Estate Interests in Land
Published on Wednesday, 01 June 2011 09:06 Written by Lawrence D. Brudy & Associates, Inc.
Category: Blog
What you need to know
For starters, Pennsylvania laws recognize three distinct estates in land:
- The surface estate
- The mineral estate
- The right to surface (subjacent) support.
These estates are severable (they can be separated from each other), and different owners may hold title to the separate estates in and under the same tract of land. In addition to the surface estate (the non-mineral portion of land or one restricted to a certain depth), the estates most often conveyed are the oil, gas and coal interests.
If the previous owners (chains of title) have not excepted, reserved or conveyed these interests, they will transfer with the owner of the surface estate.
In order to determine conclusively who owns the different estates, an oil, gas and coal search should be conducted, stretching back to the early 1800s. A Certified Opinion as to the ownership of the interests should be provided.
If these interests are not specifically excepted and reserved or conveyed by a separate instrument, they will convey with the surface owner. If the oil, gas and hydrocarbons are leased for development, the owner of these interests needs to consider the potential revenue stream and whether those interests and rights under the lease will convey or be assigned wholly or partially to someone else.
Also, in many Pennsylvania oil and gas leases, there is a provision for “free” or “reserve” gas available to the owner. This usually amounts to 150,000 to 400,000 cubic feet annually. This gas, if included in the lease, runs with the owner on whose property the well sits. Reserve gas is under lease with the owner or lessor of the oil and gas interests, but can be assigned to the surface owner if the estates are severed. (If the gas is from a deep well, it probably will need to be treated before it can be used residentially.)
The Pennsylvania Association of Realtors provides an oil, gas and mineral rights addendum to the agreement of sale that can be and should be used for every sale and purchase.
This addendum discloses whether the seller has “excepted” the oil, gas and/or mineral interests and intends to “reserve” the same, and it provides the buyer with a due diligence period for an examination of these interests. This due diligence period can be elected by the buyer to determine whether the seller owns the oil, gas, and/or coal interests. But without a certified title opinion, there is no guarantee that the seller owns the interests, even though they are currently under lease.
Coal interests can be severed, excepted and reserved by deed for seam or vein. When severed, coal interests bring special rules for subjacent or surface support (physical support of the land). A conveyance of the coal generally provides the acquirer with the right to mine and remove it without harm to the owner’s land.
It is not uncommon in Pennsylvania for coal seams to be owned by several entities. The interests of coal owners, mine operators and oil/gas exploration and development companies may conflict where development of oil and gas takes place in an area with a workable coal seam.
When buying, selling, leasing or representing a party to a transaction involving oil, gas and mineral interests, it is prudent to seek the advice of an experienced attorney who understands the interplay among the estates, and through careful drafting of conveyances, assignments, deeds and leases, add value to the land.
Contact Lawrence D. Brudy, Esquire for more information at This e-mail address is being protected from spambots. You need JavaScript enabled to view it.