David Ganje: It ain't your gravel, and other problems

David Ganje
Special to the Farm Forum
David Ganje, Rapid City

How does one lose legal rights to a mineral interest claim? By sitting on them, of course, which offers in the way of legal benefits.

What is a mineral interest? The term, "mineral interest," includes any interest in oil, gas, coal, clay, gravel, uranium, and all other minerals of any kind and nature, whether created by grant, assignment, exception, reservation, or otherwise, owned by a person other than the owner of the surface estate.

It is the responsibility of the mineral interest owner to maintain his interest in the minerals. Mineral interest ownership by a party other than the surface owner of the land is not guaranteed forever. The passage of time coupled with the failure to ‘use’ a mineral interest results in the abandonment of a right to claim mineral interest ownership. However, should such abandonment occur, the legal burden shifts to the surface estate owner (the landowner) to take certain legal steps to succeed to the ownership of the then abandoned mineral interest.

South Dakota law concerning mineral interest abandonment law changed a few years ago. A clear requirement for an affirmative act by the mineral interest owner is now the law. The change was for the better. Now I confess, I am biased. I sat on the bar committee which recommended the change. And I supported the change. A bias is a fact, thing or deed done to one’s liking. The new law is simpler. In life, the simpler the better.

Both South Dakota and North Dakota have requirements for surface owners, (remember the surface owner is the actual landowner) who intends to succeed in the ownership of an abandoned or lapsed mineral interest. Both states require the surface owner (1) provide notice of the lapsed mineral interest by newspaper publication and (2) mail a copy of the notice to the owner or claimant of the mineral interest at the most recent “address of record.”

South Dakota’s statute explicitly identifies the mineral owner’s obligation to maintain a current address of record and the statute imposes the consequence for failing to do so, where North Dakota’s statute is silent on this, although case law reaches the same conclusions regarding the mineral owner’s obligations.

Fear not, the new addition to the existing mineral interests’ law is not complicated or insurmountable. And there is little need for court interpretation. The new South Dakota language states, “It is the record mineral owner's obligation to maintain an address of record in the office of the register of deeds in the county in which their mineral interest is located. Failure to maintain an address of record is a waiver by the record mineral owner of the requirement to mail a copy of the notice of lapse to the record mineral owner.”

Do not, my friends, walk through the valley of the shadow of laziness. The new law imposes only a modest form of vigilance.

David Ganje is an attorney who practices natural resources, environmental and commercial law.