YOU HAVEN'T GOT THE MINERALS: UNDERSTANDING MINES AND MINERALS EXCLUSION

You Haven’t got the Minerals: Understanding Mines and Minerals Exclusion

Introduction

When it comes to purchasing land, the term "freehold title" often implies ownership of both the surface and subsurface rights. However, there are instances where mines and minerals are intentionally excluded from freehold titles, in a similar way in which sporting rights (profits a prendre) can be excluded and owned by a third party.

Why Mines and Minerals are Excluded

The exclusion of mines and minerals from freehold titles has historical roots, dating back to the development of property law. Landowners recognised the economic significance of subsurface resources, leading to the separation of surface rights from mineral rights.

In the North East of England, The Church Commissioners as the successor in title to the Bishop of Durham, have claimed title to swathes of mines and minerals.

Impact on Selling Land

For our landowners, the exclusion of mines and minerals can have implications. Ensuring that we work into any promotion timeline the work required to secure and deal with Mines and Minerals rights at the appropriate juncture avoids issues at a later date.

The duality can create a complex web of ownership and usage rights, potentially affecting the land's value and marketability if not dealt with in advance.

The impact on selling land can manifest in several ways:

Uncertain Future Ownership: Mineral rights may be owned by a third party, such as a mining company or individual. This introduces an element of uncertainty regarding future ownership and land use, making potential buyers wary. It may be that the rights are excluded from the Freehold Title, but that an owner is now unknown and has not registered their rights, making the handling of the matter even more delicate.

Negotiation Challenges: Negotiating with mineral rights holders can be a complex process. You may need to secure agreements to ensure unimpeded use of the land, which can be time-consuming and costly.

Dealing with Mines and Minerals When Planning or Developing Land

For individuals considering planning or developing land with excluded mines and minerals, a proactive approach is crucial. At Richard Roberts this starts at the first meeting:

Title Examination: Conduct a thorough examination of the title to understand the scope of the mines and minerals exclusion. This will provide insights into the rights and restrictions associated with the land. The exclusion could reference specific depths, in which case the proposed development may not affect those rights at all.

If the title to the mines and minerals is unknown and investigation shows that it has likely been forgotten about, we may be able to deal with this by indemnity insurance. If the title has been formalised and registered, this is not going to be a suitable strategy.

Negotiate Agreements

If mineral rights are owned by a third party, negotiating agreements that clarify land use rights and address potential conflicts. These agreements will usually be for the purchase of the title to those rights. Of course, you would not wish to exercise the purchase unless planning was approved and a sale completed to a buyer, so these agreements can be complex.

Usually, the owner of Mines and Minerals will want their legal fees covered for entering into the agreement. At Richard Roberts we cover all legal expenses associated with acquiring third party rights on behalf of our landowner clients.

While the exclusion of mines and minerals from freehold titles adds a layer of complexity to land transactions, it is not an insurmountable obstacle. The key is to deal with it in a timely manner which reduces impact on land value and makes the site attractive to purchasers when the site obtains a consent.

By understanding the historical context, potential impacts, and adopting a proactive approach, we can navigate these challenges successfully. At Richard Roberts, conducting thorough due diligence and creating a plan are crucial steps in ensuring a smooth and informed process when dealing with land that excludes mines and minerals.