ULC

Surface Use and Mineral Development Accommodation Act Summary

It is possible for different interests in land to be held or owned by different persons. That is, the same visible geography may be subject to more than one kind of ownership interest. This is because American property law views interests in land as bundles of rights and obligations held by people against or on behalf of other people. Real estate law regulates relationships between people fundamentally, and the actual geography is simply the subject of those relationships.

One way to have different interests in different people in the same geography is to have ownership of the surface interests different from ownership of the mineral interests. What are surface interests? They are, generally, the right to occupy and use the surface of the land in any lawful way - to build on it the lawful structures that are permitted, to rent its occupation and use, and to sell the same, if that is what the surface owner wants to do.

The mineral interest is more confined. It is the right to remove valuable minerals that are found under the surface of the land. Implied in that right is the right to enter the geography on the surface and to use that surface in a manner consistent with the right to remove the minerals below the surface.

If there is a different owner for the surface interests and for the mineral interests, is there a potential conflict? Of course! The owner or holder of the mineral interests has the right to interfere with the surface interest to exercise the mineral interest. With some rare exceptions in the common law, the holder of the mineral interest does not have to compensate the holder of the surface interest for that interference.

In the United States today, there is considerable land, actual geography, for which the surface and mineral interests are held separately. As the demand for valuable and even semi-valuable minerals (gravel, for example, is a kind of mineral) increases, the potential for conflict increases and has increased.

In 1990, the Uniform Law Commissioners have promulgated the Model Surface Use and Mineral Development Accommodation Act (MSUMDAA) in an effort to resolve that conflict. It tries to resolve it by encouraging agreement and accommodation between the holders of the separate interests.

Both the holders of the surface interests and the mineral interests have the power to demand agreement and accommodation over the development of mineral interests. The mineral estate remains, as it is under the common law, the dominant estate. But the owner of the mineral interest can avoid liability to the surface owner only by giving notice of proposed mineral development together with a plan to accommodate existing surface uses or improvements. The surface owner may object and subject the proposed development and the plan to a judicial proceeding. In the proceeding, if the court finds that mineral development is economically, technologically, and economically practicable, and that it cannot be conducted without injury to the surface use or improvement, or that the surface use or improvement interferes with sound practices of mineral development, then the mineral developer can proceed without any accommodation and without liability to the surface owner.

However, if the court finds no probability of mineral development, or that the surface use or improvement does not interfere with such development, then the mineral developer must accommodate the surface owner and may be liable for damages resulting from that development.

The surface owner also has the power to give notice to the mineral owner of any surface use or improvement that might need protection from mineral development. If the mineral owner does not object, there may be liability for injury from any future mineral development. If there is objection, the court follows the same pattern of findings described above.

MSUMDAA also determines the damages in the event there is liability for injury to the surface interests. The losses compensated are, generally, the economic losses suffered by the surface owner.

The conflicts between surface and mineral owners continue in a large part of the United States. MSUMDAA can resolve conflicts fairly and without halting necessary mineral development.