Did you know that landowners frequently do not own the mines and minerals beneath their land? Kevin Lee, who leads our property litigation team, examines this historical quirk that is increasingly causing problems for the new wave of post-recession development.
Coal, gas and other valuable minerals have long been nationalised, but in many cases the ownership of other minerals beneath land has historically been severed from the surface land. Some Land Registry titles expressly confirm that the title excludes mines and minerals, but even where the Land Registry title is silent there is no state guarantee that the minerals are included, nor is there any obligation on the owner of minerals to register their ownership.
Particularly with the scare stories circulating about fracking (although legally that is another kettle of fish entirely), it is inevitable that some landowners will worry that third party ownership of minerals beneath their land could lead to undesirable mining operations taking place. Even where mining is unlikely, that does not mean that third party mineral ownership can be ignored.
We are dealing with an increasing number of cases where the purported owners of the mines and minerals beneath development sites are alleging that the development will interfere with their rights. Some developers are paying off these claims to make them go away, but my advice to developers is to think twice before opening the chequebook. If you receive such a claim, there are several questions that need to be asked:
- Can the claimant prove that they are the rightful owner of any mines and minerals beneath the land?
- Is there anything actually there?
- If there is, will the proposed development actually interfere with the mines and minerals?
In most cases, the proposed development simply won’t involve digging deep enough to penetrate the mineral strata.
Where there is any risk of mines and minerals issues affecting a development, the developer should also consider taking out indemnity insurance at an early stage, to protect against the risks and inevitable costs of a challenge by the minerals owner. Waiting until their claim arrives will be too late!