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Gas Facts
• Severed Estates
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Easements and Rights-of-Way
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Title Insurance
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Property Values
Owners, buyers and sellers of real estate face unique circumstances regarding property in La Plata County. It is important to investigate all real estate listings and deeds on land in La Plata County to find out the exact nature of ownership interests. An attorney or professional landman can assist in the discovery of severed estates and clarification of ownership.
La Plata County has published a brochure providing some useful information about gas and oil facilities on private property, titled "Oil and Gas in La Plata County." The brochure is available at the County Courthouse located at 1060 East Second Avenue, Durango, CO.
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Severed Estates
Colorado, like all other western states, recognizes separate ownership of the surface and subsurface (or mineral) estates and the distinct private property rights associated with each. Often, different parties own the surface and the subsurface. This is commonly referred to as "severed estate" or "split estate" lands. The different ownerships may have been created through the reservation of the minerals to the government when the lands were originally patented, or may result from a decision by a previous landowner to separately sell or lease the subsurface mineral interest.
| A mineral estate provides property rights to the natural resources lying below the earth's surface. A transfer of the mineral estate may be accomplished without transfer of the surface estate. For example, a landowner may sell or lease the rights to natural gas or oil found under the surface to an oil company. Later, the same landowner can sell the surface to a purchaser and reserve the rights to all coal that may be found under the land. After these transactions, three parties have ownership interests in this piece of real estate: (1) the oil company owns the oil and gas; (2) the seller owns the coal; and (3) the purchaser owns the surface. |
Most of the property in La Plata County has been severed. In addition, previous owners may have sold or granted right-of-ways or easements that are transferred with the property.
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Easements and Rights-of-Way
An easement is a property interest that one party has in land owned by another, entitling the holder of the easement to use the other's land. Easements are typically in writing, usually in the form of a separate document or by a reservation in a deed. Thus, an easement is an interest in land rather than a mere contractual agreement. When easements are properly created and recorded they are transferred with a land sale and remain in effect.
A right-of-way is a type of easement conveying the right or privilege, acquired through accepted usage or by contract, to pass over, through or under a designated portion of the property of another. A right-of-way may be either private, as in an access easement given a neighbor, or public, as in the right of the public to use the highways. For example, a gas company might send out one of its agents to meet with landowners to negotiate the purchase of right-of-ways or easements for a pipeline.
Because of the long history of natural gas activity in La Plata County, many easements and rights-of-way exist on property in the area. As market conditions demand, new easements and rights-of-way are continuously negotiated for natural gas pipelines and roads. These negotiations are private contractual agreements between landowners and companies seeking access or right-of-way.
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Title Insurance
Title insurance is a contract under which a policyholder is protected from losses arising from defects in the title. A title insurance company will determine if the title is insurable based on a review of the public records. If so, a policy will be issued.
Title policies generally name certain uninsurable losses or exclusions such as mineral rights reserved or separately conveyed, and easements or right-of-ways. By reviewing the exclusions a buyer may be able to ascertain some information about mineral interests and easements. However, buyers should not rely on a title policy's listed exclusions to convey any or all of the information regarding a particular piece of property. Instead, buyers should exercise their right to due diligence and research public records for information about ownership interests associated with the property.
It is recommended that landowners and buyers utilize the services of a professional landman or an attorney when purchasing and researching legal deeds and easements.
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Property Values
Some people worry that natural gas production on severed estate property may adversely affect the property value. The desirability of land in La Plata County has created a robust real estate market with consistently increasing land values.
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