and James Hausma to discuss Surface Rights vs Mineral Rights in Texas. James is a licensed Senior Property Tax Consultant at Assessment Technologies. Enjoy the information!
Buy Land. Live Well.
SURFACE RIGHTS VS. MINERAL RIGHTS IN TEXAS
U.S. property owners have rights not only to the surface of their land and all structures, but also to everything that lies below the surface. This means that the property owner may control minerals, like gas and oil, that may exist below the surface. If you’re a property owner and are interested in benefiting from the exploitation of minerals, then you may want to consider selling or leasing the mineral rights on your land.
However, these transactions are complicated. What’s more, such a deal might allow you to remain the owner of the surface rights, but only with certain restrictions. The more you understand about these rights, the better able you’ll be to make informed decisions.
WHAT ARE SURFACE RIGHTS?
“Surface rights” refers to the right to control the surface of the land. Existing structures are included under this umbrella. Typically, when property is purchased, the transaction includes the surface and mineral rights. An exception occurs when the seller stipulates that they are only selling surface rights and will retain mineral rights. Alternatively, an owner could de
WHAT ARE MINERAL RIGHTS?
When a person or entity holds “mineral rights” on a property, then they own the mineral content beneath the surface. Texas law dictates that mineral rights only refer to oil, gas, salt, uranium and sulfur. However, other minerals may be included in these rights if they are specifically named.
It’s important to understand that when someone holds the mineral rights to a piece of property, they are automatically granted access to the property’s surface. This means that they may use any reasonable means to locate and produce the minerals under the surface. Accord
ingly, the owner of the mineral rights may build a road, dig trenches, construct a well or perform other projects that may interfere with the ability of the owner of the surface rights to use their land as they choose.
Fortunately, all property owners are protected by the State of Texas Landowner’s Bill of Rights. The Bill guarantees that the interests of property owners are protected, particularly if a government entity wants to seize land for public use. If a person or entity wants to claim all or a part of any land in Texas, then the current owner has the right to legally protest and demand fair compensation for the taking.
When mineral rights are granted to a person or entity other than the person or entity that owns the surface rights, the mineral rights owner has quite a bit of power to access and make changes to the land. However, the surface rights owner may ask for a surface waiver that makes certain portions of the surface off limits to the mineral rights holder. The surface rights owner additionally may claim compensation for damages to their land.
THE EFFECT ON PROPERTY TAXES
In Texas, the mineral rights owner may be taxed on the value of minerals that are extracted from the land. Federal, state and county taxes all may be due. Surface rights owners may have to pay taxes on any royalties they receive from the sale of minerals, and damage to the land may affect how much property tax the surface rights owner owes.
ABOUT THE AUTHOR
James Hausma is a licensed Senior Property Tax Consultant at Assessment Technologies and is considered an expert throughout Texas in property tax issues relating to the mineral and healthcare industries. In addition, James is a member of various professional organizations, including the Institute for Professionals in Taxation (IPT) and the Texas Association of Property Tax Professionals (TAPTP).
James is a 1986 graduate from Texas A & M University and received his Bachelor of Science degree in Economics.
Managed by Kyle W. M. Graham, Agent with Ruple Properties. Kyle can be reached or followed as follows