Interview with Jed Scott – Colorado Mineral Rights Issues
In this episode I sit down with a local attorney and friend, Jed Scott. Jed is a partner at Bell, Gould, Linder and Scott, P.C. and is our “go to” guy when our clients need legal help. Over the years, the majority of the time when Jed is helping us with a real estate deal it is a mineral rights issue and we’re trying to understand what to expect when buying an acreage property that no longer has its mineral rights intact. So that’s the basis for this discussion along with a some tangents on the growth of Fort Collins, oil and gas development, air quality issues, glade reservoir/ NISP, instituting minimum flows on the Poudre through town, why our traffic isn’t as bad as people think, and why we don’t always drink beer made in Fort Collins.
The following is a transcript of the podcast…
Ryan: So, Jed Scott, “Tennessee Jed,” as we like to call him as well. I was thinking when I emailed you and I was like “Tennessee Jed!” How you doing? It’s been a long time, but a good time.
Jed: It’s good to hear from you Ryan and thanks for having me on. I think this is as I was telling you just a moment ago, I think this day and age with the scarcity of time, podcasts are a pretty useful tool and I’m glad that you figured it out. And for those of you who don’t know Ryan, he is a fishing Guru. So in addition to helping you with all your needs, finding a home or a, do you do commercial?
Ryan: Yeah, we do some [inaudible] commercial leasing, mostly who’ve done some sales, but mostly my clients are looking for office space and stuff like that.
Jed: So, but I think it’s fair to say in Ryan’s life, and I, I commend him of this, his priority really is fishing, just even over the real real estate issues
Ryan: It used to be that way. It’s just not, I wished my priority was, was more in line with fishing. But now it’s like work or family, you know, you have like a certain amount of time. That’s the other cool thing about this is like, it’s a good excuse to get together. You know, like you and I are old friends. We go way back and we don’t hang out enough. And so sometimes we gotta be like, let’s have some beers and do a podcast.
Jed: And for the record that we can feel like we’re being productive and working, you know, for the record I’m drinking it really fine beer that was provided courtesy of Ryan and his team, two hearted ale. It’s got a nice, what was that? It’s steelhead. Ah, I think it’s a Brook tree. I think that’s out of like Michigan or something that is a Brook trout.
Ryan: Look at it. It’s kind of, I don’t know. We’re not, we’re drinking a California beer and a Michigan beer. It’s kind of bad form is bad foreign, some tall one’s boss. But you know, sometimes you like, you get used to all this stuff we have. And you’ve got to branch out a little bit. There you go. Well, Hey, good call. I’ve had it before. Love it. Yeah, it’s good. So you and I were catching up a little bit and we were talking about life and, and kind of the issues that you come across from time to time as a realtor and you’re wondering maybe if this is a good forum to explore some of those. And obviously anything I say can and will be used against me. I’m aware of this, so I want to be cautious and I always hesitate cause I know you can’t talk about cases so, but I always want like anecdotes from you, like tell the stories.
Jed: Don’t we store the war stories when they’re, when the cases are completely over. Can you talk about them? Yeah, the answer is it depends. I mean often you can, I think what a lot a lot of lawyers will do is I’ll just talk about it and they’ll just leave names out of the conversation. Say, I remember the time when but yeah, I, I think I’m not dealing with criminal defense of work where identities are critical and you’re dealing with super sensitive material. There are times where it happens and I have to always be conscious of whatever my clients don’t want me to disclose that. I’m not, that I’m ethically prohibited from disclosing. I’ve gotta be mindful of that. But I’d say as a general rule, dealing with real property matters, environmental matters some of the stuff we’re going to talk about today I think by and large can talk about it. Okay. so yeah. Well, cool. Well,
Ryan: I mean, you know, I think the last time we worked together we had a, my client was buying a 40 acre parcel outside of Denver and the seller was reserving the mineral rights and you know, that always kind of raises eyebrows even though I think the majority of the time people purchase property, they do not own the mineral rights. So there’s a couple of different, you know, ways we can go with that I think. But maybe
Ryan: To start off with, one of my questions is, you know, when we, when we’re purchasing a piece of property, we get a title commitment, we do a title search, the title company says, here’s all the matters of public record that we have tied to this property. And sometimes we see that mineral rights are, you know, have been reserved. Sometimes it’s like eight, Oh, there’s a lot of stuff that happened in like 1890. That’s usually like the earliest, you know, date we see on those recorded documents. And then of course there’s a lot of oil and gas activity now. And so some of those leases can be, you know, much newer than that. Regardless, you know, if we look in there and see that mineral rights are, have been stripped of the surface estate, I guess is the terminology, then we have to, you know, one of the reasons I came to you is because I needed to be able to tell these folks that they weren’t going to have a drill site set up on this property. You know, unbeknownst [inaudible]
Ryan: And so that’s why I came to you and I said, what can we do? But one of the things, so in that, in that case you wrote some language and we put it into the deed that the, the seller, the grantor of the deed was specifically, you know, not allowed to access the surface of the property without the consent of the buyer for any reason whatsoever written consent. And that was great. But then I got to thinking what happens most of the time or not we’re buying a piece of property, the mineral rights have been removed. So we’re, we don’t have the minerals, but the person that’s selling us the property doesn’t have a mother. So how do we prohibit or can we prohibit surface access
Ryan: In those cases where we don’t even know the person that owns a mineral or, or being, I guess we do. Maybe. Anyway I’m kind of rambling on and I’ll let you, well, there, there are a lot of questions in that I think.
Jed: Let me kind of break it out. Sorry. No, that’s okay. So I think the starting point of this is that you know, this concept in real property law is the, you hear it a lot among real property lawyers, the bundle of sticks and there are a number of interests in the ownership rights a property owner has in their property. We use terms like fee owners, so fee owners and absolute owner fee, simple owners and absolute owner in the real property. And among those rights is a right to the mineral estate that’s underground underneath the surface. And what you find over time is that a body of law has developed because the mineral estate can be severed from the surface.
Jed: It doesn’t have to be, but it can be. And it often is here in Colorado where minerals, I mean stretched back to really the formation of this great state. It was one of the reasons Colorado is what it is. Miners came here seeking to earn their fortune to strike it rich. Yeah. And so it’s pretty cool from a historical standpoint to look into how that all came to be, but in, in to pass. But really what’s into what potential property owners and property owners are, are, are having to be mindful of is, well, what’s the state of affairs for the mineral estate for any given tract of property? And I think good advice is never assume anything. There’s a presumption, there’s a presumption that the mineral estate is intact and it runs with the surface. Excuse me, it’s your beer. But, but you can’t, you can’t take that assumption on and responsibly.
