|The article below follows on from our series of seminars for Junior Land Buyers. Click here to read the previous article.|
The presence of a mines and minerals exception on a title register to a property is not unusual.
‘Mines and minerals’ are defined by the Land Registration Act 2002 to include ‘any strata or seam of minerals or substances in or under any land and powers of working and getting any such minerals or substances’. Gold, silver and petroleum are property of the Crown and coal belongs to the Coal Authority.
The common law presumption is that a landowner owns everything below the surface down to the centre of the earth. However, a mines and minerals exception means that a landowner does not necessarily own the mines and minerals beneath the surface of their property.
Mines and minerals will be excluded if a previous landowner wished to retain ownership of the minerals beneath the surface in order to excavate and work them in the future. The identity of the minerals owner can usually be revealed by undertaking a Search of the Index Map (or SIM) search at the Land Registry.
What impact does this have on a property?
Although the legal owner of the minerals has no right to enter onto the land above the minerals, they do have the right to dig up the surface of the land to remove the minerals that lay beneath the property. With this, the stability of the land can be compromised which can often lead to subsidence causing many issues for landowners and future developers.
If the current landowner of the property wishes to develop their land, extra caution must be taken to ensure that the works (such as the laying of foundations) do not interfere with the minerals beneath the surface so that the offence of trespass is not committed.
If development work had begun without the consent of the owner of the mines and minerals, they could apply for an injunction to prevent any trespass into the mineral strata and demand a compensation payment. This can be detrimental to the landowner if the land was purchased with the intention to develop the area.
What action should you take?
When looking to purchase a property, as well as undertaking a ‘SIM’ search at the Land Registry to find out the legal owner of the mines and minerals is, it is always a good idea to correspond with the seller of the property to ascertain whether the rights granted in relation to the mines and minerals have ever been exercised. Gaining as much information as possible about the excepted rights will stand a potential landowner in good stead for the future.
Indemnity insurance should be considered when acquiring a property with a mines and minerals exception. This insurance will protect a landowner against any potential claims for damages as a result of trespass submitted by the minerals owner.
If you are considering indemnity insurance it is important not to try to contact the owner of the mines and minerals, or to disclose to any party that there is (or will be) an indemnity policy in place. Doing either of these could make it impossible to obtain a policy or could invalidate an existing policy.
When enquiring about an indemnity policy, the indemnity insurers will consider various factors when deciding whether to offer a landowner the cover that is required. It is for this reason that, as mentioned above, it is important to obtain as much information about the mines and minerals exception as possible from the Land Registry and other sources. Every little detail can increase the chance of obtaining the relevant insurance.
|Ashfords run a series of seminars for anyone involved in the world of real estate development who would like to learn more about the legal process behind the deals. The seminars are led and organised by our team of residential development solicitors, providing an opportunity to share knowledge and build lasting connections in an informal and friendly environment. Here are a list of future seminars for Junior Land Buyers, please let us know if you would like to receive notification of these events.|