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New state law will allow landowners to regain mineral rights

Megan Miller
The Cumberland Times-News Sun Oct 03, 2010, 08:03 AM EDT

— CUMBERLAND — A new state law took effect Friday that has nothing to do with cell phones, and everything to do with buried treasure.

It’s the Maryland Dormant Mineral Interests Act, and what it does is create a method for landowners to regain the mineral rights to their properties, even if those rights were leased or sold away generations ago.

That’s often the case in Western Maryland, where the mineral rights to many acres were acquired by coal companies in the 1800s or cleaved off and retained by property owners after they sold the surface land to someone else.

In those examples, the land may have changed hands a dozen times over the course of decades, but the mineral rights, long forgotten, still belong to the coal company or the descendants of the original landowner.

That information is seldom recorded on the modern deed and finding it can require extensive research in county land records, according to James Braskey, title abstractor for Allegany-Garrett Titles and Settlements.

“This family came in and thought they have the mineral rights to their property,” Braskey said. “I get back to 1882 and there’s a deed, and in that deed the seller reserved the minerals. So I told the family, they don’t have the mineral rights. Those are with Mr. X and his heirs.”

Two years ago Braskey conducted approximately 60 mineral rights searches for companies interested in Garrett County properties, and in half of those cases, the rights belonged to someone other than the surface landowner.

If the surface owners wanted to lease the mineral rights for themselves they had few options for moving forward, especially because the mineral owners were often unknown — and probably, themselves unaware of their ownership of the rights.

But starting Oct. 1, 2011, the owner of a surface property can take legal action to regain the property’s mineral rights.

Minerals, as defined in the act, include oil and oil shale, coal, sand, gravel, gemstones, clay, geothermal resources, and the list goes on. But the real impetus for the legislation was natural gas — specifically, natural gas in the Marcellus shale formation.

Delegate Wendell Beitzel said the process began several years ago when a group of Garrett County landowners pooled about 40,000 acres and began negotiating with a company interested in leasing their mineral rights to extract the gas.

“As leases were prepared we found out a lot of people thought they owned the mineral rights to their property and didn’t,” Beitzel said. “It’s nearly impossible to find out who owned that mineral under the surface because they don’t carry the information on the land records anymore.”

Beitzel sponsored the bill in the Maryland House of Delegates. Sen. George Edwards introduced it in the state Senate. The legislation was modeled after similar laws that have been enacted in about 10 other states.

“It’s a clarifying act that allows people … if they own the surface to get the minerals under the surface,” Edwards said. ”It’s something to clarify the whole situation, because it’s very confusing, and we think this is a good approach.”

The act only applies in situations where mineral rights have been dormant, or unused, for at least 20 years. If an owner of the mineral rights has exercised them in any way during that period — such as through exploratory drilling, mining, payment of taxes, or recording of a legal document that somehow gives evidence of the continued existence of their rights — the mineral rights are not dormant, and the surface owner can’t use the new law as a method to claim them.

Although the act went into effect Friday, surface owners must wait another year before they can initiate the legal process. That’s partly to give owners of dormant mineral rights time to demonstrate their ownership, Braskey said.

Beitzel said those precautions were built in to protect owners of mineral rights who wish to retain those rights.

“This is not intended to create a method for surface owners to take away the mineral rights of people who legitimately own them,” he said.

One company now has permits pending for exploratory natural gas drilling in Western Maryland. If that company succeeds, Beitzel said he believes many others will follow.

That could mean this law comes just in the nick of time for surface landowners who want to take advantage of a potential financial windfall from natural gas extraction.

It’s also important for landowners who don’t want to participate in the drilling to be certain they have the power to say no.

And for people whose ancestors retained the mineral rights to Western Maryland properties sold long ago, it’s just as crucial to protect those rights, Braskey pointed out. They could be the legal heirs to a potential fortune.

“There are some people out there sitting on literally millions of dollars,” he said. “And they don’t even know it.”

Contact Megan Miller at mmiller@times-news.com

If you are thinking of buying or selling real estate in Garrett County or Deep Creek Lake, Maryland, call Jay Ferguson of Railey Realty for all of your real estate needs! 877-563-5350

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