Can Someone Mine Your Property? Mineral Reservations And Your Rights.

Mineral interests, like other property interests, can be severed from the land to which they are attached through sale, lease, reservation, or otherwise. Commentary by Tia Lewis and Frank Erisman of Schwabe, Williamson & Wyatt

In the western United States, this occurred frequently over the last two hundred years, leading to split estates in many Oregon and Washington lands. The mineral interests on many of these lands are now dormant, meaning they were granted long ago and the current holders are unknown or cannot be located.

Reserved mineral interests can be problematic not only because of what the mineral rights owner might want to take out of the ground but also because of the right of access and exploration that may come with them.  Even if the area is subject to strict environmental, zoning or other laws that would preclude the exploration for or extraction of minerals, the mineral reservations on title reports can nevertheless interfere with the sale, development and financing of land.  For instance, reserved mineral interests are frequently described in title policy commitments as exceptions or reservations resulting in consternation for purchasers and lenders. Today, with the widespread interest in oil and gas development, an outstanding mineral interest can cause lenders great concern. Title policy endorsements that provide both the owner and the lender coverage against loss due to the exercise of mineral rights can be purchased in many residential transactions. In commercial transactions or some rural areas, the risk will have to be more carefully weighed, including reviewing whether the reservation precludes access from the surface (promising lateral access under the land only) or offers compensation for surface damage, particularly to improvements on the land.  

For years, surface owners did not have an adequate mechanism through which they could take ownership of dormant mineral interests. While many tried to do so using traditional common law remedies such as adverse possession and abandonment, these typically offer inadequate or incomplete relief and can require expensive litigation. To address this issue, many states, including Oregon and Washington, enacted laws known as dormant-mineral statutes. These laws provide a process through which land owners can acquire mineral rights on their land by extinguishing dormant mineral interests held by others.

The Oregon Dormant Mineral Statute (ORS 517.180) was enacted by the legislature in 1983. Its purpose is to provide a mechanism to remove dormant mineral encumbrances that inhibit the development of land and minerals and the growth of Oregon’s tax base.  Under the law, a mineral interest is defined as any interest in coal, oil, gas, geothermal resources or any other mineral, but excluding sand or gravel. To be removed under the statute, the interest must be privately held, as the definition excludes interests held by the federal and state governments. Such an interest becomes vested with the surface owner if, in addition to certain procedural requirements, it 1) was not acquired in the last thirty years; or 2) was not protected by the recording of a “statement of claim” filed with the county in the last thirty years. Under this rule, a mineral interest may be dormant and subject to extinguishment even if it is being used, so long as it is unrecorded.  

The statute does entail specific, detailed procedures requiring notice of lapse and other procedural steps to extinguish the dormant mineral interest, but the good news is that even though there is a detailed process which must be followed, the law is self-executing, meaning that a judicial order is unnecessary to extinguish a dormant interest as long as the law’s requirements are met. If you have dormant mineral interests on your land or land you are considering purchasing, it would likely be well worth the investment to follow the statutory procedures and extinguish them.

Frank Erisman, of Counsel with Schwabe, Williamson & Wyatt, is internationally recognized in the field of mining law. He focuses his practice on the representation of mining, energy and other extractive clients throughout the world. Tia Lewis, a Shareholder with Schwabe, Williamson & Wyatt, practices land use and real estate law in the Bend office, where she has lived and practiced law since 1993. For questions about dormant mineral interests and how to remove them, contact Frank Erisman at ferisman@schwabe.com or Tia Lewis at tlewis@schwabe.com.  

Schwabe, Williamson & Wyatt, is a multiservice, northwest law firm with offices in Seattle, Vancouver, Portland and Bend.

Reference Materials:

Tracy B. Farrell, Lucas Martin, Glenda K. Harnad & Margaret E. O’neill, Effect of Severance or Surface and Minerals, 53A  Am. Jur. 2d § 159 (2013).

Phillip E. Norvell, Dormancy Mineral Legislation: A Cure for the Malady or Another Affliction, 16 E. Min. L. Inst. ch.12, 432(1997).

Gregory D. Russell, Lauren N. Fromme, Dormant Mineral Acts: Addressing Severed Mineral Interests in a fractional World, 33 Energy & Min. L. Inst. 8, 290 (2012).

Timothy c. Dowd, Clearing Title of Long-Lost Mineral Owners, 54 RMMLF-INST.§ 30.01(2008).