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Did I Get the Coal When I Bought That Property?

It is not at all uncommon for a landowner to reserve mineral interests on the sale of a farm or other real estate. The language reserving “oil, gas and other minerals” often appears as a reservation in such a deed.  An issue sometimes arises, though, about what are the “other minerals” that have been reserved. Is coal included in the reservation of “oil, gas and other minerals.”

The answer (and I know clients hate it when lawyers say this) is that “it depends.” 

Cases have held that the phrase “oil, gas and other minerals” is ambiguous as to whether or not coal is included. Therefore, the court would have to determine whether the parties intended that coal be included.  If the property is located in an area where there is little or no coal activity, then it may well be that the parties never thought about it and were really just interested in oil and gas. On the other hand, if there is substantial coal activity in the area or if a coal leasing professional talked to the grantor shortly before he signed the deed, then it is at least possible that the former owner did in fact intend to retain the coal.

It is quite likely, though, that the issue has only come up after the fact because coal has come into play and become more valuable in the area of the property. At that point, a lot of money can be involved, and this is likely to end in litigation seeking to determine what the parties meant by “oil, gas and other minerals.”

The solution to the problem, as is so often the case, is not to allow it to arise in the first place. Careful drafting in which the minerals to be reserved are spelled out in more detail (“coal, shale, oil, gas”) will save a lot of headache down the road.

Once the problem arises, though, often under a deed written by others long ago,  and it is the successors in interest to the original buyer and seller who are at odds with each other, the answer to the question of whether the original grantor reserved coal will turn on what the parties intended at the time of the deed.

If the parties never really thought about it at the time the deed was made, or if all of the parties to the deed are now deceased, it can be very difficult to project the answer to the question “Did I get the coal when I bought that property?”