I like to receive physical checks in the mail. I enter check amounts into a spreadsheet with one column per month, and I batch up each month’s checks and make one checking account deposit. At tax time, I make sure my net check amounts tie to Forms 1099. It works well for me.
Some of my royalty payors include a form for signing up on EnergyLink but I have always ignored it. Recently one of my wells has been taken over by a different producer that right from the get-go provided absolutely no information on the check stub other than “see EnergyLink”. And now another payor has sent me a form for signing up for ACH payments and it looks as if they may try to require me to accept this.
My minerals are in NM and TX. Do I have the right to require traditional checks by mail with all the traditional information mailed to me? I hope they can’t force me to switch to one of these automated payments and/or online information providers. My check register will be a mess. And I don’t want to have to go online and print the check-stub info myself. Does anyone know what the state laws/regulations require in my two states?
Downloading the check stubs is simple and you can save the pdf to a folder on your computer which will allow you to always be ble to access the details. There are quite a few companies which do not send the check detail and you will have to access on-line. In my experience, you do not have to agree to ACH deposits. If you do agree to ACH, then you should get an email notifying you of the deposit. Be sure to read the ACH agreement terms. Some state that the payor can reach into your account to take back any claimed overpayment, which I do not accepatble. If the company claims an overpayment, then it should send a detailed explanation. You can decide whether to let the company deduct from future royalties rather than sending money.
I have one company who charges $15/check that they cut for me. The lease on the wells they operate was signed way before direct deposit was ever invented, so I am not sure how they have the authority to do this. Is there anything I can do about it? Mr. Baker, your response to the original question was unkind—rule # 1.
Many of us prefer regular checks. You might read the statute for oil and gas in each of your states and see if there are rules about forcing ACH. I have heard rumbles about it, but not sure it is law yet. The $15 charge sounds high, but it does cost them “people” time to do that sort of thing. I have never been charged for a paper check. Request that they waive the fee and see if that works. If your lease is a gross royalty lease, then you might have a leg to stand on as that is an extra fee.
Thank you, M_Barnes. I did stop by their office to discuss it with them asking where on my lease did it allow them to do this. They removed the fee on two checks and then came back and recharged me on those two and have continued to charge me. The wells are in Texas, so I’ll check out that laws might apply to this.
There are companies which do things which are not correct. Consider sending a certified letter demanding that the company either refund the charges and not make any additional charges or provide the Texas statute which gives them authority to make this charge. Be aware that the company may refuse to do this unless you involve an attorney. If you decide to use ACH, then be sure to review the authorization form and delete language which would allow the company to reach inside your account and remove money.
The company that sent me a check with a stub stating only “see EnergyLink” uses a 3rd party bookkeeping or accounting service. I infer from my t/c’s with the accounting service that the operator contracted for them to only cut checks, without detail on the stubs. The accounting service has promised to mail me the stub info from that first check, and to encode my owner number so that future checks will have the detail on the stub. The second company, the one that sent me an ACH sign-up form with a cover letter from which I inferred it might not be voluntary, told me on the phone that the intent of the mailing was to make royalty owners aware of the option, and that some owners want it and some very much do not. Meanwhile I talked to one employee of the State of NM who said she reviewed the regulations. She sees regs about the operators being required to pay and to provide info, but the regs are silent about the methods. I will be talking to my O&G attorney in a week or two about a quiet-title project I need to undertake, and will ask him if he knows anything about this issue, altho his niche is really title work so I’m not sure if he knows much about this particular issue. [By the way, thank you to HelenLC for the comment about the first response. It did take me aback a little.]