Jed: I think you have to conduct you know, in cases where there’s really any question and it’s a critical issue. The simple, although not inexpensive, but the simple solution is to get a mineral title opinion run. Okay. And what that is, is you basically trace title back to patent and you look for any breaks in the chain of title for the minerals. And it’s typically either a reservation by a grantor or a conveyance by a grantor. So you’re looking for that language. And admittedly, it can be difficult. You’re looking through a lot of arcane documents. And there are people far better than me that do that type of work day in, day out. So we, whenever there’s a real question as far as where the break in the chain went or, or came about we like to look back and refer to a mineral title opinion to find that.
Jed: Okay. And there are ways to correct the break. Every case is different and that’s where I get to earn my money. Right. So I think that answers that question as far as how the, the mineral estate can be handled. And you, we can’t assume that it’s always intact. But she also had another question in there and that was, I’m trying to remember, there was a third point you were making, well let me stop. Let me ask you about the mineral title search. Cause how is it different than a traditional title search? Is it different? It is. I, so when you have a, when you have a title opinion run, you’re typically looking through the County records, right? And maybe some court documents to when you run a mineral title opinion, you’ve got to run through the County records, all those other ones that you normally would with a title opinion. But then you also need to look at various other places like I believe the BLN and the us forest service have their own body of records. So there are some separate sources that may contain information about any given parcel that you need to be mindful of and consoled. Okay. That’s what that title opinion will do.
Ryan: Interesting. So do you, I mean the majority of the property that we deal with, you know, our smaller parcels, we’re not doing a lot of ranch stuff. I mean we, you know, we do some 40 acre stuff where feasibly like setbacks, I think that the setback is 200 feet. Is that correct? I mean, I’m sure it changes with different different scenarios. But what I’m trying to say is most of the property that people buy, it’s not feasible to put a drilling rig on that, on that property. But once you start to get into, you know, the 40 acre space, there might feasibly be enough, you know, setback where an oil company could set up a rig. And the question is, do you ever have people come to you say, Oh my gosh, we bought this property and we didn’t pay a lot of attention about the mineral rights. You know, we know that not a lot of people own their mineral rights, but all of a sudden this person is tr, you know, this company is trying to set up a, a drilling operation against our will. Does that happen?
Jed: It happens. Yeah. Now it’s one of the incidents of ownership of the mineral estate. So either the the holder of the mineral interest, the owner or a lessee in the, of a, a lease to an oil and gas company, for example, as an incident of ownership. They have a right to access the surface to explore and acquire and develop the mineral interest even if they don’t own the surface estate. Correct? Yeah, correct. Yeah. Even if it’s been severed. And so there’s a, there’s a common law concept called accommodation though, that they have to be mindful of. And that’s gotta be, that means that they have to accommodate, reasonably accommodate the surface and not unduly impact or unnecessarily harm the surface. And they may be liable for damages caused to the surface. And so what you often see, I think practically on the ground, good oil and gas companies, and there are many of them.
Jed: I don’t, I’m not saying I aligned necessarily with development of the resource or not, but there are certainly very good operators out there and they know this. And rather than create a fractious with the surface owner, they’ll approach them with what’s known as a surface use agreement and they’ll offer terms and they’ll try to enter into a written agreement that sets the parameters for operations on the surface. Okay. So we, yeah, we see those and we are wholeheartedly in support of those because it allows, it allows development of the resource, but it also protects the interests of the surface. And it allows the parties to quote today, nice quote.
Ryan: Right? So they’re gonna pay, you know, and then it only makes sense, like oil companies aren’t out there trying to make a bunch of enemies, you know, they already have a certain reputation. So I could imagine, and they can do directional stuff. Right. I think most of the time they can find a larger piece of property adjacent and
Jed: Absolutely. I can only drill. Yeah. They’ll, they’ll pool and they’ll get units that are that are designated by the oil and gas conservation commission, the Cogg cog CC. And really the, I think the idea is they want to minimize impacts. And so yeah, with the current technology available you have, rather than having multiple pads, you have one single pad. Yeah. And they’re able to really in an amazing way, access a lot of the, the mineral interests.
Ryan: Yeah. I always am amazed at, you know, there, I mean a lot of times they’re five miles underneath the surface of the ground, maybe more. I don’t really know. It’s, I guess they have so much like, you know, the technology allows them to know exactly where, you know, that drilling rig is. But it’s just like, you wonder if how they know like they’re getting oil from like this particular track of land. You know, I mean, I’ve seen in weld County people have, you know, oil, gas laces for like pretty small parcels, like one acre of land, you know, there’ll be getting like some royalties and it’s just interesting to know that it’s like, do they really know that they’re extracting gas from like that, that one acre of land.
Jed: Right. Fascinating. Well, and then in just kind of a signal to your listeners, I mean this is an evolving area of law in Colorado for years, the oil and gas conservation act really provided a lot of strength to the oil and gas industry to develop the mineral interest. And now with recent changes through various Senate bills it’s kind of called into question the strength of the oil and gas conservation commission. I think everyone who’s practicing that area are kind of taking, you know, seats in the stands to watch how this all plays out over time. But the co, you know, the concept of the health, safety and welfare of the community has been raised. And whether the current rules as they are adequately address those concerns is still a question to be considered. Yeah. And so the game’s changing I think for the, for the industry and, and, and, you know, there will always be efforts I think to continue to minimize the ability of the industry to tap that resource.
Jed: Particularly here along the front range where there are a lot of people now. Yeah. So I, I’m sitting back casually watching you, curious to see what the outcome’s going to be. In the meantime, any, the good news for me is there’s always work. It’s a lot of work for you. Yeah. It’s amazing to just drive East and there’s just so many gas or eggs that he can’t even believe it. And it seems like it’s all been, I don’t know, you’ve been here a lot. You’ve been here almost 20 years, haven’t you? Yeah, I moved down from Laramie, Wyoming after graduating from law school. Been with the same firm ever since. And I I graduated in 2000 and then went back to law school cause I couldn’t get enough and completed a master’s in environmental and natural resource law back in 2013 and have really kind of been trying to push my practice a hundred percent in that direction in oil and gas of course is a big part of it.
