I have an opportunity to purchase a MHP that appears to be a good deal after due dilligence. However, the owner wants to keep her mineral rights in case there are any oil or natural gas reserves or the like. At this point there is no exploration, however within a couple of miles there have been some reserves found. WHAT should my concerns be regarding this issue?WILL it diminish the value of the park?
I’d appreciate any input.
I would tell her it’s all or nothing, but if the park is a great deal I would try to negotiate a 50/50 split on the rights.
Depending on where it is, those rights could be worth more than the park someday.
I would consult with the company that is doing the current drilling a few miles away,
There are so many ways to go, you could also give her rights for a set number of years, then they revert back to you, or vice versa.
I would say, I was willing to pay X for the property 100%, but without the rights I’ll take off 30% Sounds fair right! ( this might be very unfair to you if she happens to know there is a 70% chance that there is deposits under the property)
You could really have some fun with this negotiation
Any updated views here? Am dealing with a seller that is trying to retain all rights on deal. I think the 50/50 proposal is fair but not sure they’ll be willing to agree to that.
I say let them have the rights and get the park at a lower price.
I bought my park w/o the OG rights and don’t care. It’s no real disadvantage.
Use the situation to leverage a lower price.
A first right of refusal is a good idea.
I’m not a sophisticated purchaser nor have I had the opportunity to even perform a due diligence, but buying a park without the mineral rights would give me serious pause.
I would worry about my park value if something were found on the property. Is extraction of any resources going to affect your future tenants? If so how much? Would the tenants have any reasonable recourse in alternative housing (Other MH parks in the area/inexpensive housing, etc) or would they simply have to deal with it?
Industrial exploitation in such close proximity might affect the attractiveness of your park for future tenants.
Are you on city water? Is there a chance that mineral extraction could contaminate your water supply/wells?
Is exploitation of resources even compatible with MH park operations? Could they shut down your park or tie you up legally to exercise their mineral rights?
Like I say, I don’t know a lot about the subject and my questions might be alarmist or even absurd, but if there is even a chance that any of these things could happen I would have to walk away.
The chances that exploration would happen on your property are zero.
The well contamination could be a cause for concern.
Thanks very much. Can you explain why they are 0? Property is on city water thankfully.