What lies beneath – a cautionary tale

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Do you know what really lies beneath your feet? Mines and minerals expert David Towns has some advice on avoiding issues that could be lurking deep below your development.

Forget the fairly laughable early-noughties horror movie. If you’re a developer or a landowner, the murky details of what actually underlies your site could have some genuinely shocking implications for future development work.

You could be sitting on a wealth of minerals that you don’t own or have the right to interfere with, even if you own the land above, and failure to identify this could prove costly. It is a mystery I’d recommend you get to the bottom of as early as possible.

Haunted by ‘severed’ minerals

Changes to the law in 2003 prompted a raft of applications by landed estates and large organisations (such as the Crown Estate and the Church Commissioners) to review their historic property rights.

Most discovered that they owned many acres of minerals and mining rights underlying land they had previously sold off, often hundreds of years ago. Similar rights were also found to be attached to the ownership of manorial lordships. These ‘severed’ minerals are now big business for those who own them.

Since 2003, many of these minerals owners have registered their interests with Land Registry. The registers can be fairly vague, referring only to “mines and minerals”, or can contain swathes of information about precisely what is included in the title. Either way, a registered minerals title underlying a development site can cause a real headache.

Why are underlying minerals a potential nightmare?

Because funders, including the mortgage lenders of end purchasers, are nervous about third party rights over land. In the case of minerals, funders are also nervous about claims for trespass.

Claims for trespass to mines and minerals can be met with incredulity: “Come and take your minerals away then!” is often the response. Unfortunately, that is not how it works.

The owner of minerals will generally own the underground strata or space they occupy (the “mines”). Putting something into that space (for example, foundations for a wind turbine or a large building) may therefore constitute a trespass, much like how a gutter overhanging a boundary is actionable by law. It could mean an injunction preventing a development from going ahead, or a claim for damages.

How can you avoid being bitten?

Early due diligence is key: Investigate the title to the land you are interested in and consider whether or not it includes the mines and minerals. If not, are they registered? Is it otherwise clear to whom they belong? Is it clear what precisely the minerals title includes or is it more generic?

What mineral substances actually underlie the site and do they legally fall within the mineral owner’s title? Will what you are planning actually interfere with the substances identified and are there any other commercial imperatives which will dictate the approach you take?

Lots of questions to ask and lots of answers to analyse and understand. If there is no identifiable issue, you’re likely to be free to continue with your plans. If, however, a third party minerals owner is identified, you need to take a commercial view: Do you seek insurance against the issue or look to engage with the mineral owner to reach a resolution you can both live with?

The issue of severed minerals affecting development sites is well-established, but what lies beneath needn’t become a horror story. Tread carefully, take early, specialist advice about how to identify and deal with the issues, and your development can expect a happy ending.

For help and advice on any land and commercial property legal issues, call David Towns on 0191 211 7826 or email [email protected]ckle-llp.com.