How Does a Mineral Deed Work?

One of the things you should know before you try to sell or buy property is that you don't have to buy all of the rights or options available on that property. It's not uncommon for some sellers to carve up the various rights and sell them in the appropriate deeded form to different interested parties. One of these special deeds is known as the Mineral Deed.

What Is a Mineral Deed?

A Mineral Deed provides the buyer with the option to extract minerals on the specific parcel of land; however, the deed does not contain title to the surface land or any of the buildings attached to the property.

How Does a Mineral Deed Work In Practice?

While a mineral deed doesn’t include ownership of the surface land it will usually contain a reasonable allowance to enter the land and improve the land in order to extract minerals. It will also almost always include a partial license to remove and sell those minerals, though in some cases, the seller may retain a few rights. It also incorporates the right of the buyer to incorporate third party companies to help remove the minerals found on the property.

What’s the Difference Between a Mineral Deed and a Royalty Deed?

Mineral Deeds provide significantly more rights than a royalty deed, though the two both address the harvesting or extracting of minerals and their sale. The biggest right that a developer gets from a mineral deed that he cannot get from a royalty deed is the right to improve the land sufficiently to remove the minerals. These improvements could be anything from drills to pumps to processors.