Housebuilder Top Tip - Mines & Minerals: Developer Considerations

Published 30 November 2020

Developers must ensure they are acquiring exactly what they require for their proposed development both on the surface and below the surface.

1. Ownership of mines & minerals : Background

1.1 The common law presumption is that a landowner owns everything below the surface.

1.2 This presumption may be rebutted by severance. Severance is where title to the mines and minerals below the surface are separated from title to the surface.

2. Developers should consider the following when acquiring land where mines and minerals are or may be excepted

2.1 Effect on marketable title: Necessary rights to develop or indemnity insurance against the risk of injunction can be crucial to ensure good and marketable title can be passed down the chain (i.e to future owners or plot owners and their mortgagees)

2.2 Installation of foundations and services: Trespass may be a risk where title to the surface and the minerals have been severed and work is carried out below the surface. Owners of the mines and minerals must establish that they have suffered some loss in order to have a claim.

3. What should developers do?

3.1 Due Diligence: In conjunction with your Solicitor you ought to ascertain whether title to a property is affected by rights to mines and minerals so as to establish any risk to your ability to develop it. This might not be always clear from the registered title. It may be necessary to review pre-registration deeds, if available.

3.2 Surveys: It is prudent to carry out technical surveys to gain a greater understanding of the surface and what lies beneath in addition to the potential impact on such mines and minerals as a result of development.

3.3 Negotiate? There may be a commercial solution. Perhaps an owner of mines and minerals is willing to dispose of their interest or their rights. However, if contact is made with an owner it is unlikely indemnity insurance will be available.

3.4 Adapt proposals: Assess the potential for proceeding with the development as planned, or with amendments.

3.5 Seek title indemnity insurance: Indemnity insurance is often available where ownership cannot be confirmed, and there has been no recent mining activity. Whilst insurance will not provide you with the necessary rights to develop the Property, it will provide you with protection against your losses in the event that a problem arises during the development.