Beginner's Guide: What are Property Rights?

Property rights are a set of legal rights which allow a property owner to buy, sell, use, and develop a property. But property rights don't mean you can do whatever you want.

Land use may be limited by local, state, or federal regulations, liens, easements, or existing claims. Properties can also have rights to valuable resources such as timber, minerals, or access to water that are not always included in the title or deed.

Knowing how property rights impact land use is an essential part of buying and managing land. This guide will go over the basics, but you should always consult with the appropriate land professionals if you have questions about a specific property.

Contents

What Are Property Rights?

Property Rights and Natural Resources

Easements, Access, and Land Use

What Are Property Rights?

At their most basic, property rights are legal protections enjoyed by property owners and obtained via the purchase of the property. They allow the owner of a property to exploit, modify, sell, or otherwise make use of their property with a few limitations. 

When you purchase property, you gain a bundle of rights. These five rights typically serve as the basis for what you can do with that property:

• Right of control: States that the owner has the right to use the property, and control how that property is used by others. Zoning laws, easements, and other regulations can limit how you use your land, such as limiting your ability to keep livestock on the premises.
• Right of enjoyment: The right to use the property for your own leisure, so long as it's lawful. For example, playing loud music in an area with a noise ordinance would violate this right.
• Right of disposition: Your ability to sell or transfer the property, such as by sale or will.
• Right of exclusion: Your legal right to restrict access to your property. This right can be bypassed in certain circumstances, especially if there are easements on the property.
• Right of possession: This right simply states you are the lawful owner of the property.

Most of the time, you only receive the full benefits of your bundle of rights when your property is unencumbered. For example, an active lien against the property can prevent you from selling the property.

Property Rights and Natural Resources

There are special rights which affect landowners in particular. These rights govern how you can interact with the natural resources on and around your land.

It's important to know rights to natural resources may be held separately from the property title or deed, allowing third parties to retain or acquire these rights independently of the land’s surface ownership.

Surface Rights

The most obvious rights associated with land ownership are surface rights. Anything built or found on the surface of the land you own falls into this category, including buildings, crops, and the physical space itself. 

Depending on where you are, surface rights might include provisions for digging to a certain depth for the purposes of installing septic tanks or wells. This is dependent on local regulations and permits.

These rights don’t, however, automatically include the rights to the natural resources beneath your feet.

Mineral Rights

Not all land is sold with access to mineral rights. When it is, those rights and the surface rights are usually tied together as something called a unified estate. With a unified estate, you own and may use the underground resources on your land as you see fit.

Landowners often sell these resources to a third party — such as an oil or gas extraction company — for either a lump sum or recurring royalty payments. 

Mineral rights cover the full range of underground resources, barring a few exceptions. These include:

• Common metals, such as aluminum, zinc, and copper
• Precious metals, such as gold or silver
• Fossil fuels, such as coal, oil, and natural gas
• Other rare elements and gems

Timber Rights

Your right to harvest whole trees from your land is dependent on whether you control the timber rights. These rights are not always sold as part of the surface rights and can be held by individuals other than the property owner.

If you own the timber rights to your property, you may still face restrictions due to local forestry laws or conservation easements. Some timber rights only allow you to harvest specific types of trees, trees of a specific size and maturity, or within a certain timeframe. Other timber rights are sold in perpetuity.

Water Rights

Like mineral rights, water rights encompass the full range of how you can use water on and around your land. If your property comes with water rights, then you have the legal right to access and use bodies of water touching your land.

However, state laws and type of water (e.g. groundwater vs. surface water) often put further restrictions on this use. For example, California’s SGMA law, which manages groundwater, has a significant impact on land use.

It’s important to verify water rights via a title search. Water rights vary significantly between regions, and not all states recognize water rights as inherently being tied to the land. 

Riparian Rights

Riparian water rights are the rights of a landowner to make use of a flowing body of water in contact with their property, such as a river and stream, so long as doing so doesn’t negatively impact their up- or downstream neighbors. 

Under these rights, landowners can use riparian water systems for drinking, watering crops and livestock, bathing, and other domestic purposes. Some states put restrictions on such activities, such as prohibiting the large-scale removal or redirection of the water. 

If you have a body of water adjacent to your property, you’ll want a good understanding of state and local regulations that could impact your use of that water and whether you need a permit. Riparian and littoral rights are often limited by public trust doctrines, which allow the government to regulate certain uses of public waterways even when they run adjacent to private property.

Littoral Rights

Landowners whose property borders a large, non-flowing body of water — such as lake, sea, or ocean — may enjoy littoral water rights. This usually includes recreational activities, like boating and swimming, or the right to enjoy an unobstructed view of the water. Like most property-related rights, state and local laws vary.

If you have littoral rights on your property, you are considered to own the land to the water’s edge at a point called the median high-water mark. This mark is the average height of that body of water. Beyond that, the body of water is typically owned by the government.

Easements, Access, and Land Use

Easements are legal rights held by another party which can affect who can access your property and how you are able to use your property. Negative easements prohibit you from undertaking specific activities on your property, while affirmative easements give the holder of the easement the right to do certain things on your property.

For example, an electric company might hold an affirmative easement to install power lines on your property, while an HOA might hold a negative easement prohibiting you from constructing structures over a certain height.

For a detailed overview of easements, check out our quick guide here.

Final Thoughts

Property rights are ultimately going to define how you use your land and can also impact land values. If you're buying land, working with a real estate attorney or land professional to understand rights tied to a property will help you make informed purchasing decisions.

It's also important to understand any local or state laws that may impact how you use resources on your land, such as groundwater.

Whether you’re looking to invest in mineral-rich land, build a homestead, or expand into large-scale agriculture, understanding these rights allows you to enjoy your land to the fullest and make smart investments.