another party for money. You can sell the minerals or lease them to another party. Also, if you already have a lease or right to royalties, you may want to assign them to another party in exchange for money.
    • Also, people who do not sell their mineral rights may want to transfer those rights to their heirs in a will or a trust. In this way, they can make sure that specific people receive the mineral rights.
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  3. Before transferring the rights, you should confirm that you actually own the rights that you want to transfer. If you want to transfer rights to the minerals themselves, then you must confirm that you own them. Although you might own the land that sits on top of the minerals, you should check that the mineral rights were not separated from the rest of the land at an earlier time. [3]
    • To search for mineral rights, you will have to search the chain of title. As you search, you will look to see if mineral rights were severed from the land and transferred to someone else before you were deeded the property.
    • For more information on how to perform a title search, see Find Mineral Rights.
    • If you are trying to transfer a right to royalties or a lease, then you should look for a royalty or lease agreement. If you cannot find them, then contact the party you contracted with. That person is probably the owner of the surface land.
  4. You might own many different kinds of minerals on a plot of land. You can choose to transfer rights to some minerals but reserve to yourself the rights to other minerals. [4] Think about which minerals you want to transfer and which ones you want to keep.
  5. You should meet with an attorney to discuss transferring mineral rights. A qualified attorney will be able to advise you on the best way to transfer rights. An attorney can also advise you regarding whether you should transfer mineral rights at all. Since mining for minerals might impact the surface of the land, you might decide not to transfer any rights.
    • An attorney can also help draft any legal document that you will need. If you want to add mineral rights to a will, then the lawyer can draft a codicil to your will. An attorney may also draft a lease and help you in lease negotiations, especially if you are negotiating with a large corporation.
    • To find an experienced attorney, you should visit your state’s bar association, which should run a referral program. Look for an attorney who specializes in either mineral rights or in oil and gas. If you cannot find any attorney with those specializations, then seek someone experienced in land use or real estate law.
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Part 2
Part 2 of 2:

Transferring Mineral Rights

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  1. If you want to sell the mineral rights to another person, you can transfer them by deed. You will need to create a mineral deed and have it recorded.
    • You should check with the county Recorder of Deeds in the county where the land is located and ask if a printed mineral deed form is available to use. You can then fill it out with the necessary information.
    • If your county does not have a mineral deed form, then search on the internet for one. You can also ask an attorney to draft one for you.
    • Sign in front of a notary. You will need to have the deed notarized. [5] There should be a notary at the Recorder of Deeds office. Be sure to bring sufficient personal identification, such as a valid driver’s license.
    • Record the deed. The Recorder of Deeds should then send copies to the person granted mineral rights by the deed.
  2. You can put mineral rights in your will. After your death, the rights will pass to the beneficiaries listed in the will. If no specific beneficiary is listed, then the mineral rights will pass to whoever is named the beneficiary of your residuary estate.
    • To draft a codicil to your will, see Write a Codicil . You are strongly encouraged to meet with a lawyer to look over your will and make sure that you have followed the proper formalities.
    • If you are interested in transferring your mineral rights to your heirs, then you should think about creating a family holding company and transferring the rights to the company, such as a limited liability company (LLC) or a partnership. Because this is a complicated process, you should talk with an estate planning attorney.
  3. If you want to lease mineral rights to a third party, then you will need to create a contract. With the lease, you as the owner grant to the lessee the right to develop and produce minerals on the parcel of land that is leased. [6]
    • Leases typically include a “bonus” paid by the lessee to the owner when the lease is signed. [7]
    • Leases also typically incorporate royalty provisions, under which the lessee will pay the owner money made from the extraction and development of the minerals. Should no minerals be extracted, then leases often contain provisions for the payment of rent. [8]
    • Often, the lessee drafts the lease contract. [9] However, if you are the owner and need to draft the contract, then consult with an attorney. The attorney can also help you value the worth of the minerals on your land, so that you can bargain for a fair royalty rate.
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      Tips

      • If you choose to lease mineral rights, you should look for provisions in the lease that protect any buildings on the property. You should also look to protect any crops, livestock, or timber. In particular, pay attention to lease provisions that state when extraction can be performed, where equipment can be stored, and who will pay to repair damage to the land. [10]
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      • Transferring mineral rights is often more complicated than transferring other forms of property, such as a car or house. Accordingly, you should seek legal assistance if you are considering a transfer.
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      References

      1. ↑ http://www.nolo.com/legal-encyclopedia/who-owns-the-minerals-under-your-property.html
      2. ↑ http://geology.com/articles/mineral-rights.shtml
      3. ↑ https://www.michigan.gov/documents/deq/ogs-oilandgas-mineral-rights_257977_7.pdf
      4. ↑ http://www.nolo.com/legal-encyclopedia/who-owns-the-minerals-under-your-property.html
      5. ↑ http://www.legacyroyalties.com/files/Download/Sample%20Mineral%20Deed%202013.pdf
      6. ↑ https://www.michigan.gov/documents/deq/ogs-oilandgas-mineral-rights_257977_7.pdf
      7. ↑ https://www.michigan.gov/documents/deq/ogs-oilandgas-mineral-rights_257977_7.pdf
      8. ↑ https://www.michigan.gov/documents/deq/ogs-oilandgas-mineral-rights_257977_7.pdf
      9. ↑ http://geology.com/articles/mineral-rights.shtml
      1. ↑ http://geology.com/articles/mineral-rights.shtml

      About This Article

      Article Summary X

      If you are looking to transfer mineral rights in a will, deed, or lease, prepare by identifying the minerals you wish to transfer and confirming that you have those rights. Check with an attorney to see if your mineral rights give you the right to extract oil, gas, or mineral deposits from a piece of land, a lease agreement to these materials, or a right to royalties on their sale by another party. Once you have confirmed that you own these rights, a qualified attorney can help you determine the best method for proceeding with the transfer process. For more advice from our Legal co-author, including guidelines for transferring by deed, will, or lease, read on!

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