Ryan: Yeah. Here. Yeah. But as you know, their cycles and everything and so, you know, for a long time we were seeing a lot of work there and for me that hasn’t been quite as active as the water rights Huria has been recently in particular fighting over with ditch companies and you know, who, who have many fine people I might add behind them, but sometimes they’re just flat out wrong on things and we just have to hold the, hold them accountable. But anyway, yeah, I saw in the newspaper that a share of big Thompson water doubled in value. And I think it was either two or three years. Yeah. I think I was at what I hear Northern or CBT waters. It was $50,000 a share right now. Yeah. Which I don’t know. I, I was told maybe 10 years back, he was 18.
Jed: Yeah. You know, so and again that may cycle right through, but it’d be interesting to see a graph of that. I mean the, I don’t know if there, if there are any, but yeah. It just can’t imagine the, the price of water fall. It just didn’t seem like, it seems like it’s so hard to find. Yup. People, it’s not like there aren’t a bunch of shares, it’s just there’s not a lot of people that want to sell them. Cause if you don’t really, really need that money, you might as well, you know, you could wait two years of baby double your money. You know? And I think a lot of people who are taking the attitude of we can just rent water. This is, wait this out. I mean we have, you know, immediate needs and we can meet those through rental water.
Ryan: And it’s a whole lot cheaper. But you know I think you don’t have the certainty you have by ownership of a share. Right. And for the municipalities, we do a lot of work for, they want certainty. Yeah. So and, and you know, with the growth here, our clients are having to really think forward and be mindful of that. I mean, they would be, you’re responsible if they weren’t. So, you know, they have to make decisions internally of whether it’s worth it to fork out that kind of money. And it’s significant. Yeah. We talked a lot about that with, you know, so many of my clients are wondering like, how, how much longer can this real estate market keep the pace that it has? And, you know, we tend to think that we’re kind of in for sort of a, a moderation of appreciation.
Jed: And that’s certainly kind of happening a little bit, but at the same time, you know, it’s still like four or 5% appreciation is not, you know, 15% like we saw in a few years ago. But it’s still pretty robust for a real estate market. 5% is pretty dang good. Yeah. I was going to ask you, maybe I should ask you the questions. I mean, yeah, for those of us on the ground I mean, are you right now? Is, is this a good time to end to, if you have investment money to use are you encouraging your clients to put it into investment properties or are you saying maybe you should, you should back off a little bit and wait. Yeah, I just, I’m just don’t think you can time the market, you know. I, people
Ryan: Have been thinking that we’re in a bubble for a long time and you know, I was telling people I thought the market was going to start moderating and flat to plan on moderating appreciation. Potentially some price drops about 25% ago. So it’s like, I think the big thing for me is looking like that Mon Tava development. Like he look around Fort Collins. It’s not like we have a shortage of land, right? I mean there’s corn fields as far as the, I can see, you don’t have to drive far. It’s really about the water, you know, and by the time those developers go to Elko and you know, say we need 500 water taps for that development, that’s going to go right around Budweiser there and all those corn fields. You know, they don’t, they can’t just sell those water taps like they would to an India.
Ryan: If you’re an individual, you can go to Elko and buy a single water tap. But if you’re a developer and you want a big chunk of water, you, you cannot do it unless you bring them water rights or pay cash in lieu. Which is, you know, the amount of money that they’re having to spend on water, they can’t really make that project work. And I don’t, I’m not sure there’s potentially some point where if it’s enough water taps, maybe they won’t take cash in later. They actually have to have the water brought to them. So it’s things like that. And then, you know, we have an office, like a retail office. And one of the cool things about having this office is getting to talk to all the people that come by and look at the window and, and they say, we’re from New Jersey and we’re retiring and our kids moved here.
Ryan: I can’t tell you how many people follow their kids out here. Huh? Because wish my parents would. Yeah. Well I mean ask them what property tax they pay. You know, if you’re on, you start to be on like fixed income, retirement income and you know, our property taxes are point about 0.65, the national average is over 1% and then you have a bunch of places where it’s like six. So we’re like one 10th, one 12th of like the property tax it, a lot of people are paying and you know, like I said, they start retiring and they look at where their money’s going. And even though Fort Collins is not cheap and people rightly so are complaining about the prices, the cost of living, even, you know, places like I have a lot of people come from Minnesota and Illinois. I mean, Chicago is like, for a long time it was California and we always had people coming from California, but now it’s, it’s Illinois, huh?
Ryan: And Minnesota and, and those folks are coming to save on those property taxes. And then people will say, well, where did the jobs come from? And I’m like, well, they’re still working out of Chicago. They just, you know, you get to a point where you’re sort of indispensable and you say, Hey, boss, like you mind if I, you know, I work remotely and can I show up a couple of days a week or just work out of my house? They might already have, you know, we’re work from home type of an agreement with their employer. And they say, well, would it really be any different if I moved out of state? And a lot of times the answer is go for it when they want to keep them happy. I’m not to say that there aren’t a lot of good jobs here, but I think for a long time that has been the the push back.
Ryan: People will say, where are the jobs coming from? Why is Fort Collins getting so expensive? Who are major employers? And there’s just so many people that have made money elsewhere or are making money elsewhere and are relocating here and retiring here. So obviously I don’t have a crystal ball, but I, I’m bullish on the market still, you know, I think longterm, you know, you look at Boulder, obviously we’re not, we don’t have the, we’re not the employment center that Boulder is, but the desirability of this area I think is similar to Boulder and we’re less than half of the median price at Boulder.
Jed: Yeah. And the other factors, I mean, we’re very similar to Boulder. I, I hate to make that comparison because I like four cones a million times better than Boulder. But you know, we have a major university here, a fine school. Even though I’m a, I’m a university of Wyoming graduate and we’re mortal enemies. I can say that with respect. And so we’re, we’re similar in that vein. And you’re right, we’re not at that same price level though. We have everything that Boulder does in so many ways. We’re not right on the flat arms, but you and I both know there’s so much to do here. It’s a wonderful town to be in and the word is out. So I guess I can just go ahead and say it. I mean, it’s a wonderful place to raise a family. My wife and I, and we have two little boys who are in fine schools here.
