3 Mistakes To Avoid When Leasing Away Your Mineral Rights
If you own commercial property where a particular mineral is present, you may get offers from oil and gas companies or other interested parties to remove that material from your property. These types of agreements are based upon your mineral rights to the minerals that are on your land. Here are three mistakes that you need to make sure that you avoid if you choose to lease your mineral rights.
#1 Always Take Time To Really Consider What You Want To Do With Your Minerals
Often times, when a property owner has minerals present on their property that a company is interested in, the company will approach the owner. Many companies will approach the owner with what seems like a one-time offer. These one-time offers are designed to force you, the owner, to agree to the company's terms for using your mineral rights.
However, you should never feel forced into leasing your mineral rights. You are the one with the cards in your hand. The company wants to access your minerals, and are going to be willing to negotiate the terms. Companies will try to present mineral leases as a one-time offer to get you to accept terms that favor them; however, you have the right to turn down any mineral lease a company presents you with and to negotiate for terms that you agree with.
#2 Make Sure You Read The Fine Print
The fine print on a mineral lease document is just as important as the big points in the mineral lease document. Before you sign any mineral lease, you should also make sure that you read every word on the document. Once you put your signature on the document, you cannot back out or demand different terms. It is a legally binding document that you have to follow.
The fine print often includes information about your options if you feel the contract is breached. Make sure that you and a lawyer look over any mineral lease before you sign it to make sure the finer details of the lease are as fair to you as the big picture is.
#3 Shop Around For The Best Offer
As with most major decisions, it is always a good idea to shop around. Find out what your minerals are worth on the open market. Find out what other people with similar mineral leases have for royalty rate and bonus payments. Make sure that you check and see what the market is for mineral rights and compare it to your offer. Don't agree to a lease if the terms do not favor you.
For more information and help, talk with a local law firm, such as Vandeventer Black LLP.