Subsurface Rights

Definition of "Subsurface rights"

Written by

Sonya Burnett

RE/MAX East

When it comes to the subsurface rights definition, the meaning needs to be defined from the US perspective as these rights are not a default elsewhere on the planet. In general, in the US, real property owners have exclusive rights to the soil and minerals underneath the land. Due to these subsurface rights, if you own 10 square feet of land and discover a gold deposit under the land's surface, you just got wealthy, my friend. 

This was in part the reason for which California was seen as the “Golden State” because those who went there first got rich fast due to the gold discovered in the area. For the same reason, discovering oil deposits on your land helped many people rise to power due to something that the planet gave. In contrast, some European countries see these precious natural resources as property of the state. Because of this, no one individual can get incredibly rich and control the resources used by the many, as they only own a few feet of the ground beneath their property. 

Subsurface Rights in the US

Still, even in the US significant limitations on subsurface rights can be imposed. When they are expressively stated they have to be disclosed in the title deed at the time of acquisition. If no restrictions are indicated, the buyer can exercise full rights to the property. It is important to note, however, that in some states, the owner of the land is not automatically assumed to also be the owner of the subsurface as seen in other countries. That is, land ownership may be separated. 

When it comes to property rights, there are these subsurface rights but also surface rights. That is why there is a difference between them. Surface rights are easy to understand and identify. The owner of surface rights has the right of use to everything that is situated on the surface of the property within the boundaries of the property. These include built structures, plants, and water. Subsurface rights, however, cover elements that can be found beneath the surface of the property where oil, coal, gas, oil shale, metals, uranium, and phosphates can be found.

Subsurface rights can be independently owned as they are not always connected to surface rights. They can also be divided between multiple owners. For example, while the father holds the surface rights, he divides the subsurface rights between his children. He gives rights to gold to his eldest child, oil to his middle child, and uranium to his youngest child. Aside from being very rich, that family can also control the price of those resources. A dream for some can become a nightmare for others. They can also sell the subsurface rights to companies or retain them and ask for a fee from companies extracting the subsurface resources. This type of agreement is also known as a subsurface easement.

Why are subsurface rights valuable?

In many areas, subsurface rights can be extremely valuable because of the existence of oil, natural gas, and minerals, and those must be acquired separately. It’s easy to see why many people are interested in either buying or renting subsurface rights. This gives the owner of the land a way to retain a potential revenue resource even if they move elsewhere. They can sell the property as a whole or retain subsurface rights through a portion of the resource’s sale.

That is why the most sought-after subterranean resources in the US are oil and natural gas. That is why these resources can be extracted and sold to gain revenue. Much larger companies can come and make offers that your everyday Joe can’t refuse, which is how these resources end up being controlled by a handful of people.