A question about "appurtenances"

[Taylor Kendrick]

Hi there,

I came across a section on appurtenances in my RE course and wanted to explore a hypothetical. First, here's an example of subsurface rights as an appurtenance (from the course):

Example
An oil company buys the rights to the oil beneath a piece of property. The oil company now owns the subsurface rights to that property (one of the property's appurtenances) and can transfer or keep them as they wish. Should that property be sold again in the future, the property owner would convey all rights to the buyer EXCEPT the oil rights that were no longer the landowner's to sell. The new buyer would have to honor the pre-existing oil rights of the oil company.

My question is: is it possible to transfer oil rights but not mineral rights? If I gave oil rights to one entity and mineral rights to another, what would happen if both entities discovered their rightful resource in the same place? 

[Chris Seveney]

Quote from @Taylor Kendrick:

Hi there,

I came across a section on appurtenances in my RE course and wanted to explore a hypothetical. First, here's an example of subsurface rights as an appurtenance (from the course):

Example
An oil company buys the rights to the oil beneath a piece of property. The oil company now owns the subsurface rights to that property (one of the property's appurtenances) and can transfer or keep them as they wish. Should that property be sold again in the future, the property owner would convey all rights to the buyer EXCEPT the oil rights that were no longer the landowner's to sell. The new buyer would have to honor the pre-existing oil rights of the oil company.

My question is: is it possible to transfer oil rights but not mineral rights? If I gave oil rights to one entity and mineral rights to another, what would happen if both entities discovered their rightful resource in the same place? 

 technically yes but I am not sure how realistic it is unless its a very large parcel. reason I say that is typically when you give up rights they will use them (for example oil well), which requires access etc. It is most likely challenging to have mineral rights and oil rights by two different entities on a property - but great question.

[Taylor Kendrick]

Quote from @Chris Seveney:

Quote from @Taylor Kendrick:

Hi there,

I came across a section on appurtenances in my RE course and wanted to explore a hypothetical. First, here's an example of subsurface rights as an appurtenance (from the course):

Example
An oil company buys the rights to the oil beneath a piece of property. The oil company now owns the subsurface rights to that property (one of the property's appurtenances) and can transfer or keep them as they wish. Should that property be sold again in the future, the property owner would convey all rights to the buyer EXCEPT the oil rights that were no longer the landowner's to sell. The new buyer would have to honor the pre-existing oil rights of the oil company.

My question is: is it possible to transfer oil rights but not mineral rights? If I gave oil rights to one entity and mineral rights to another, what would happen if both entities discovered their rightful resource in the same place? 

 technically yes but I am not sure how realistic it is unless its a very large parcel. reason I say that is typically when you give up rights they will use them (for example oil well), which requires access etc. It is most likely challenging to have mineral rights and oil rights by two different entities on a property - but great question.

Thanks for weighing in, Chris! Yeah, this one just got the gears turning on a tangent because it almost makes it sound like if you buy one subsurface right, you get them all. But I figured that couldn't be the case at all times because, in theory, I'd think some properties would be large enough to facilitate multiple entities.

[Chris Seveney]

Quote from @Taylor Kendrick:

Quote from @Chris Seveney:

Quote from @Taylor Kendrick:

Hi there,

I came across a section on appurtenances in my RE course and wanted to explore a hypothetical. First, here's an example of subsurface rights as an appurtenance (from the course):

Example
An oil company buys the rights to the oil beneath a piece of property. The oil company now owns the subsurface rights to that property (one of the property's appurtenances) and can transfer or keep them as they wish. Should that property be sold again in the future, the property owner would convey all rights to the buyer EXCEPT the oil rights that were no longer the landowner's to sell. The new buyer would have to honor the pre-existing oil rights of the oil company.

My question is: is it possible to transfer oil rights but not mineral rights? If I gave oil rights to one entity and mineral rights to another, what would happen if both entities discovered their rightful resource in the same place? 

 technically yes but I am not sure how realistic it is unless its a very large parcel. reason I say that is typically when you give up rights they will use them (for example oil well), which requires access etc. It is most likely challenging to have mineral rights and oil rights by two different entities on a property - but great question.

Thanks for weighing in, Chris! Yeah, this one just got the gears turning on a tangent because it almost makes it sound like if you buy one subsurface right, you get them all. But I figured that couldn't be the case at all times because, in theory, I'd think some properties would be large enough to facilitate multiple entities.

 yes if you had significant acreage you could probably split the rights, which I would think would need to be like 50+ acres or so, something smaller I am not sure how it would be split if they both have rights. I could only imagine the legal agremeents needed on who has what right/easements etc.

[Bill B.]

It may not add much but as it happens…

My new build home in Las Vegas (DR Horton build) specifically says I do not have any subsurface rights. I don’t know what they expect to find. We’re not a hotbed of oil, diamonds or even lithium. But I guess it doesn’t cost them anything to keep them. I bet if they found a subsurface problem, I would own those. :-)

ps. How would they get to any of these subsurface rights with 1/8th acre lots and barely 20 feet in any direction between any houses and any roads. 

[Melanie P.]

Developers and interim owners have for decades retained these rights when selling the rest of the real estate in case oil is ever struck a la Beverly Hillbillys. So, yes, it is possible to separate them. Unless you work in Oil & Gas don't expect to come across many deals with rare earth minerals or oil.