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Do You Know Who Owns the Mineral Rights Under Your Home?

Photo by Lisa Sorg

The possibility of hydraulic fracturing in the state has caused some homeowners to think twice about whether they own what’s underneath their homes.  Lisa Sorg (Independent Weekly) reports that mineral rights to properties at many homes built by D.R. Horton were split off at the time of purchase to a Colorado energy corporation. This is a suspicious practice in a state that does not have a history of oil and gas production.  The article “Does a developer’s sale of mineral rights to an energy company foreshadow fracking?” sheds light on what signing off mineral rights could mean for homeowners and for the real estate market.

“For the past two years, D.R. Horton has sold the mineral rights—and the right to drill, mine, store and explore for them—to its Colorado-based energy company on at least 425 of its lots in Raleigh, Cary, Durham, Chapel Hill and other Triangle cities, according to deed records. Coincidentally, the transactions began occurring in the summer of 2010, around the time the push began to legalize fracking in North Carolina.” …

“D.R. Horton is required to disclose the status of the title, including any legal documents such as mineral rights, said Janet Thoren, legal counsel for the N.C. Real Estate Commission, which licenses and regulates real estate agents. The placement in the sales contract and the timing of the disclosure are also important. (Sales contracts aren’t public record, so the Indy could not review one.) If homeowners know before closing about the mineral rights sale, then they may have little recourse. But, Thoren said, notification” at closing, that may not be sufficient. Closing may not be soon enough to make an informed decision.”

That’s when a third homeowner said she became aware of the mineral rights deed. “I wish I had known earlier,” she said. “But it didn’t stop me from going ahead and purchasing the house.” She said she is aware of mineral rights because she owned them under a former home in Orange County. When she bought her home in Brightleaf, she said she was told that drilling “would most likely never happen.”

This raises the question: If it would likely never happen, then why would D.R. Horton sell the mineral rights to its energy company?

“Anyone who learns that it was in a developer’s interest to separate their mineral rights should be very skeptical of statements from them that drilling for gas or other use of the mineral rights is ‘unlikely,'” said Hope Taylor, executive director of Clean Water for North Carolina, which is on the forefront of the anti-fracking movement. “Folks just aren’t aware of how much control of their lives they can lose if extraction happens, and it can have major impacts on their neighbors, too.”

Links to other coverage:

The Herald Sun: “Builder sells homes without mineral rights

DR Home builder consumer complaints

ABC News: “Durham homebuilder keeping mineral rights on homes





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