Mines and mineral rights can be a tricky issue for developers or anyone looking to acquire a property. In law, there is a rebuttable presumption that when purchasing the registered title of a property that this registered title will include the property and all airspace above (up to the heavens) and all of the land below ground.
It is, however, possible that the mines and minerals below the surface of the land could have been ‘severed’ from the land above. What complicates this matter is that it is not always clear, from looking at the title of the property, whether or not the rights to the mines and minerals have been carved out from the title of the property. So how does a developer know what it is purchasing?
There are four key ways in which the mines and minerals could have been severed:
The rights below the surface of the land have been sold separately to the rights above;
The law has granted the minerals to somebody else, for example oil, gas, coal, gold and silver are vested in the crown;
By custom and practice: this is the case in certain parts of Cornwall, Derbyshire and the New Forest; and
Because of manorial rights. Manorial rights date back to feudal times where land was held in a hierarchical structure. Copyhold tenure was owned by a tenant and the Lord of the Manor retained a freehold interest in the property. The tenant would enjoy possession of the land but manorial rights (such as fishing rights, hunting rights and mines and minerals) belonged to the Lord of the Manor. The Law of Property Act 1922 transferred copyhold rights into freehold rights but manorial rights remained (although new manorial rights could no longer be created after 1925). Manorial rights continued to affect the freehold property.
It is not compulsory for mines and minerals (that have been sold separately) to have been registered and, as mines and minerals are overriding interests, they can remain hidden for many years. The only way a developer can be sure whether or not the mines and minerals are included in the title to the property would be, after checking the title register, to look back at the historical deeds and documents dealing with the property. This is a near impossible task given the move towards compulsory registration and given how easy it is to misplace paper.
As a brief aside, the position is slightly different with manorial rights which are dealt with in a similar way to chancel repair liability, that is that after 12 October 2013, manorial rights lose their protection as overriding interests. Manorial rights may be lost if they have not been registered before this date.
Why is this a problem for developers?
If mineral rights have been severed from the surface of the land, the developer will be committing a trespass if they carry out works beneath the surface (such as laying foundations and/or services) of the property. It can be frustrating for a developer who has spent a lot of money obtaining planning to then have an owner suddenly come out of the woodwork. The owner may seek to claim damages (although they will have to prove a loss which is often nominal) or more problematically they may try to seek an injunction. So how can a developer reduce the risk?
How can developers reduce the risk?
Prior to purchasing a site, developers are advised to carry out a SIM Search to determine whether or not there are any separately registered interests affecting the property. Developers could also consider the need for indemnity insurance. Ultimately, the developer will need to undertake a risk analysis taking into account its knowledge of the site and surrounding area.
Going forwards, a draft Land Registration (Amendment) Bill has proposed changes to the current regime, notably a recommendation that compulsory registration is triggered by the grant of a leasehold estate in mines and minerals that are held apart from the surface. That would act as an alert to potential purchasers. A government response is awaited.