Eversheds Sutherland property column: March 2020

 

The Ground Beneath Our Feet

The reservations of mines and minerals in a real estate context can be a cause for concern, especially when considering purchasing a property for development. With an eye to an economic opportunity, the registration of mines and minerals with a separate title number is more common than before, with the definition of "land" in the Land Registration Act 2002 including "mines or minerals, whether or not held with the surface". When an application to register mines and minerals is received, HM Land Registry may or may not notify the surface owner; apriority search to protect the purchase of land won’t reveal a pending application to register the mines and mineralsbeneath that surface title number. So the concern is that the very ground beneath the development site may, or may soon, belong to another.

The law of mines and minerals is a niche area of expertise with which all property lawyers should have someknowledge. But the first question to consider, but one that is frequently passed over, is what is meant by theexpression "mines and minerals" so as to be able to assess what might have been separated from the surface title. "Mines" has been taken to include the mines themselves, the strata above and below the mineral seam in order to facilitate mining, and the space left once the minerals have been extracted, for example. "Minerals" is not a catch-all for the ground beneath our feet, but, aside for some specific definitions for some specific statutes (such as the Townand Country Planning Act 1990), it is an expression open to interpretation.

So what are the "minerals" that might belong to someone else? Curiously, given that the resurgence in applications for the registration of ownership of mines and minerals was partly triggered by thoughts of fracking, shale gas, alongside natural gas and oil, belong to the Crown rather than any landowner. Silver and gold also belong to the Crown by default and most interests in coal to the Coal Authority. So a generic exception or reservation of minerals is unlikely to include the most precious things, thought of which likely led to the inclusion of an exception or reservation in the first place.

There are more exceptions to consider too. Minerals are not "the common rock of the district" (an expression coined by the House of Lords in 1910). Minerals must be something exceptional, in value and in character; something rare rather than just the usual make-up of the land in the district. The expression should then be considered in the context of the mining and commercial world: is the substance in question exceptional and then would the mining industry at the time consider it a substance sufficiently precious. To allow a reservation of minerals to take on a broader meaning would risk the exception leaving very little in the grant.

So, registered or not, title to mines and minerals may be more hypothetical than of real benefit. Without extensive geological information, though the reality may remain unknown, and when buying a development site, the potential impact of the reservation will still have to be considered.

The exception of mines and minerals carries with it by implication, even if not expressly stated, a reservation of all powers that are necessary for working the minerals. However, this does not mean unlimited liberty for those exploiting those minerals; without more express provisions permitting it, the surface land must not be damaged and must be supported (but that right of support doesn’t necessarily extend to buildings). And although the exception and reservation (depending on its exact wording) can include the right to search for minerals, this is usually restricted to underground searching and this does not include a right to enter on the surface of the land. While the surface might be protected, for a proposed development, the issues are more subterranean. Would the separation of surface and mines and minerals prevent the proposed development? In particular, would foundations trespass on another title owner’s underground land? The prevailing view is that a minerals reservation is not intended by its nature to prevent surface development. Such reservations rarely go alongside covenants imposed to prohibit development and many reservations in any event contain provisions allowing compensation for existing and future buildings, which would almost seem to imply a presumption of development.

The options faced with such a reservation on a development site are varied. The developer could take a bullish approach and challenge what is likely only to be a qualified title in any event as the Land Registry title indemnity rarely applies to titles to mines and minerals. There are many reasons why proving title to mines and minerals might fail. Land that was formerly copyhold would be subject to a reservation of mines and minerals in favour of the Lord of the Manor; this isn’t title but more akin to a profit a prendre. Frequently local law and custom has to be taken into account and long ago inclosure (which affected 6.8 million acres in England and Wales) may well affect who actually owns any mines or minerals present. It should never be considered a foregone conclusion that a title to mines and minerals necessarily means that the register proprietor is indeed the actual owner and, even then, the only owner of any mines and minerals there might be.

With sufficient information as to the geology of the area, the developer could even challenge that such a title exists. Alternatively, schemes could be designed with a view to minimising any possible trespass. Though even if foundations did trespass onto a strata of mineral, the owner of the minerals must suffer some loss to be able to bring a trespass claim, and damages for trespass well below ground level are likely to be nominal only. Title indemnity insurance is another possible solution for the more cautious.