What Does Mineral Rights Convey Mean?
Mineral rights are a valuable commodity, often misunderstood by those holding them. If you have recently come across a mineral rights document, you must wonder what mineral rights convey means.
Unlike most countries where the government holds rights to subsurface minerals, US citizens can own rights to minerals under their property. The owners can then hold or convey the rights to other individuals or companies.
But, there are many complexities involved when conveying mineral rights which you should know before you sign a document. You’re on the right page if you’re thinking about conveying your mineral rights.
Read this discussion to know everything you need about mineral rights conveyance.
What Does Mineral Rights Convey Mean?
A property’s mineral and surface rights can be held and sold together or separately in the US. If you own mineral rights to your property, you can use, extract, or sell the minerals for a specified duration of your choice.
If you’re not interested in or don’t have the resources to extract the minerals, you can lease or sell your rights to a mining company and earn royalties. However, when you intend to sell your rights, you will come across the term ‘conveying’ in the documentation.
So, what does it mean to convey mineral rights? Mainly, conveying describes transferring the ownership permanently or temporarily to another person. Thus, a sale or transfer of ownership of a mineral rights property is known as conveying.
Depending on the extent of your ownership, there are three primary ways in which you can convey your mineral rights to someone else. These include,
- Conveying mineral rights solely without transferring the ownership of surface rights
- Conveying both mineral rights and surface rights of your property to another owner.
- Conveying surface rights to a new owner while retaining mineral rights of your property.
To understand mineral rights conveyance, we’ve described the entire process in detail to give you further insight on the subject.
How Are Mineral Rights Transferred?
Now that you know what mineral rights convey means, you’re probably ready for the mineral rights you own. Yes, selling your mineral rights to an extraction company in exchange for royalty interests can be pretty lucrative. Still, you should be aware of all the complexities involved in the process.
This way, you can reap the benefits on your own without facing any unwanted consequences. If you want to transfer the ownership of your mineral rights, here’s how mineral rights conveyance works.
Prove Your Ownership
You know that you own the mineral rights to your property along with the surface rights. Great, but do you have something on paper to show the companies you intend to sell to?
Sometimes, the mineral rights owner needs to be mentioned on the property deed, which can lead to confusion. A lawyer or title company will help you find the mineral rights owner. If you own them, your name will appear in the documentation. If not, you’ll have to transfer the ownership to your name before conveying them to another party.
Reach For Legal Help
Once it is clear that you own your mineral rights, then you should get legal help when transferring it to another party. That’s because there are several ways to share the rights permanently or temporarily, and each method has its monetary benefits.
While you can only stay in the loop with some of the necessary information, the right attorney can help you get the best deal. Besides that, with legal help, you can quickly round up the required documents and finish the process.
Conveying Your Mineral Rights
If you want to retain your mineral rights, there are several benefits for that as well. But, if you have decided to transfer them to another owner, you can do so through the three different ways listed below.
Transfer By Will
If you want to retain your mineral rights throughout your life and convey them to your descendants after your death, then you can transfer them by will. You can list the beneficiaries of your choice who will receive the rights after your death or leave the clause unspecified.
In the latter case, your rights will automatically pass down to your living heirs after death.
Transfer By Deed
Another way to transfer your mineral rights to another person is by a legal deed. Remember, mineral rights are not mentioned in most property documents, which means you’ll have to produce a separate deed while selling them.
You will have to get in touch with a Recorder of Deeds and fill out the necessary information in a mineral deeds form. Then, you can sign the deed before a notary and grant it to the person you want.
Make sure to keep copies of the deed as a record for future reference.
Transfer By Lease
One of the most common ways mineral rights is conveyed is through a lease. If you don’t have the resources to extract the minerals under your property, you can lease your rights to a mining company. This company can remove, develop, and use the minerals while paying a royalty interest to you.
While you can quickly negotiate the lease terms between yourself and the company, an attorney can help you get a fair royalty rate.
Should You Convey Your Mineral Rights?
There are several ways to convey mineral rights, but should you convey your mineral rights in the first place? The deal is quite beneficial if you want to sell your mineral rights in exchange for a steady paycheck every month.
Besides that, apart from the selling amount, you can also get royalty interest on any future sales of the resources conducted by the company. However, you should know that mineral rights can only be conveyed in the case of a split estate.
If the surface rights and mineral rights are combined, you will have to retain the mineral rights or let go of the surface rights. So keep that in mind when you plan to convey your mineral rights.
Mineral rights convey means to change the ownership of your mineral rights and transfer it to someone else. You can convey or transfer mineral rights using a will, a deed, or a lease.
However, the process you choose determines what you intend to do with your rights. If you wish for your progeny to inherit them without using them yourself, you can specify it in your will.
On the other hand, if you want to earn royalty interest by leasing your rights to another company, you can do so with some legal help. When making the conveyance, ensure you are aware of the value of your rights before finalizing a decision.