Minerals are commonly defined as a ‘substance of exceptional use, value and character’. Oil is likely the first which springs to mind when thinking of what may be under your land, but other minerals which could belong to you are limestone, gravel, shale, and clay. And of course, pertinent to the local economy in North Yorkshire at present, polyhalite; potash.
It can’t be assumed that you own the minerals under your land; minerals and the right to mine them can be sold in their own right, or more commonly, they can be reserved by a vendor when selling his land to a third party.
Land can also be subject to ‘manorial rights’, and if it’s registered with the Land Registry, an entry will be noted on the title to the effect that the minerals remain in the Lord’s ownership. It’s worth noting that such manorial rights ceased to be an overriding interest in October 2013, so it can often be the case now that buyers will take title to reserved mineral rights if they have no notice of them, and the legal owner has failed to register the rights to protect their own interests.
Whilst the exception of mineral rights shouldn’t concern buyers looking to purchase a residential property (it is unlikely that permission would be forthcoming from the local authority to mine minerals in residential areas – and, it could be argued, if the minerals under the surface were of any value, would developers have built houses on them in the first place?), buyers of open land should pay particular attention to the title deeds and ask their lawyer to check the position with regards what lies beneath the surface.
You will probably be familiar with the Sirius project for the mine near Whitby. Sirius discovered during test drilling in the area that landowners were sitting on the proverbial gold mine; the world’s largest deposit of potash, said to be worth around £2.2bn.
As the 400 landowners owned the minerals under the surface of their land, and the right to mine them, Sirius engaged in lengthy negotiations with them and their eight law firms, to ultimately reach an agreement for royalty payments. Whilst the company have declined to divulge just how much will be paid, it’s thought that several large landowners near to the mine will become multimillionaires over the next few years.
The position is of course much different if the mines and minerals are excepted from your ownership. Had the 400 landowners in North Yorkshire not owned the rights, the legal owner would have been the one to agree to sell them, and he would be the next in line for millions in royalty payments. No discussion with the surface landowner, no seeking permission. Whilst as the surface landowner you can object to planning applications to mine the minerals, there is no certainty that your objections will be upheld.
The second risk when buying open land without the benefit of owning the minerals underneath, is the restrictions this brings when developing the surface land. Normal agricultural workings and other works such as construction of roads are allowed, however anything requiring deeper excavation – for example, drilling a bore hole to source water, or the installation of a wind turbine – could technically interfere with the ownership of the mines and minerals underground. The theoretical risk here is the legal owner of the minerals taking action against you for trespass. Sound ridiculous? It’s your land, why can’t you do as you wish?! Welcome to the world of land law! The best course of action if you find yourself without ownership of the mines and minerals, is to speak with the legal owner before carrying out any potentially intrusive works.
What if you can’t identify the legal owner? The rights to mines and minerals can be registered in their own right but often aren’t, as it can be difficult to prove ownership, and the extent of it. So you should always make detailed enquiries of your seller, and ask your lawyer to carefully check the registered title and thereafter the (often more useful) pre- registration deeds. If the owner still can’t be identified, indemnity insurance should be considered.
Don’t hesitate to contact Crombie Wilkinson when looking to buy your property and land; we have a team of legal advisors specialising in rural land law who can allay any concerns you have throughout the purchase process.
This blog was written by Adele Holliday, Licensed Conveyancer, Crombie Wilkinson, Malton.