Buying land without mineral rights in Pennsylvania comes with a lot of financial incentives, but how do you buy a property with just surface rights?
To buy land without mineral rights in Pennsylvania, check property listings online, contact landowners, inspect the property, confirm the mineral rights agreement, hire an appraiser and attorney (optional), and make an offer on the parcel.
After extensively researching Pennsylvania real estate, I have gathered enough information to determine how to buy land without mineral rights in the state. In this article, we’ll be taking a closer look at the procedure of buying the surface rights to land in Pennsylvania to ensure that you are making a wise and profitable real estate acquisition.
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What Are Mineral Rights?
When you buy a parcel with full rights, you own everything that is above and below the ground. However, when you purchase just the mineral rights, you essentially own what’s below the ground.
Owning the mineral rights of a parcel implies that you are entitled to any of the potential resources below the surface. You can own part of the mineral rights to a property or you can own the land outright. In addition, mineral rights owners can also lease these rights to private individuals and organizations.
Once you own the mineral rights on a piece of land, you are legally allowed to pursue extraction with or without the permission of the surface rights holder, within reason. These are common resources that you are entitled to when owning mineral rights on land:
- Natural Gas
What Are Surface Rights?
Unlike mineral rights, surface rights entitle you to everything that is above ground. This includes all surface resources and also the right to pursue development on the land.
The majority of landowners in the United States own their properties outright, meaning that they hold the surface and mineral rights. However, most people who own these rights only make use of their surface rights, not the mineral rights.
Given that the bulk of aspiring landowners in the country aim to build or buy a home, they are generally not concerned with extracting minerals and resources from below the ground. By owning the surface rights to a property, you can develop the land and build what you want on the property.
You also have the right to modify and change the land, so long as you do not alter the minerals or underground resources. That said, each land acquisition is different, and you need to consider the surface rights of your real estate transaction carefully before you commit to buying land in this condition.
How to Buy Land Without Mineral Rights in Pennsylvania
Buying land without mineral rights comes with a lot of benefits and financial incentives. Since most people who buy land in Pennsylvania are focused on becoming homeowners, surface rights are the biggest selling point in real estate acquisitions.
Pennsylvania currently has a huge selection of property listings on the real estate market that specifically sell land without mineral rights. Before you begin evaluating land listings, consider your ideal property specs, financial budget, and real estate goals.
Having an idea of how you want to use your land and how much you are willing to spend on a parcel will help you narrow down your search options to ensure that you are not wasting energy on listings that are not worth your time. Follow these steps to buy land in Pennsylvania without mineral rights.
Step 1: Check Property Listings Online
The first thing you’ll want to do is look for property listings in Pennsylvania online. There are plenty of online resources that you can utilize to evaluate property specs and conditions before making any formal in-person inspections.
Given that you are looking specifically for land with just surface rights in Pennsylvania, you can generally rule out anything that advertises surface and subsurface rights. This will require a bit of digging and research, as most parcels on the market include full rights. Consider using the following online resources to check property listings in Pennsylvania:
As you evaluate the specs of various parcels online, be sure to shortlist the best candidates that catch your eye. Each site has a filter that lets you see properties that specifically meet your specs and interests. For example, if you are looking for residential land and agricultural land, filter out everything that does not pertain to your search.
Step 2: Contact Landowners
After you’ve shortlisted your ideal property listings, I recommend reaching out to each landowner individually before making an inspection. Each property owner provides their contact information so that you can call them on their phone or reach them via email.
Contact each landowner and inquire about the specs of the land. Ask any questions that you have about the parcel and, most importantly, confirm that just the surface rights are for sale. This is a good way to weed out any candidates that are not aligned with your real estate goals.
Step 3: Inspect the Property
The top remaining parcels on your list need to be thoroughly inspected. Schedule a time with the landowners to come by and have a formal inspection of the land to confirm its specs and condition.
Since you are specifically interested in the surface rights, be sure to inquire about the terms of the mineral rights. Buying surface rights comes with a considerable amount of risk, and you do not want to be caught in a bind if your real estate acquisition goes south.
Be thorough with the property inspection and evaluate all aspects of the land to guarantee that the condition of the parcel is intact and up to your standards. I suggest taking notes and asking for a copy of the mineral rights agreement before you part ways with the landowner.
Step 4: Confirm the Mineral Rights Agreement
The mineral rights agreement is something that needs to be carefully assessed. This legal document essentially dictates what you can and can’t do with your land, given that the mineral rights owner may be entitled to certain rights that interfere with development.
