(1269) Comm - Article - Mines and Minerals

Leading Title Insurance

LEGAL RIGHTS TO MINES AND MINERALS - WILL THE LAW BE CLARIFIED? Mines and minerals can add potentially significant value to land in the UK depending on its geography. There are thought to be about 2,000 mines and quarries in the UK producing fossil fuels and materials today, ranging from lithium in Cornwall, tungsten in Devon and fluorspar in Derbyshire.

The business of mineral extraction and mining continues to be a profitable one.

But, who owns the rights to mines and minerals under the land and how is their legal ownership registered and protected – if at all? The law is not entirely satisfactory; a fact recognised both by industry and the Law Commission which has recently recommended changes to the rules to give clarity to land owners.

For the most part, mines and minerals are held in private ownership across the UK. HM Land Registry holds title information on the legal owner of the land surface – and the mineral rights, where that information is available.

However, the surface land owner is not necessarily the person with the rights to the subsurface mines and minerals. This means that land and property buyers and property developers need to understand that their legal ownership of the land does not always include the rights to the mines and minerals under it.

What’s the existing law?

Under the Land Registration Act 2002 (the Act), mines and minerals include “any strata or seam of minerals or substances in or under any land, and powers of working and extracting any such minerals or substances”. The registration of mines and minerals is not compulsory unless there is a registrable disposition. Importantly, the Act allows a voluntary application to register mines and minerals at any time if the applicant can prove good title (other than statutory exceptions such as gold, silver and petroleum (in its natural state) which are Crown property, and coal which vests in the Coal Authority).

Voluntary registration can still take place at any time. This means that land and property owners run the risk that the rights to mines and minerals under the land can become the subject of a voluntary application for legal ownership at the Land Registry.

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In addition, as of 13 October 2013 manorial rights lost their overriding status which means the land can be sold free unless the rights are protected on the register. As a result, this led to many landowners, particularly the Church Commissions and Lords of the Manor, registering their mines and minerals interests.

It is, therefore, not unusual for a title to specifically exclude mines and minerals from property ownership. If they are excluded, an index map search will determine whether they have been separately registered and an application can then be made for an official copy of the registered title to find out the legal owner.

‘If more estates in mines and minerals were registered, it would be easier to establish who owned them.’

That’s not to say that the owner of those rights and minerals has an unfettered right to go onto the property and land to access the mines and minerals if there is no specific right to do so. The underlyng conveyance or deeds should be checked to determine what rights in respect of the mines and minerals have been excepted.

What’s proposed?

The current position is unsatisfactory because of this uncertainty. The Law Commission has made various recommendations for updating the land registration system in England and Wales, including key recommendations in the context of mines and minerals.

The aim is to bring the legal rights to mines and minerals that are held apart from the surface onto the land register.

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notification should be given to surface owners of an application to register an estate in mines and minerals beneath their land, regardless of whether it is to be registered with qualified or absolute title.

The Law Commission has taken the view that the creation of a new estate in mines and minerals suggests an intention to exploit the mines and minerals, so on that basis, it is reasonable to expect the estate to be registered.

As stated in its report, “if more estates in mines and minerals were registered, it would be easier to establish who owned them”.

Whether and when the government will implement these recommendations is not yet known, though it’s probably a case of ‘when’, not ‘if’ - given that Brexit negotiations are continuing to prove hugely distracting for the government.

How indemnity insurance can step in to cover the risks Meanwhile, given the current lack of certainty, many property owners and developers will understandably be concerned about the potential implications. Fortunately, title indemnity insurance is usually available where development and construction work could be affected by mines and minerals rights noted on the register, or where foundations will trespass into the mines and minerals.

With an effective policy in place, the risks of a compensation claim and / or an application for an injunction will be covered. Where there is no such notice on the register, indemnity insurance can also protect against the risk of a third party seeking to exercise their purported rights to the subsurface mines and minerals.

The specialist underwriters at First Title can provide the policy for your client’s specific circumstances. Finally, a word of warning: don’t be tempted to contact a mines and minerals estate owner because you might not then be able to secure insurance.

The recommendations are: •

the introduction of new triggers for the compulsory registration of estates in mines and minerals, particularly on a transfer for valuable consideration, and As the preferred provider of Legal Indemnities Insurance

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