Jed: And we made a decision that maybe, you know, the wage gap is there. I think you, you would agree with that. The, the job situation isn’t maybe what we want in terms of the pay scale. Yeah. Versus cost of living. And by that I mean the cost of housing, you know, and that’s what you deal with day in, day out. So we, we have to kind of contend we’ve, we’ve wrestled through that, but our decision is that the good outweighs the bad here. And the only thing I ask is that good people move in. You know, I, I know there are a lot of other reasons people want to move to Colorado. You and I can chuckle about it and everyone locally is just kind of batting our eyes, looking at the the new green revolution that has occurred and kind of taken over a,
Jed: And our firm represents a number of those companies and they’re, they’re excellent clients and very professional. But CA Fort Collins is so much more than that, I think is what I would say. It’s, it’s just got a great character about it. Great vibe guys. I could have met a guy like you with outlet in here, you know, so there’s a lot of, there’s people always want to know what it’s like to live here. You know, and I, one of the stories that I tell is I came from Austin and Austin is an awesome city. But no trout, there’s no trout. Well there’s there’s some trout new know that gets new Braunfels or like an hour and a half South. There’s a tail actually a pretty good tail water. Okay, fair enough. But anyway, there’s something to be said for the type of place at Fort Collins is there’s not a lot of people that like transfer here for a job.
Jed: You talk to people and people have voluntarily moved here and all the people that walk by your office every day you talked to them and they’re like, w we’re just here visiting to like see if we want to live here cause we read about it or you know, whatever the case is. And Austin had a little bit of a different feel because you had so much, like you said, so many people, obviously people moved to Austin to be there as well. But Austin, Houston, like there’s so many people that are there for work. You know, they’re there because of a career and there and for colleges. Isn’t that kind of a place. You don’t have a lot of people that get transferred here for jobs. Of course it happens, but the vast majority of people voluntarily moved here for the lifestyle. And then they kind of like wanting to figure out how to find a job after they got me here.
Ryan: And so I think that creates just, it’s a little bit of a different feel. I think, you know, when I, when I go to visit my in-laws and we land on the ground in Houston, one of the things I look around and I’m like, wow, the car, like there’s so many Mercedes and BMWs and just like this, like, Oh my gosh, it was a Ferrari. You know? And of course you see a few of those cars in Fort Collins, but it’s just different. It’s not a trucks. It’s not a flashy place. Not yet. It’s very, it’s very down to earth. You know, I think in some, some folks like people in Loveland think that Fort Collins is like, you know, the hipster capital of Northern Colorado, and I’m sure you know, it is. But compared to a lot of other places that I’ve been, you know, I still think it’s, it’s pretty laid back place on the whole, it’s pretty great. And I, and I think the city, you know, needs to be commended. They’ve, they’ve done the best they can in a lot of ways.
Jed: Although my one complaint is traffic around here, my gosh, I, I, in two years time, Ryan, what have we seen, you know, a major shift and, and yeah, it’s definitely crowds and all those things that they’re good at. There’s good and bad that comes with that. But I’ll take, I will take the good here any day, and we’re, we’re committed to being here. We’re invested in this community. We’ve got a, you know, like I said, a great school, great churches that faith is an important part of our lives and who we are as a family. And so you have that, you have that option. Yeah, I know that’s an important part of yours too. So, you know, I think we’ve got it all. And the question is, you know how do we handle this growth? Yeah. where do we go from here? And how do we all keep our sanity with the increasing population in this area? Other than local beer, which that helps. It helps.
Ryan: Well, you’re talking about traffic and I completely agree with you. The traffic has gotten a lot worse, but it’s still like, I just have to laugh because of the places that I’ve lived and grown up and especially Austin, you go back to Austin now, it doesn’t matter what time of day, there’s no, I mean there’s rush hour but it’s gridlock. Like it can be two o’clock in the afternoon. It’s gridlock. And so I think I sympathize. It’s gotten worse, but like it’s still, you know, we have, it’s a small enough town. Did you know there’s people in that worked for the city of Fort Collins that sit and watch our major intersections and have their hand on the button of the, of the streetlight. I did not know there there’s like a human being that is like monitoring traffic flow on some of our, not every intersection but the busy ones in the during rush hour. I thought that was crazy.
Jed: Interesting. I’ve never heard of that. Yeah, I’ll take your word for it. I think, you know, I think that’s right. Colorado in article, I believe. Would you be bored with that job, Jeep? I mean, I think I will and I hope that that person had on some other job.
Ryan: I hope they’re not listening to us right now talking about that, but my gosh, yeah, I’m sure there’s some satisfaction. You know, you’re like, you know, I don’t like that. I know that guy. I’m going to put the, I’m going to yell out like now it’s going to be a 10 minute, like, yeah, it’s going to be a long one. So everybody, yeah. What else, Jed, what else he thinks like interesting that comes across your desk that you think, you know, I mean, it could be oil and gas, it could be, I’m reading through some of the questions you had here. You know, questions you had regarding back to the mineral estate is restricting access to the surface. And I think your question was, is there an opportunity to ever restrict access to the surface?
Jed In the short answer, yes. I mean a party’s free to contract as they see fit. So if I’m granting the minerals to you in exchange for a purchase price and you say to me, look, as part of the deal jet, I don’t want you to access the surface, but I don’t have a problem with you developing the mineral interest. For example, through horizontal drilling. Could that be a consideration in negotiations between the buyer and seller? And the answer is yes. So you know, our, our mineral estate holders wild about that idea. I’m sure they’re not. I mean, they want to protect as much as they can, but if they are, are interested in selling their property things are negotiable and that is one of the many items that are negotiable. So you know, I think, I think the short answer is you as a realtor, as you’re guiding those buyers or sellers to that situation, being mindful of the right to do it but also kind of proceeding with caution on that. But there could be a covenant or restriction of sorts for access across the surface. And that may be an optimal time to, to do that.