Consider the types of minerals that are most likely to be extracted and look into the terms of the agreement thoroughly. You should be obtaining the mineral rights agreement for every property that you evaluate so that you can compare the terms of each parcel.
Step 5: Hire an Attorney and Appraiser (Optional)
If you’ve dealt with property acquisitions in the past, then you may be familiar with the procedure of buying land. However, when acquiring just the surface rights to real estate, you want to guarantee that you understand the terms of the mineral rights agreement before you commit.
I highly recommend hiring an attorney to look at and assess the document. It can be easy to overlook certain conditions of the agreement, which could have major drawbacks on your land ownership rights down the line.
A Pennsylvania attorney familiar with land rights in the region will have the expertise to professionally evaluate the mineral and surface rights of the real estate to guarantee that you know what you are in for before you sign off on the land.
Lastly, once the surface and mineral rights terms are confirmed by the attorney, it never hurts to hire an appraiser to verify the value of the land. Giving up the mineral rights to a parcel implies that you should be paying less for the surface rights. If the appraiser suggests that the land is overvalued with the current terms, you can use this as leverage at the negotiation table.
Step 6: Make an Offer
The last thing you need to do is make an offer to the property owner. If you are happy with the listed price and the condition of the land, make an offer that you think is fair for the parcel.
However, if you are not satisfied with the terms of the surface rights agreement or the state of the land, drive the price down and negotiate. Having an appraiser and attorney assist you with the surface rights agreement and land value will make it much easier to bargain with the property owner.
Once you and the landowner have agreed on a price, you can sign all legal paperwork, finalize the payment, and claim the surface rights to your new Pennsylvania property.
Factors to Consider When Buying Land Without Mineral Rights
If you want to save money on land acquisitions, buying a parcel without mineral rights is a great way to do it. Given that you are technically only purchasing the surface rights to the real estate, this generally equates to a more affordable parcel.
With that said, relinquishing your mineral rights does come with a considerable amount of risk. You want to be calculated with your decision-making to secure your land rights to the property. Keep the following factors in mind when buying land without mineral rights in Pennsylvania.
Be Aware of Development Restrictions (if any)
The mineral rights agreement will generally specify if there are any development restrictions attached to the land. The mineral owner may have specified specific terms for their land purchase, which could deny the surface owner certain development rights.
For example, an oil and gas company may have reserved portions of the property for mining and drilling activity. The oil and gas rights in these areas would imply that you are not allowed to build or develop these parts of the property.
You need to be careful when dealing with gas companies, as they can often be relentless when pursuing drilling and extraction. Regardless, always confirm if there are any development restrictions that interfere with your real estate goals.
Consider Land Appreciation Rate
As the surface rights owner, your land will appreciate over time. You need to look at every real estate acquisition as an investment. Virtually every parcel will appreciate over time, with or without the mineral rights.
However, you want to verify how quickly your land will appreciate without the mineral rights. If your sole interests in buying the surface rights to a piece of land are to build a private home, you may not need to be as concerned about the appreciation rate.
On the other hand, if you have more ambitious real estate goals to flip or sell the property, it would be wise to understand how quickly the land will increase in value without the mineral rights.
Research Resources in Your Region
Just because mineral owners legally own the resources below the surface of your property, doesn’t necessarily mean they will pursue extraction. Some people purchase land with mineral rights and simply let it sit.
If an oil company bought real estate with mineral rights and there is no natural gas or oil to extract in the region, they will likely postpone any kind of extraction. You can confirm the likelihood of mineral extraction on your land by researching the minerals that exist in your region.
Selling and Leasing Mineral Rights
Keep in mind that mineral rights can be sold and leased. A corporation that owns the mineral rights may offer a gas lease to other companies to pursue drilling. In addition, the same mineral rights can also be sold to other companies and private individuals.
You can use this to your advantage by buying a property with both surface and subsurface rights. As the full landowner, you can then sell or lease the mineral rights to the land yourself to have better control of the terms of how resources are extracted.
About THE AUTHOR
Brittany has been in the land business since 2020 when the world was starting to shut down. Since then, we’ve sold to dozens of people from ATV weekend warriors to camping enthusiasts to retired truck drivers. Our inventory spans mostly in the western United States. We’ve been trained by experience, land acquisition courses, and hundreds of hours meeting with county assessors and clerks, zoning officials, realtors, and land investors. We’ve answered hundreds of questions from people regarding the buying and use of land.Read More About Brittany Melling