April 25, 2012 / 7:53 PM / 6 years ago

DR Horton to drop natgas drilling rights in North Carolina

(Reuters) - D.R. Horton, the largest homebuilder in the United States, said it is suspending its practice of keeping the rights to drill for natural gas underneath the new homes it sells in North Carolina.

Pressure had been mounting on the Fort Worth, Texas-based company due to a public outcry, as well as inquiries launched by the state’s Department of Justice and its Real Estate Commission.

Both agencies were reviewing the way the homebuilder was reserving the legal right to drill for natural gas, minerals, and other resources underneath the homes it was selling across its subdivisions in the state.

This spring, North Carolina’s legislators are set to debate legalizing hydraulic fracturing, known as fracking.

D.R. Horton, which declined to comment for this story, said in a note to regulators that it “does not want to create or contribute to any controversy” regarding legislative and regulatory matters in the state.

The North Carolina Attorney General’s office said that D.R. Horton would deed back mineral rights to any homeowner who requested that the company do so.

Some home buyers had complained they did not know they were giving up their rights, in perpetuity, to the natural gas, groundwater and other minerals beneath their homes when they signed their sales contracts.

In a written statement sent on Tuesday to the North Carolina Real Estate Commission, D.R. Horton said it is the ordinary practice for home buyers to buy homes without the mineral rights in most of the states in which it does business.

The company said it may revisit the issue once state officials resolve the laws and regulations for energy and mineral extraction from North Carolina real estate.

Fracking is a controversial practice that involves blasting a watery cocktail of sand and chemicals deep underground to fracture rock and free otherwise unavailable gas and oil.

Critics of the technique warn that it can poison drinking water, contaminate air and pollute soil. Some scientists have even argued that fracking has contributed to earthquakes. The U.S. Environmental Protection Agency is currently studying the public health and safety aspects of fracking.

Supporters of the process say that, if it is done properly, it poses no environmental threat and delivers a much-needed supply of alternative energy.

Janet B. Thoren, Legal Counsel for the North Carolina Real Estate Commission, said her agency was pleased with the company’s decision.

“I think D.R. Horton is a Texas based company and this is something they are used to dealing with in other states, but not here,” said Thoren. “I don’t think they were expecting the reaction they got here.”

Reporting By Michelle Conlin in New York; editing by Andre Grenon

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