Ryan: Well thanks for bringing us back to that cause we didn’t, that was an important thing that we didn’t really address was that if you are purchasing the property from a person that does not hold the minerals, can you restrict surface access? Like it doesn’t really matter what they say, right? Cause they don’t hold those minerals. Oh the person you need to know
Jed: Doshi with as the mineral interest owner. Okay. So if it’s separate, if that person or entity for that matter is separate than the seller, then I think you would be wise to contact them, track them down, contact them, visit with them and see, I think the reality is why would they want to agree to that restriction. Right. But in exchange for compensation they may be persuaded to do it and there may be a situation where it would be appropriate. Perhaps they don’t care. You know, you don’t know. I, I’m really hesitant saying that ever telling someone. There’s a one size fits all solution. Every case is unique and that’s why lawyers do the job they do. Because every case is unique. There are different factors, different people that you just have to look into and dig into. Yeah. When you make it, when you make in reaching a decision on something.
Jed: But I guess it seems like a lot of times, like you said at the beginning, people are, those oil and gas are happy to pay some sort of a lease for surface access. And so, you know, I’ve seen seen plenty of like small acreage and you know, East of I 25 where people seem happy to have that drilling rig on their property. Do you have like a, I mean I know you can’t be specific, but just some of the like the surface leases, like the, the amount of revenue that’s coming off of those, are we talking like, like let’s say you had a five acre piece of property and the oil company approached you and said, we want to set up a re looking at a couple thousand dollars a month. You know, it just, I unfortunately I don’t have a number that I could have fixed to per-acre. Right. I think the answer is it depends, you know it depends on obviously how desperate the company is to have that, to have access to this, how many other options are out there for the company.
Jed: How important that site is for whatever reason, geological et cetera. So you just kinda have to work with the individual case and, and through those issues. I wouldn’t expect though I wouldn’t tell a surface owner that they need to expect a huge windfall from this because really the right still rests in the mineral estate. And if you push it too hard, they can just go ahead and just plow forward and they, they’ll get to a point of frustration and say, you know what, we’d rather litigate this with the court and let a judge make a determination of what her rights are and whether this is appropriate then try to negotiate any further with you. So I don’t want to encourage litigation. I don’t mind litigation, but I don’t see it really being productive for people. Yeah. I think most, most situations with rational minds, we can find a solution and we just need to work through the issues.
Jed: What’s important here? What are the expectations? Are they realistic or not in finding a means to reach it. But I understand there are cases where you know, the oil and gas company thinks that they can just do whatever they want. They’re not impacting the surface enough. And the surface owner has a very, has a difference of opinion and you know, of course that’s what the courts are for to solve those problems. Sure. All right. Let’s talk about adverse possession. That’s a cool subject. One of my first case, I have to laugh. I had a very, I had an ugly case with adverse possession when I first started. It was a, have you done, have you done much work up in Estes park? No, I haven’t. So up there, up in Estes park, Rocky mountain national is obviously the neighbor to a Estes park.
Jed: And for the better part of a hundred years your families have had cabins up there and it’s really slick. It’s, you find out these families, multigenerational families who have, can had a cabinet. It’s passed generation to generation. And the, the really interesting part of that is nobody really, at least back in the day, really lived in Estes park. I mean, they were probably a very small core of group of people. But by and large, most of those vacation homes were just occupied for the summer months and then they were left, you know, boarded up. Yeah. And I had a case where a absolutely a phenomenal client, but that was the case in for him. And he had neighbors who likewise were three generation owners of their home and they fought over, if I remember the facts, right, four different spots along a shared property line. And we want to taking this to trial and losing on all four counts.
Jed: And I thought, I, you know, I look back and the judges and the parties and everyone will remain nameless. They, if they’re listening, they’ve know who they are. But I remember thinking, I thought the judge at the time was just so frustrated with everybody arguing over where stones were placed 25 years ago in where cars had backed over once in once, twice a summer. That he just said, I’m going to make a decision with one side completely and let them appeal me. And that’s what happened. Let’s talk about like what tell people what adverse possession is. Cause we just kind of threw the term out. I think a lot of people don’t understand what we’re talking about. So, so what Colorado and for that matter, I think most States have adopted as a common law concept. And I, it, there are the items we learn for the bar exam, but every state’s kinda different in how they approach common law. So I grabbed a case and I was like, I need to take a look at the elements again because there are a bunch of them. But and this is a case here, it’s the Beaver Creek ranch case. Beaver Creek
Jed: Branch L LPV Gortman leverage LLLP. It’s a Oh nine court of appeals case. I won’t give you the, well, I’ll give you the Pacific reporter site two 26 P third 1155. And what it defined adverse possession is is a party must establish that his possession is hostile, actual exclusive adverse under a claim of right in uninterrupted for a statutory period of time. And in Colorado, that statutory period is 18 years. So you’ve got to get all of those elements through. It’s a lot. It’s a mouthful. Yeah. If you do, if you are able to demonstrate now by a not, it’s not, it’s no longer a preponderance of the evidence. It’s a you know, gosh, clear and convincing standard you can basically take title from the original owner to yourself for that area of property. So
Ryan: Most of the time, I think this happens with fences, right? Nobody really knows where the property line is. Somebody builds a fence,
Jed: But you said it has to be hostile. So if you just build a fence and out of ignorance, put it in the wrong place. That doesn’t seem to be hostile. So this is really what we’re getting at is adverse possession is two people fighting over a piece of property. One person has a, you know, owns that property because of the legal description. But another person is saying, I have adverse possession of this piece of property because my fence has been in this place for 18 years. And
Jed: Anyway, well it’s, I’m just trying to get some context if people don’t understand where we’re going. Yeah, yeah. It’s funny. And in this case, some of the language that the court said on this issue of hostile, hostile intent is based on the intention of the adverse possessor to claim exclusive ownership of the property occupied. So it’s an intent based, there’s an intent based component to this. You’d need not make a showing of force or actual dispute in order to be successful. But it has to be hostile against the true owner and the world from its inception. Now here’s where it gets real interesting. So a common law, we had these elements in Colorado, followed them up till about 2008. The case I told you a minute ago was before 2008 but in 2008, our general assembly got in the mix and made some changes at the revised statutes.
Jed: 38 41 one Oh one, which among other things sets the 18 year component, establishes that, but it now requires among other things a good faith belief that the person in possession of the property was the actual owner and that the belief was reasonable under those particular circumstances. And I think what was going on at that time as people were getting tired of cases, like the one I was dealing with where, Hey, you know, you got into a dispute with your neighbor and you decided I’m going to throw out adverse possession. There’s gotta be, there’s what the general assembly says is we’re not going to be continuing to change ownership. I mean, after all, someone bought this property thinking they owned it only to learn later that there’s this adverse possession claim out there. And I think that there’s an argument to be made a good one that there’s some bad faith going on.
