We signed a lease and at the time we received the bonus check it was twice as much we text the landman and said this is not right its too much he stated its ok dont worry about it…now the land man we dealt with is no longer employed there and the company has discovered the check was not correct and they want the amount returned by 30 days…are we obligated to pay back even they said it was ok dont worry about it…pleas advise
Did you warrant title on the lease?
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I doubt it we were all new to this…
We also learned that we are owed the beginning of royalties check but are in negotiations? I dont understand…you owe me money and you want your money that was given by your own fault…why not take take it from my royalties??? Lol…makes no sense
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Read the lease you entered into. It states the information you need to know.
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Double check your acreage against your agreed bonus per acre agreement. The company could have a claim for unjust enrichment, even if the landman made a bonehead statement. Might be why he isn’t there anymore. Personally, I’d work with the company.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
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If you didn’t warrant title, then it is to your benefit and might not have to give back the overpayment in bonus. Look for word like warrant towards the end of the lease you signed and see what it says.
It sounds like maybe you are owed royalties from production, but still need to sign a division order? That is normal procedure. But, you don’t negotiate a division order. They might not be able to legally net out an overpayment from your royalties depending on your lease or other factors.
You may want to kindly ask the division order analyst with the operator to break down your situation to you. When you have more information on what exactly is happening, you may get better advice in the forum. Or, you can hire a landman to call on your behalf and try to get it straightened out. Good luck!
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If you know you were overpaid, then wouldn’t the right thing be to return the money? you agreed to a price, then you should honor it and return the money, but make sure that your year end 1099 reflects the correct amount.
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Thats what we are gonna do…guess we just trade checks i guess…lol…what a shitshow. We tried when all this started and they said dont worry about it…lol.
If you don’t have to pay it back don’t. Before all is said and done you’re gonna get screwed by them anyway so keep the money unless you absolutely have to give it back they are sure not looking out for your benefit
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Believe it or not, few companies are out to screw landowners. Your advice of keeping money that you knowingly did not agree to is a dishonest way of doing business. Integrity matters.
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Really, if you’re over paid return the money. If you spent it. Set up a payment plan.
Presumably the mineral owner received a 1099-misc and paid income taxes on the bonus in a prior year. Depending on the year, it may be too late for a corrected 1099 to be issued so that the mineral owner can amend his earlier tax return and obtain a tax refund on the reduced income. The mineral owner relied on the text / written statement from the landman that the bonus should be retained. Presumably the landman was acting in his capacity as agent for the lessee, which could affect the rights of the mineral owner. The mineral owner should not suffer a net loss of funds, taking into account the extra taxes and cost of amending his tax return. Depending on the funds involved, it could be a significant amount of money. That would be part of the negotiation over what is legally due to the lessee in light of making sure the mineral owner is made whole. It is also not clear whether the lessee has the legal right to retain royalties as part of the dispute over the bonus. That will depend on state law.
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@TennisDaze thank you for a well considered answer - that speaks to the real actualities that are in play here.
The notion that a citizen should bear considerable administrative headache due to relying upon directive made by an operators contract landman is a pretty shallow treatment of the situation. (much less the idea of "just return the $). In theory (and often not in fact), the industry has ‘professionals’ acting as such, and should be very careful about what is tossed out verbally to citizens they are dealing with.
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Lease each tract by a Dollar amount, not price per acre. Then if they overpay you or under pay you that is the deal you made when you leased it. Don’t warrant the title. It is their job to get it right to start with. Also it is up to you to know what percent interest you rightfully own.
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There are keys to the bonus payment you received. Was the offer for a specific dollar amount per mineral acre? Did the offer include the specific number mineral acres? If this is the case, then a refund is most likely due to the company as stated by Winblad. This is a lesson for many mineral owners. If you were paid half the amount due, you would immediately request that additional amount due. In this case of over payment, why would you not immediately refund?
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Many mineral owners are not certain exactly how many NMA they own and so could assume that the lessee had determined that they owned more minerals. In this case, the lessor asked about the additional payment and was told by the landman to keep the money.
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