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Problems With Mineral Rights Leasing

April 12, 2019   Auto Loans

As many people dealing with mineral rights probably knows, mineral rights leasing comes with problems and setbacks. These problems are not easily resolved either, and takes time to overcome. Nevertheless, they can still be solved and taken cared of.

One problem that both parties would have to gloss over mineral rights transactions are the legal procedures. This would include the mineral rights lease and terms of agreement. The wording of the lease agreement has to be very clear to both parties to avoid future disagreements. Problems and disagreements especially arise when the moment comes for mineral extraction. Mineral extraction has such heavy requirements like the expansive use of the land and surface, not too mention the amount of damage it can cause for the surface owner.

This is one of the main reasons why seeking legal help is needed when negotiating with a mineral rights lease. It is also advisable for both parties to have sufficient knowledge on the subject. Respect for the terms in the lease is also needed from both parties. The lease agreement should contain specific details if needed to ensure that there will be less, if not none, disputes in the future.

Legal issues aside, other problems can arise from mineral rights transactions. Damages to the land and property are the main concerns when mineral extraction is underway. It is not only during the extraction, too. Damages to the surface can appear years after the mining and extraction is complete. This would certainly be a headache for owners of fee simple estates. The effects and damages of mineral extraction can ruin the property and will become a problem for the subsequent owners of the area. Take note that the effects can appear many years later, and by this time the mining company may already be gone. No one would then be held responsible and any repairs to the damages would be a burden for the remaining owner of the property.

Aquifers and water supply can also come under fire with mineral extraction and mining. Places where underground extraction takes place are outside of the service of public water supplies. The people would have to content themselves with water wells for water. If the extraction is below the aquifer units tapped by the well, most probably the aquifer would be damaged by the extraction and the water water would drain into deeper rock units. This would lead to a temporary or permanent loss of water supply.

What is important in mineral rights leasing is that all the parties involved should understand wholly what they’re getting into. Mineral rights extraction can cause the surface owner many disadvantages, not only in the present time but also in the future. Legal representatives or lawyers should take care to research carefully and make sure their clients understand the agreement and terms.

When in the midst of negotiations, the leasing terms and agreement is what is to be focused on. Again, both parties should have legal help and should also have full knowledge of the terms. Understanding the risks and the many possibilities in the future is also part of the process. Business such as this naturally have its big problems, and while still early the parties involved should make adjustments.

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Bridging Loans

January 27, 2019   Auto Loans

If you have ever been stuck in between the purchase of your new home and the sale of your old home, understanding bridging loans would have been helpful. Nothing is worse than paying two mortgages when it is unexpected. Thankfully, bridge loans have been created by lenders to help address this challenging situation.
Bridging loans are temporary term loans that help to bridge this gap between the closing of the present home and the closing of the new home. Despite this not being a common scenario, under a few occasions there is a longer time frame than was initially anticipated. The bridge loan helps the property owner to cover their simultaneous mortgage costs, with the proceeds from the bridge loan being also used towards the down payment on the new property once closing occurs.

The Bridge Loan Process

As with any home mortgage, the buyers must go through underwriting to become approved for a bridge loan. Every lender will often have their own approval procedure that must be followed in order for the owner to be approved for the bridge loan. And, these qualifications are often more lenient than traditional home lenders when it comes to debt to income ratios, meaning that these ratios can often be higher than with traditional lending.

The rationale of different requirements associated with the bridging loans is that they are temporary and generally created to assist a property owner in moving from their current property into their new property. And, the proceeds from the bridge loan are almost always applied to the new home loan in the event that they are not used during the transition period before to closing on the new home.

Benefits of Bridge Loans

There are a number of benefits to the property buyer of bridge loans, including:
• It allows the property owner to put their property onto the market quickly and often with less restrictions than if they didn’t have the additional financial cushion.
• A lot of bridge loans don’t require monthly loan or mortgage payments, providing some financial relief to the current property owner.
• The loan can give the property owner some flexibility with contingencies on their home sale, allowing them to turn away offers that are not favourable without financial fear of paying two mortgages in the event that their new property closes as anticipated.

Disadvantages of Bridge Loans

While there are multiple advantages to using a bridge loan when selling or buying properties, including:
• The costs associated with bridge loans are typically more than traditional home loans and even home equity loans.
• Some property owners may not qualify for a bridge loan due to the lending qualifications
• Even though the bridge loan helps the property owner in covering mortgage costs during the transition process between properties, they must still pay for both loans and the interest that is accruing on the bridge loan.

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