HOA buying underlying mineral rights

Started by MichaelT21 • 3 replies • 294 views

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MichaelT21 (Arkansas)
Posts: 462

Posted:

I just found out that our homeowners do not own the mineral rights under their respective homes. They were sold off separately about 40 years ago. I also found out that we have extensive coal seams under our properties, and in theory, some mineral right owner could drill for natural gas or create a coal mine to start mining the coal.

I'm wondering if it might make sense for our HOA to purchase the mineral rights that underlie our properties? I have no idea how much it would cost but might not cost too much and then we'd forever prevent the extraction of mineral resources under our homes.

Thoughts?

CathyA3 (Ohio)
Posts: 6,299

Posted:

Consult with a lawyer who's well versed in that area of the law.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Quote:

Posted By CathyA3 on 09/17/2022 9:55 AM
Consult with a lawyer who's well versed in that area of the law.

Adding to that, you'll need to talk to the HOA attorney, assuming the board would determine that this is something worth doing (not at all clear to me). From the HOA perspective I think this would be treated like any other proposal to expand property owned by the HOA, meaning it would need an affirmative vote from a super-majority of owners at least. But IANAL.

Didn't you just say in another thread that the owners in your community don't want to pay for stuff? I think this is probably a non-starter for that reason unless someone can convince them that they're in immediate danger of a coal mine being opened up under their feet.

I think the more interesting question for a lot of us is whether or not other community associations are at risk for something like this and, if so, why doesn't this need to be disclosed? Likely answer to the last question: there are probably public documents on file with the county recorder, which counts as disclosure.

AugustinD
Posts: 1,027

Posted:

It appears this is a topic that comes up in the HOA world at times. See for example,

http://neighborsatwar.com/2015/07/your-frickin-frackin-hoa-rights/

Washington, from where the OP hails, has an interesting statute section on the extinguishment of mineral rights if the rights are "unused" for 20 years. Start reading here:

https://app.leg.wa.gov/RCW/default.aspx?cite=78.22.010

Does the Washington HOA statute offer any assistance? It does.

Unless otherwise provided in the governing documents, an association may:
.
.
.
Acquire, hold, encumber, and convey in its own name any right, title, or interest to real or personal property;

(Mineral rights are also an "interest.")

See https://app.leg.wa.gov/RCW/default.aspx?cite=64.38.020

I wonder if acquiring ownership of the mineral rights, using the Washington statute on extinguishment of unused mineral rights after 20 years, could be done lawfully without an owners' vote. Probably not, as the Board would be spending I figure at least $5000 on an attorney here, and a fishing expedition that is likely well outside the four corners of the governing documents is not cool IMO without owners' approval.

But I think paying an attorney for her opinion on whether pursuing the mineral rights, via extinguishment, is worthwhile would be an appropriate use of Owners' money.

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