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When buying real property, the need to check for severed estates might not be the first thing that comes to mind. But in most states, the surface estate can be legally severed from the subterranean estates, creating separate sets of rights for the owners of each. In Texas, the most common example is when the mineral estate is severed from the surface estate.
Under Texas law, this arrangement creates a separate free estate with rights to use the surface for the purposes of exploring and extracting minerals. In the past decade, Texans have most commonly encountered this situation when oil and gas companies enter land to apply technology including hydraulic fracturing to extract oil from below. Some Texans do not even realize these rights exist until they are contacted by an energy industry company that owns the mineral estate beneath their land.
The mineral estate is the dominant estate according to Texas property law, and the surface estate becomes servient to the needs of the dominant estate. However, this does not give the owner of the mineral estate an absolute and unchecked right to use the surface of the land in any way and to any extent desired. Under the accommodation doctrine, the owner of a mineral estate may only use as much of the surface estate as reasonably necessary to extract and produce minerals. This right is necessary to prevent the mineral estate ownership from being essentially worthless. The primary limit on the right, according to the Texas Supreme Court, is that a mineral owner’s exercise of its right to use the surface estate shall not unreasonably impair the surface owner’s right to use the surface if a reasonable alternative surface use is available to the owner of the mineral estate.
A case currently before the Texas Supreme Court—Coyote Lake Ranch, LLC v. The City of Lubbock—is testing whether the mineral estate rights, including the accommodation doctrine, apply to subsurface water. The City of Lubbock owns the mineral rights beneath a ranch in far west Texas. Recently, the City publicized plans to install approximately 80 wells on the surface of the land to extract water from below. The owner of the ranch argued that such a development would erode the surface and negatively impact the ecosystem of the ranch.
Both parties agree that the City has a contractual right to develop wells to extract the groundwater. However, the ranch’s owner insists that the City is bound to abide the duty to reasonably accommodate existing surface uses where possible. This case has important implications for owners of real property in Texas, and may have significant consequences to land usage and development matters when water levels are low and municipal governments begin to aggressively pursue additional sources of water. The Supreme Court’s eventual ruling has the potential to alter the landscape in Texas for years to come.