Fractional Interest
Ownership of a share of an interest in land or minerals rather than the whole of it, such as an undivided one-half of the minerals or a one-quarter interest in a mining claim.
Detailed Definition
A fractional interest is ownership of a share of an interest rather than the whole of it: an undivided one-half of the minerals under a tract, for example, or a one-quarter interest in a mining claim. The BLM Glossary of Surveying and Mapping Terms defines interest in land broadly, as "any direct or indirect ownership in whole or in part of the lands and resources of the lands." Fractional interests are the "in part."
How fractions arise
- Conveyance of part. An owner deeds or reserves a share of what the owner holds.
- Inheritance. An interest passing to several heirs is divided among them.
- Grants to more than one person. In Nevada, NRS 111.060 provides that "Every interest in real property granted or devised to two or more persons, other than executors and trustees, as such, shall be a tenancy in common, unless expressly declared in the grant or devise to be a joint tenancy." Other states have their own rules on how co-ownership is created and what happens when a co-owner dies.
Fractional interests in mining claims
BLM's mining claims brochure says that "Legal interest in a properly recorded mining claim or site may be conveyed in its entirety or in part." Co-owners of an unpatented mining claim also carry a federal rule of their own. Under 30 U.S.C. 28, if one of several co-owners fails to contribute a share of the required annual expenditures, the others may give the delinquent co-owner written notice or notice by publication "for at least once a week for ninety days," and if the delinquent still "should fail or refuse to contribute his proportion of the expenditure required by this section, his interest in the claim shall become the property of his co-owners who have made the required expenditures."
How fractions compound
Fractions multiply down the chain. If an owner of one-half of the minerals conveys one-half of that interest, the grantee holds one-quarter of the whole. If the deed instead says "one-half of the minerals," the wording has to be read against what the grantor actually held. Each link has to be read on its own words.
Fractional ownership is not the same as a royalty or a lease share
A fractional mineral interest is a share of ownership. A royalty, working interest, or net revenue interest is a share of production or of costs under a lease (see Royalty Interest and Net Revenue Interest). The two are tracked separately.
Why it matters in mineral title research
- Every fraction has to be traced from the instrument that created it to its present holder, and the fractions for a tract should add up to the whole. When they do not, either a link is missing or a deed was read wrong.
- Heirs of long-dead owners often hold small fractions that were never probated or conveyed.
- For a mining claim, the county record and the BLM case file should show the same owners and shares (see Chain of Title and Transfer).
Related Terms
Mineral Title
Ownership of the minerals in a tract of land, which may be held together with the surface or severed from it and owned by someone else, including the United States.
Chain of Title
The series of conveyances affecting a tract, arranged in order from the government or other original source of title down to the present holder.
Royalty Interest
A share of production, or of its value, paid to a lessor or other royalty owner without bearing the costs of drilling and producing.
Division Order
An instrument signed by an owner that states the owner's interest in production from a property and directs the payor to distribute the proceeds accordingly.
Runsheet
A landman's working list of the recorded instruments affecting a tract, prepared from courthouse and other title sources as the foundation for an abstract and a title opinion.