Jed: You know, people are contriving arguments, just a, just a win. And the assembly at least made the attempt to try to fix that by saying, look, there’s this added element or piece to all of this, this good faith belief you have to have it’s not good enough to say, well, I’ll put this fence over there. Well, I had a reasonable leave it because I’ve thought that the property line was properly there and the fence was, was within that you know within that area. So I wished the statute had been around in that one. I think it was a two year or deal. And then we had appeals that went on from that.
Ryan: And what is the purpose of the statute? Like why would the state ever give anybody the right to claim property in that and like an adverse way? I mean, she can’t, they just be like, this property is legally this person’s, I mean, I could understand if like you were letting it languish and somebody else was taking care of it. I mean, do you remember, do you know the origin of this?
Jed: Yeah, it’s common law. It’s been around a long time. I couldn’t tell you the precise origin of it. I would imagine England or even Roman law, but I thought the same way for a long time. Ryan. And then I got into this debate with a very good legal mind that, that’s a friend of mine and we were arguing this probably over beers one night. And he said, you know, what you have to remember is Colorado subscribe to this with the concept or the notion that we want to maximize utilization of a resource. And just because you buy it doesn’t mean you necessarily can just sit on your hands. You need to develop and use your property. And if you’re not being vigilant and doing that, then you run the risk of losing it. Now I see that argument cutting both ways. In a situation where you’re on a remote land and you’ve been using it in good faith, you know, farming at rate ranching at whatever and you’ve come to rely on that land and you only learn later that it was in fact, once it’s surveyed, for example, you’re outside, you’re the boundaries of your proper parcel.
Jed: You know, I think at that point it seemed to me that we’re rewarding people for using their property and using it well. And we want to as a society encourage that. The flip argument, which I think is becoming more to me in a lot of ways valid is while we’re live now live in a crowded state or in an area that’s growing, increasingly crowded and it’s a game of inches. And if I had don’t just precisely mow this area of land or pick up the trash here and I’ve seen claims like that, that I somehow forfeit, that doesn’t make much to me either. So, you know, you’ve got different scenarios and that you have to deal with. And I mean, I, I guess what I’ve warmed up to the idea is I get why a common law, adverse possession was there cause it wanted to reward people for maximizing utilization of a resource, their property. Okay. And it wanted to also, I don’t know if punish is the right word, but provide incentive for others to be vigilant in protecting their property and putting it to the same use. There was a, there was a real, a real, a genuine concern about using the resource in the land. And this was the law that came out of that.
Ryan: It’s fascinating. All right. If, I don’t know if you have to go Jed, we didn’t really talk about time, but…
Jed: No, we’re good, I got, I got more to ask you. Yeah, I can get [inaudible] hang out till I don’t know, six 30. My wife’s got the kid.
Ryan: Okay. You mentioned environmental law and you’re, you know, enjoy that work and, or want to take your practice in that kind of direction. And that just made me think about a conversation I had with a gal who works for NOAA and she’s really big into air quality. And I read a, well, she first told me, you know, we’re talking about global warming and well, you know, it’s always fun to like tread around that subject. Yeah, it’s, that’s you, I’ll get one too. And we started talking about the fact that Fort Collins like is failing air quality standards, EPA air quality standards. Are you aware of that?
Jed: Yes. so I, I would imagine what you’re referring to is under the clean air act on a, on a national level, every state or target area. And you’re hitting me in some areas, I’m kind of rusty, honest he has what’s known as a state implementation plan. There’s a concept of attainment versus non attainment of that state in implementation plan. And it doesn’t surprise me at all to see Northern Colorado as non attainment. And I think it’s a combination of things. But you know, the state has a role as delegated to it by the EPA do oversee and monitor that plan. And there are certain rewards and certain penalties. It’s probably the simplest way to put it if you are in attainment or non attainment. And I would imagine for those who are overseeing the program, it’s a bit of a challenge ou here. With all this growth. I mean, how do you manage all the cars that are coming in every day I would imagine. And so it’s really a, say it’s a state level program. It’s actually a federally promulgated program, but it’s a state overseeing program. And Fort Collins and others in Northern Colorado had been out of a Ethen and non attainment status for perhaps as long as there’s been a program. Huh.
Ryan: So why is that? I mean, it just seems like, especially if we’ve not, if we’ve been out of attainment for that long, this is a pretty sleepy little town. You know, 10 years ago we were probably just over, you know, we’re probably about 150,000 people doesn’t seem like, where are we at now, by the way? Do you know? You know, I, I don’t know. I should know. But I think we’re, I think we’re adding about 7,000 five to 7,000 people per year.
Jed: Okay. That’s not, so, it just seems a lot more crowded than that. Yeah. Well, I don’t know if I, I don’t know if I have the answer for you on that. What, what’s causing this? I just, I do know that based upon the front range, the geology and typography of the front range, prevailing winds, et cetera, et cetera, those all play a factor in this. I do know, I, I’m sure you see it as we drive, we have Arab monitoring stations all over. I would imagine they provide data to the state in assisted and making decisions of what to do. I couldn’t tell you honestly how CDPH E in the air quality monitoring program works. It functions to apply pressure to areas like Fort Collins in, in reaching attainment. But I’m sure it’s there. And it’s needed. You know, we want to promote clean air. I think everyone stands to gain by that. But it is a problem. I’ve heard about it. I did some work for a regional group for a while. I actually didn’t handle the environmental piece. It was more the business into things. They relied heavily on the state attorney General’s office with advisement on it. But I was always curious about the current state of affairs here. And it had had a pretty big role in deciding, deciding where you know, major corridors would lie how roads would be developed, expanded, widened, whatever. And I think to some degree it has an impact on federal funding for those roads. Huh. So all of it’s important. And it’s, it’s a big, big hot topic. No doubt. Yeah. The, you were mentioning like incentives and that’s what you were saying, like as far as federal funding, if we were to, if we were to somehow meet these EPA guidelines, at some point there could be additional, like federal funding that would come through.
