Can I lease a piece of property out with a gas well on it?

Question

I am buying property in NY on land contract. They hold mineral rights to property. It also has a gas well on it that they own. Can I charge them a lease/rent on that piece of property? Thanks.

Answer 1

Read/research the deeds, by going to the courthouse and reading them, also purchase copies. Those deeds will answer your question, as this information is likely spelled out in the deeds. Also, hire a lawyer to read *all* documents, including those at closing, and to attend the closing, so you have some protection.

Disclaimer: I am not a lawyer, nor do I claim legal knowledge. Always consult a lawyer.

Answer 2

Determine whether the mineral rights were effectively passed, operator to produce such records. You should have a copy of an original oil and gas lease and whether it covers all acres. There could be language in the lease that might cause it to collapse to only xxxxx acres held in a producing unit for which you might receive royalties. If you have this lease, you might consider retaining a qualified Oil and Gas attorney to review it for interpretation and validity. You indicate that "they hold mineral rights to the property" but its unclear whether a company has just finished drilling a well on the property. If so, and If they have done this legally, then they must have a lease from prior owner on the minerals. If you are purchasing the property and the well has not already been drilled, does the original owner have the lease? Many leases are recorded in their respective County Courthouses and if one exists you should be able to visit the courthouse and obtain a copy. If you know the legal description of the land it will speed things along.

Another thing to consider is hiring a consulting geologist to research the public regulatory and commercial records for the well and see if s/he could provide you some information regarding the well. Items perhaps might include the drilling permit, when the well was officially "spud" - began drilling. The dimensions and configuration of the regulatory unit on which it is being drilled. Things like this. The Society of Indpendent Earth Scientists or SIPES has a website - www.sipes.org - and along the left side of the homepage you can click on "referral sytsem" and then click on "geologists" on the following page, try entering the producing area of the property into the search field and this search will deliver a list of geologists who may be able to assist you. It's probably worth a couple emails or phone calls.

Answer 3

The short answer is that if they have mineral rights, the well is not yours and they have the right to place it there. But you also have the right to burn your trash next to it :)