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Bill Aims To Inform Homeowners Of Mineral Rights

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(credit: CBS)

(credit: CBS)

DENVER (AP) – It’s not uncommon for property owners in rural Colorado to get an unexpected knock at the door or a letter informing them that someone else owns the minerals in the ground below their land and plans to exploit them.

It can be unsettling for homeowners ignorant of mineral rights law. Some face the shock of an energy company’s plans to install a rig nearby. One Colorado lawmaker says she’s heard enough from her constituents to introduce a bill requiring home sellers to tell prospective buyers who owns those mineral rights.

Republican Rep. Marsha Looper of Calhan in rural El Paso County said many people are unaware when they buy a home that any mineral rights on their property can be a “severed estate” not attached to the house they just bought.

“Why weren’t we ever notified?” Looper said homeowners tell her. “When we purchased our property, why wasn’t there ever a disclosure that somebody may be knocking on our door and telling us – not asking us, but telling us – that they’re going to put a rig on our property? And they’re going to put that rig where they believe it needs to go?”

Looper’s proposal, which would take effect in 2013 if it becomes law, requires property sellers to disclose to buyers if there is a severed mineral estate and the name and contact information of its owner.

Some industry representatives generally insist that residents do their own research, rather than rely on regulation.

“They’re responsible for doing the due diligence,” said David Sikes, president-elect of the Tulsa, Okla.-based National Association of Royalty Owners.

Sikes was speaking in general about mineral rights because he said he had yet to familiarize himself with the proposed legislation.

Neil Ray, president of the Rockies chapter of the National Association of Royalty Owners, said property owners can find whether there’s a severed mineral estate on their land through their county clerk and recorder or through the Bureau of Land Management if there is a federal interest.

Tisha Schuller, president and CEO of the Colorado Oil and Gas Association, said the organization has long favored educating prospective property owners about severed mineral rights.

“While we have not seen what the final bill will contain, if it improves disclosure to buyers of residential or commercial property regarding the potential for mineral development on their properties, we favor such disclosure,” Schuller said in a statement.

Previous legislation addressing state mineral rights has failed. A 2001 bill would have given homeowners severed mineral rights if they went unused for 20 years.

Looper said her bill does not go that far.

“It’s so people know before they buy, it’s just disclosure,” she said. And it is information she said will become more important as oil and gas companies capitalize on the Niobrara shale formation that extends from the Wyoming-Colorado border through much of the Front Range, including Looper’s El Paso County district.

Looper said her aim is not to hamper with energy production, but to inform buyers.

“I don’t want to negatively impact oil and gas production in the state of Colorado,” she said. “As a Republican, and as many policy makers in the state of Colorado, we appreciate disclosure and then allowing that buyer to decide.”

By Ivan Moreno, Associated Press

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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