19 July, 2018
Developers installing foundations, carrying out groundwork and any earthmoving works may involve going through or removing a mineral layer. If that mineral layer is owned by someone else, piercing it will be a trespass against the minerals owner. This could lead to a liability for damages or, more worryingly, could lead to an injunction to stop work on the site.
If minerals end up belonging to someone other than the owner of the surface land, the minerals are 'severed'. There are four ways in which minerals rights can be severed. These situations are:
Minerals owners such as the Lord of Manor or the Crown have made a large number of applications around the country to register their titles to mines and minerals arising from ancient manorial rights. These have given rise to new entries reserving minerals at Land Registry, which need careful consideration.
These applications have occurred as a result of the Land Registration Act 2002 (the "Act"), and that after 13 October 2013 a purchaser of registered land will not be subject to any overriding interest unless they are protected on the title so long as the land has been sold for value after this date. Those that were already registered on the title will remain in force. This protection does not apply to minerals titles which have been severed in any of the other ways than mentioned above.
A notice of the rights can be entered on the title where a minerals owner can show good evidence of title to the minerals and can apply to register the minerals with a separate title. This type of application can be made at any time, even after 13 October 2013, and it is up to the registered owner to object and apply to remove the notice.
The risk with a reservation of mines and minerals is that the minerals owner may allege trespass if the foundations interfere with the minerals. Plot purchasers may be concerned about the risk of the minerals being worked in the future and possible subsidence, even if the reservation makes it clear that the minerals owner cannot enter the land to extract or cause any damage to the surface land.
If a title contains a reservation of minerals, it is important to carry out a search of the index map to find out if the minerals have been registered under a separate title. This separate title will provide details of the minerals owner.
The Land Registry will sometimes put an entry on a registered title to say that the minerals are not included (or are 'excepted'). To find that out the extent (type, depth and area) you would have to look at the pre-registration deeds to see if the severance was done by conveyance and, if so, for the terms of the severance. However, many pre-registration deeds have been destroyed once registered. Even if you do have pre-registration deeds, a description of the severed minerals in a conveyance is often unclear or ambiguous. Understanding which minerals were intended to be severed is difficult.
Housebuilders are also at risk because the Land Registry indemnity (i.e. where the Land Registry will pay compensation if the registered title is incorrect) does not apply to severed minerals within a registered title unless the registered title specifically notes that the minerals are included within it, which is rare.
It is important to obtain the full detail of the minerals reservation from the Land Registry as the precise wording may help to reduce the cost of the insurance. For example, the reservation may stipulate that it relates to minerals at a particular depth and sometimes the depth is as low as 200 feet. The combination of depth of minerals and no ability to enter the surface means there should not be a risk of trespass from putting in foundations. In spite of this, an indemnity policy that covers both trespass and subsidence as it should give greater comfort to plot purchasers.
A developer may be tempted to approach the minerals owner to find out if it is prepared to sell its title to the minerals under the site but there is a serious danger in taking that step. If the owner does not consent or negotiations prove fruitless - the developer would not be able to obtain mining indemnity insurance. This is because insurers do not permit contact with the owner.
Insurance will be considered on a case by case basis, however if the land has been sold for value after 13 October 2013 insurance will not be required as there is no risk of overriding interests.
If you are looking for any more information with regards to our services view our Housing & Regeneration section. You can also contact Jennifer Hankinson or Lyndsay Baxter in our Housing & Regeneration department on 01772 220022. Alternatively send any question through to Forbes Solicitors via our online Contact Form.