What lurks beneath?
Some might think that ‘mining’ is just a problem in the old coal pit areas of the UK and that land owners elsewhere don’t need to consider potential mining-related pit-falls (excuse the pun).
However, ‘mines and minerals’ are a relevant topic in the East of England too, where aggregates and gravel extraction are big business. This becomes even more pertinent for large infrastructure projects such as the A14 upgrade where bulk excavation materials are needed.
It’s a complicated area of law, and one that is not always fully understood. The status of what lurks underneath your property can be tricky to establish. Here is a summary of the possible legal position beneath your feet.
The Basic Presumption of Ownership
The basic rule of freehold ownership is that the person who owns the surface of the land also owns the substrata down to the centre of the earth. Therefore, your property could also include potentially valuable mines and minerals.
Separate Strata Ownership
Despite the presumption, separate ownership of minerals is common, and can arise in several ways, for example:
- The ownership of and/or a right to dig for minerals may have been expressly reserved by a seller when selling the surface land. This reservation may be apparent from the property’s registered title, or by examining pre-registration deeds.
- Ancient rights to minerals were often reserved by lords of the manor under England’s historic feudal land ownership system. These rights may be noted on the property title or protected in other ways. If the land was “formerly copyhold” this means the lord transferred the freehold to the ‘commoners’ but may have reserved the rights to the minerals.
The land registration system in England and Wales goes some way towards addressing the problem of subterranean third-party ownership, but the system is not perfect.
Titles that have been properly registered at the Land Registry may refer to the “mines and minerals being reserved or excepted”, or to the overriding interests of a lord of a manor.
A Land Registry search of the area might also reveal other registered titles below the surface. However, this is not definitive, and unlike the surface, there is currently no mechanism for mineral titles to be compulsorily registerable at the Land Registry when they change hands. Therefore, there could be separate ownership underground which cannot be revealed by Land Registry searches alone.
Consequently, a certain amount of local knowledge, together with inspection, is key.
Separate mineral ownership doesn’t necessarily mean someone is going to knock on your door and ask to dig up your garden, but there is that risk. You also risk interfering with underground ownership if you dig down to put in foundations or create a basement, thereby committing trespass.
For lenders, mines and minerals present a risk that must be addressed, and obtaining a proper legal opinion is essential. For a start, owning the minerals and having a right to excavate them are two different things, so matters must be considered on a case-by-case basis. Legal indemnity insurance can be a suitable way of addressing the risks.
Conversely, owning the minerals beneath your feet could be a blessing in disguise. Obtaining and processing aggregates continues to be a profitable business for specialist companies in the eastern region, and commercial arrangements can generate significant royalties. Similarly, if someone else owns the minerals, but needs your co-operation to access them, a profitable deal may be done.
We regularly assist clients with conducting thorough due diligence on their property deals. Depending on the circumstances, we will also consider underground ownership – be it to avoid a pit-fall or to uncover a gold mine!Back to Our Thinking →