Winter Park Home, Volume 4 / Issue 4, 2006We all have dreams of finding natural wealth in our own back yard, just as Jed Clampett did. Of course the likelihood of your striking oil in Central Florida is as probable as finding three feet of snow on your lawn.
What you may find, though, is a letter in your mailbox from an individual who owned your property 40 years ago, informing you that he not only owns the mineral rights below the surface of your land, but also, that he has the rights to dig on your land for those minerals (called rights of entry). This letter may go further on to state that for a mere $800 he will release those rights of entry in your favor. Impossible? The Orlando Sentinel reported a similar incident recently in its Central Florida Edition, but for property in Palm Beach County. Could it happen here? Let’s look at some facts:
Ownership of land consists of surface rights (to build on or to use the surface of the land) and mineral rights (the rights in the minerals that lie beneath the surface of the land, which includes the right to dig for those minerals, unless otherwise released). Both the surface rights and the mineral rights are automatically transferred when property is conveyed, unless a contrary intention is stated in a deed reserving those mineral rights.
Historically, the State of Florida reserved these mineral rights, including the right of entry, in many of its land transfers to private citizens. Often referred to as “Murphy Deeds,” these conveyances recited the State’s reservation of rights to “a one-half interest in any minerals taken from the subsurface area, together with the right of entry.” Ultimately Section 270.11 of the Florida Statutes was passed in 1986, effectively releasing the State’s right of entry for mineral reservations for any “contiguous tract of less than 20 acres in the aggregate under the same ownership.” Most Florida residence owners, and many commercial property owners, therefore do not have to be concerned with this right of entry for a State of Florida reserved mineral interest.
Interestingly, however, even though the State has granted the automatic release of the right of entry by this statute, it will rarely release the rights to any royalties in the underlying minerals.
Private rights of entry-where a private individual or business entity retains a percentage interest in the mineral rights, together with a right of entry, are more problematical. In Lake and Volusia Counties, for example, many properties are subject to these reservations, and the Lake County public records are laden with releases for specific tracts of land.
Should you be concerned? It depends on where you live in Florida. In Orange and Seminole counties, these private mineral reservations are unusual; in Lake and Volusia counties, they are more prevalent. In Northwest and Southwest Florida, these mineral reservations are commonplace.
If you receive a letter requesting money to release the right of entry, the first thing you should do is look at your title insurance policy and determine if there is an exception for mineral reservations on Schedule B. If there is none, you should contact your underwriter at the number provided on the jacket of the policy for guidance. If you fail to contact your underwriter you might effectively waive any rights to make a claim under your policy. Even if there is an exception for these mineral reservations, your concerns probably should be minimal. In developed residential areas the owners of these mineral reservations are generally not interested in actually mining the land, but rather in generating income from these releases. Additionally, permits would need to be obtained from various governmental authorities not only to dig for the minerals, but also, realistically, to uproot property owners from their homes.
Clearly, you should NOT pay anyone for a release without first determining whether or not the claim is legitimate and the release benefits both you as the current property owner, and all future owners of the property. If the matter isn’t resolved by your title insurance policy and your underwriter, you should consult with an attorney to determine your rights.
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Frank Pohl founded Pohl & Short, P.A. based upon the belief that a high quality small commercial law firm was needed in the Orlando, Florida area as an alternative to the large commercial law firms. He still believes that client responsiveness and satisfaction has a place in a fast changing legal profession. Frank has been involved in the Central Florida community for more than twenty-five years. He has been a dedicated past board member of many local organizations over the years. Frank graduated magna cum laude with a B.G.S. Degree from the University of Miami in Coral Gables, Florida; attended the University College at the University of London as an undergraduate studying British literature and British history; obtained his Juris Doctorate Degree in 1979; and obtained a Masters of Law and Letters Degree (LL.M.) from New York University School of Law in 1980. Frank is a member of The Florida Bar, the California Bar, and the District of Columbia Court of Appeals. He is also admitted to the U.S. Supreme Court. He has served on the Orange County Bar Association Real Estate Committee and is a member of the The Florida Bar’s Real Property and Corporation and Business Law Section. He has also served on the Florida Bar Grievance Committee.
1 comment:
Who would have guessed... thanks for bringing this up.
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