Jed: Is that what GA? That’s my impression. Yeah. And I’m, and this is outside here. Yeah. And I, I mean it’s one of those areas that I would be comfortable getting educated on more, but I just don’t run in that circle right now and I’m a little rusty on it. But I think the short answer is yes. I mean it all doesn’t it always boil down to come down to dollars. Yeah. And I would imagine that that that has a hand here. So your desire to do more environmental law, what, tell me like, I like the idea of what your dream, you know, if you could pick, these are all the cases I’m going to work on. I love I think water quality would be cool. Section four, two, section four for clean water act type of work.
Jed: You know, this is something that’s probably near and dear to you if you’d like to fish. To me the idea, the concept of pollution and trying to stop it would be a dream come true to get to work on that type of work. I’ve not had an opportunity to do a lot of that. I mean here what we deal with mostly there’s two different concepts, water rights and water quality. Water rights seems to be the area that everyone wants to fight over. I mean, you know, you pointed out a while back the need to accommodate or meet the needs of all these people moving in and the need, one of the key or center pieces of that is water. So everyone’s fighting over what little water we have. And I don’t know folks from outside realize moving to the West here that that is a major area that you have to keep in mind.
Jed: Some areas you move to, it’s just not a problem because there’s just not enough people. But here on the front range where all the surface white rights had been appropriated long ago people were fighting for what’s there. What little is there and they’re paying paint a lot of money for it. I wouldn’t be at all surprised you know, visiting with a developer, if you looked at a spreadsheet of where all their costs or hard costs are, if water’s a big part of that, you know, you and I look at a structure and we think, well, gosh, you can’t possibly cost that much to build this. Yeah. Well did you consider the infrastructure that went into this? Yeah. And so those are the things that good or bad, you just have to be mindful of. Here’s, you move into the front range. Hmm. Yeah. I, so you’re talking about water rights and I’m always, I thought a lot about the pooter through town. And kind of the treatment that it gets and our bad. Yeah. And I understand people say it’s a working river and a, you know, I get that. But you have a lot of other places the Yampa, you know, through Steamboat is a very hardworking river as well. And a lot of other rivers where they Institute minimum stream flows and you know, we can have,
Jed: Which is saved as determined, has beneficial use of the water. By the way. So what do you mean? Well, minimum in flows is the concept of trying to keep a minimum amount of water in there really to protect aquatic flora and fauna. Yeah. The States recognized that that’s an important and beneficial use of that water. Okay. So that’s, that bodes well for, for, for both the, the wildlife that we love. One of the reasons we want to live here, but as well for as well as for people who use it recreationally.
Ryan: So what does that really, what does that do for us to say this is a beneficial use? Is that just so that people, if they leave the water in this, in the river, they’re not going to lose their rights because they’re putting it to beneficial use. Yeah, I think that’s right. And and if you don’t, for people that don’t really understand what maybe where we’re coming from here you can have all the water rights in the world, but if you’re not putting them to beneficial use, you have the potential to lose them.
Jed: Yeah. You’ll lose it. That’s one of the standards or requirements for a water right. You need to appropriate it and you need to divert it and you need to put it to beneficial use. And you know, there’s, there’s kind of developed body of law of what that means, but it’s kinda good for, for folks who are into recreation. And I think that’s a lot of people who move here to know that we as a state recognize that recreational use. And I would say I would stress more importantly the wildlife component protecting and preserving the wildlife component is in fact a beneficial use. I wholeheartedly applaud that. I think it’s good stuff. So the problem is everyone’s got their eye on that last little bit of water. Yeah. You know, and so it’s gonna be interesting to see where things go in the next few years in that vein is more and more people need it. And then there’s just added pressure to the, to the scarce resource we have.
Ryan: So what, what could we do to, I mean, what would it look like to, you know, if you and I and bunch of other fishermen or whoever, you know, interested parties in Fort Collins wanted to get a minimum stream flow instituted so that we don’t see, I mean there’s times, you know, in the late summer this year we actually, we have a ton of water and it’s great, but there’s times when the, the river will almost run dry and you’ll have a single like one cubic foot per second. You know, I think it was last year or two years ago, there was a big fish kill below prospect below where the river runs under prospect. And there was a bunch of people, you know, wondering why that occurred. And then I think the Dow didn’t sort of an investigation and I didn’t ever hear like what the result of the investigation was.
Jed: But one of the things that I was looking at is the the numbers, the gauge numbers that the Colorado one was using for like what they thought the flow was. It was a gauge, you know, that was well above where the the site was and there was diversions in between those. So I thought the gauge numbers they were citing were, were totally off. Oh. so there, and I just thought the, the flow, I mean they were thinking like, Oh, there was a, you know, people were throwing out suggestions. Like there was a oil truck that, you know, turned over in the Canyon like months before and people were throwing out a bunch of ideas. I’m like, we’re talking about late summer, super low flows, dissolved oxygen is like nonexistent. You know, this is probably what happened. And, and he didn’t really like here a lot of people talking about that, but,
Jed: Well, and you and I both know, for example, the stretches of river in town. I don’t know what they hold up the percentages of rainbows versus Browns, but Browns can handle the warmer weather or the warmer temps a lot, a whole lot better in rainbows. The bottom line is everyone’s stressed. Yeah. It’s like living in New York city, I suppose you’re stressed, right? Every, there’s always something. But the short answer is I actually don’t know if independent of the Colorado water conservation board, anyone can do anything to protect and try to encourage or promote additional contributions to minimum and stream flows. I think by and large that all has to be done through CWCB. And I’ll just tell you, I think that’s where you would want to look and see what your opportunities would be, visit with them and see what, how they would guide you in that because that’s a very able group of people.
Jed: And think it’s a noble task, you know, if that’s something that maybe Fort Collins wants to take on the tr, the trick of course is finding the water rights to buy the seat. The more senior, the better in order to meet that. I don’t know if those rights are even for sale or available. And I guess the idea just real bluntly, is you buy that right and you retire that right? Right. You, you just, you use it and apply it to minimum instream flows and you increase the water flow through town. That would be the goal. So if that ever, if that’s something you find some people who want to do. I, I think we have to do that. Well, I mean, happy to jump in and help [inaudible]
Ryan: Well, yeah, that’d be fun. It’d be fun to just at least start talking to people and try to tackle a project like that. Cause it’s something, I think a lot about it and I think the river has a lot of potential to be a great fishery. And it just, you know, it really just gets beat up. And you know, that’s one of the benefits I think of Glade. I mean, regardless of where you come down on Glade reservoir and yes, I, you know, I want all the water humanly possible to be in the river. And I don’t know exactly, you know, what it’s gonna do to the river to divert the amount of water that they’re going to divert during those flushing runoff flows. But one of the good things they’re going to do is, I think they said a 25 CFS minimum industry year-round in stream flow. If Glade reservoir gets built. And I think that will be an absolute game changer because you have the worst time. You know, we have a predominantly, predominantly Brown trout fishery in town and you have these instream flows that dropped to like one or two cubic feet per second in the summer was just a joke or in the late summer in the fall. And then the Brown start to spawn and they, you know, they make, make spawning beds in particular areas and then they get dried up. So I think, you know, if I re like I said, I think what you will about Glade, if they are able to do that 25 CFS minimum instream flow, that would be Spectacular I think.
