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State lawmakers push for transparency in drilling rights beneath Florida homes

State lawmakers are hoping to bring some order to the controversial practice of builders pocketing the mineral rights beneath Florida homes.

Rep. Ross Spano, R-Dover, and state Sen. Jack Latvala, R-Clearwater, are sponsoring legislation that would force home sellers to alert prospective buyers in advance if they intend to keep the rights to drill underground.

HB 489 would demand that sellers provide written notice at least three days before starting a sales contract. The notice would also inform buyers they could renegotiate the contract to account for any loss in value from giving up the land and rights to phosphates, oil and other minerals underground.

Lawmakers said the legislation came in response to a Tampa Bay Times investigation in November that found homebuilder D.R. Horton had hoarded the rights beneath more than 2,500 home sites across Tampa Bay, many of them in eastern Hillsborough County.

The bills would address frustrations from home buyers who accused builders of keeping the drilling rights secret or of sharing their plans only at the closing table when buyers felt pressured to go ahead with sales.

Mineral-rights deals are common in the energy-rich markets of Texas and the Midwest, but their recent introduction into Florida suburbia has led homeowners to worry about surprise drill zones, industrial noise and sinkholes.

Since 2007, D.R. Horton, the nation's largest homebuilder, signed over the eternal rights to explore, drill or mine beneath thousands of new home and townhome sites to its Texas-based subsidiary, DRH Energy. The rights extend hundreds of feet below ground.

It wasn't clear what homebuilders expected to find deep beneath Tampa Bay's suburbs. But with recent advances in drilling technologies that can tap once-untouchable natural gas and oil reserves, experts say builders see the deeds as lottery tickets: potential jackpots buried beneath homes.

Though a D.R. Horton attorney said the rights were made clear in sales contracts, the company said last month it would stop keeping the rights beneath Florida homes and offered to return them to homeowners.

Messages left with the builder Wednesday were not returned.

Builder attorney Ken Bagwell said last month that new disclosure rules could also prevent buyers from accusing the builder of any mineral-right sleight of hand.

"No one can come back and say 'I never knew,' which tends to happen," he said in December. "People's memories tend to get very convenient."

Buyers would have three business days after a contract or deed was signed to rescind it if the seller failed to provide notice. Any seller who knowingly violated the law would face a first-degree misdemeanor.

The subsurface-rights bill could be discussed during the new legislative session beginning in March. If approved, it would become effective as early as July.

Latvala said he was optimistic about the bill's passage and called it an important safeguard for home buyers' rights.

"We need to make sure we have proper consumer protections in place," Latvala said, "so people … can understand what they're giving up."

Contact Drew Harwell at dharwell@tampabay.com or (727) 893-8252.

State lawmakers push for transparency in drilling rights beneath Florida homes 01/22/14 [Last modified: Wednesday, January 22, 2014 9:33pm]
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