Jed: Yeah. Well, and the good news about Glade, I’m going to be working on Glade with one of our clients is it is also meeting the needs of a lot of the people that are moving into this area now. Yeah, there are impacts. There’s no question about it, but do the impacts, do the benefits outweigh the impacts? I think a lot of good minds are behind that. Looking at it tackling the difficult questions. And I think your analysis is right. There’s also some benefit that the state is trying to secure through this project, the approval of this project to increase minimum instream flows. So I’m Excited to see what happens out of that. I think it’s common. I don’t think you can avoid it. Yeah. And so, so let’s make the best out of that situation, right? The, the, yeah. They own, they have the water rights. They have the land. I mean,
Ryan: That’s what I’ve been told about, you know, Obviously you like the Save the Poudre folks, you know, we appreciate like the value and efforts that they do.
Jed: Well their concerns are valid. They’re there. There’s no question. And I think this is where, you know, one of the things I’d say about Fort Collins, we have a lot of good minds here. People want to be here for a reason and some of the best and brightest have moved here. And so we’re attacking these questions and we’re looking at it and saying, you know, how do we, how do we address the concerns that are valid and how do we meet the needs of a growing population at some point, something’s gotta give. I don’t know if I’m qualified to make that statement of what that is, but the PR program will, will be beneficial to, to, to many and from what I’ve seen in, for someone who considers himself supporter of the environment, a strong one for years. I think it can, I think it can be made to work. I really do. But it’s not without its problems, that’s for sure.
Jed: Yeah. It’ll be interesting to see What that looks like and how fast it fills up and what the, what the river through town looks like afterwards. And have a lot of people asking you, as you move into the, as they move into town, do they, you know, talking about the water situation, the rivers, the impacts and you’re bidding on it?
Ryan: Yeah, they do. And I think people have the notion that, you know, water is a scarce resource and it absolutely is. But, In my opinion, we are so close to such a tremendous volume of water, even though it is owned by, you know, a number of different people. I, there’s just a lot to be said. Like I would much rather. You know, water is going to be like the new thing that like Wars are fought over, you know, down the road in the distant future. I’m not trying to be like doomsday, but you’d much rather be 50 miles from like Rocky mountain national park and all the like, you know, hundreds of inches of snow that then the pores in there every year than you would in Phoenix, Arizona at the very end of the Colorado river. Right. Like that’s just, that’s simple. That’s just basic stuff.
Jed: Absolutely. I agree. And so yes, there’s a lot of fighting over water and there will continue to be and it’s going to be very, but you. It’s good to be close to the source and we’re close to the source and we had a good year. I mean we had your, a great snow pack. I’m hoping that will, that trend will move in the next year and yeah. Today was absolutely beautiful day. Yeah. Although I didn’t get out in it. That was, I saw it through the window and assaulted. Yeah. Yeah. That’s the thing. I have to chuckle about people moving here. Maybe they are able to find a job that allows them to get away from that desk, but not this guy. I am either in a desk or a courtroom. So yeah. Dealing with things. But yeah, I I think that those, you know, those are the trends that I’m seeing right now and the final trend I’m seeing, it’s not so much environmental and trust me, if there’s a need for that, that’s the type of work I would love to do, to get, to get back into.
Jed: But like you, I just meet the, I just address the demand. Right now. The demand is, there’s always a demand for real property, real estate. There’s always demand for water and there are a million different subsets of, of water law that are contested or worked on the oil and gas development that we’ve seen. The explosion we’ve seen from you know, the new technologies to, to access and you shale a type of oil and gas. And then finally what’s the other thing I see a lot of land use, just kind of your basic land use issues from historical preservation to just ordinary development issues. Areas that were for years and years just kinda laid fallow. All of a sudden there’s a strong interest in developing them preserving open space. Those are all right now what were in our firm we see just on a consistent basis are there other needs and demands out there?
Ryan: Sure. But that’s what her from I would say I would just call bread and butter. It’s all the time people are constantly coming in. Okay. Needing assistance with that? Yeah. Say the name of your firm Jed.
Jed: Yeah, it’s a Bell, Gould lender and Scott, we’re in a, the old town area of Fort Collins. The North side of the public library in one of those old Victorian homes. Yeah. It’s a beautiful office. Have you been, you haven’t been to our new place yet. You need to come over?
Ryan: No, I have, I was just there three days ago getting a will saying, Oh, you’re taxes. [inaudible]
Jed: Yeah, that’s right. I think I saw that. I meant to say something to you the other night when I said to you I thought I saw that you and Greg had met. So yeah, it’s a good group of folks at that I have the privilege of working with.
Jed: And you know, I, I would say just as a shameless plug for my firm we, we were pretty broad and, and the, the spectrum of what we do, we, we don’t practice and family law. We don’t do criminal defense. And for years we’ve been just a general practice civil firm, but lately we’ve been pretty strong in a municipal work, land use you know, credit or debt or workouts. I’ve handled a lot of heavy dose of litigation. And then finally the oil and gas water, which is kind of a personal love of mine. Okay. And I’d love to do more clean air act and, and matters like that, but that typically is handled at the state level. And it’s, it’s just kind of outside of what we get to see often. I knew enough to be dangerous as someone, one of my friends likes to say. [inaudible]
Ryan: Well, cool man. Well, awesome to catch up, have some beers. Yeah. Finally, finally got together and to do this. And thanks for the time.
Jed: My pleasure. I think you, anyone who’s listening to this needs to come by, see Ryan and ask for a Two Hearted Ale. Yeah. We got, we always got a great group of people over here and Ryan and his family are dear people,
Ryan: Thanks buddy. Appreciate it.