So if somebody owns minerals in all those states and passes away, his heirs have to hire eleven (11) different attorneys to file eleven (11) different probate cases in eleven (11) different states? That is insanity.
Seems like filing a Certified Copy of Probate in each county where the minerals exist would suffice. I guess not, nothing is easy these days, there's always somebody who has to stick you for more money.
Pete, actually the operators could pay on a proof of death and heirship if they wanted, with a caveat that you would pay back all royalty if it is proved that you are not the owner. If the owners title is based on a lease from you and your title is not good enough to be paid, then how is the operator/lessees title good enough to to keep the money? because coming after the mineral owner, their title should be poorer than the mineral owners.
Buddy Cotten has a solution, paying royalty is made a condition of the lease with broad disclaimer of warantee of title and the lessee leases at his own risk. If royalty is not paid as specified, the lease terminates.
Sorry, but I don't understand your question about the Operator/Lessees' keeping the money. As soon as the Operator becomes aware that an ownership of a royalty interest has changed, by sale, agreement, divorce, other court case, or death, for example, the Operator has an obligation to suspend payment on that royalty interest until they can determine who the rightful owners are.
Yes, for the purposes of sending royalty payments, the Operator could pay based upon a death certificate and properly filed Affidavits of Heirship if they chose to. They could pay based upon a Certified Copy of Probate filed in North Dakota if they chose to. Heck, they could pay based upon any criteria they want to set for themselves, but if they are prudent they would abide by the law in the state where the minerals are located.
According to Rick, the law in North Dakota is that a probate in another state does not determine mineral ownership in North Dakota. And several other comments on this Web site have stated that the devisees and beneficiaries of the Will with respect any property in North Dakota do not become vested with title to that property until the Decedent's Will is actually filed for Probate a second time, in North Dakota. I believe that I am interpreting those comments correctly to mean that a Certified Copy of Probate from another state is NOT sufficient to vest title to property in North Dakota, there must be a separate court proceeding in North Dakota. As I stated in a previous posting, I believe that violates the Full Faith and Credit Clause of the U.S. Constitution.
Yes, timely and accurate payment of royalties frequently is made a covenant subject to breach of contract if not fulfilled.
Pete, quite simply, if your title isn't good enough for the operator to pay you royalty, then the operators title from leasing you is suspect also and all proceeds from your mineral interest should be sequestered until your title is good enough to be paid royalty. I have run into a few cases where the operators title people have dropped the ball and the people had good title but were not paid royalty for years. The mineral owners did nothing to cure their title and the operator started paying anyway, I think because they already owed almost 2 years interest at 18% and didn't want to go for 3 years interest at 18%. If the problem wasn't with the operator themselves, they would have never started paying until the mineral owner cured their title.
The Operator identified defects in title, the mineral owners refused to cure them, but the Operator started paying them anyway? Doesn't seem too smart. What if the cured (correct) title excluded one or more of the persons to whom the Operator had paid royalties? That would be money down the drain because they would have to pay it to somebody else a second time.
Pete, The operator never identified any defects in title.
I think on reveiw that the operator had not been paying, due to a mistake in their title work and they claimed there was a problem with title to avoid having to pay interest.
The operator never said what the title problem was to be cured, and then began paying the mineral owner, without the mineral owner having done anything to cure title. The mineral owner had good title all along, with probates and deed recorded in their name, her sister who was also at the end of that same chain of title had been getting paid for over a year. 18% interest per year and most of the way through the second year, with the state of ND just having passed the law that the operator must pay interest, whether the mineral owner requests it or not. Care to take a guess why the operator tried to say there was a title problem when there wasn't? Or why they started paying even though they never identified for the mineral owner what the title problem was that needed to be cured?
I have had problems with landmen doing poor work, my interest being attributed to a distant relative with a similar name and another case where one landman sent a memo to the TO people that because my aunt posessed my uncle who died without issue interests (inherited indirectly through grandmother), that she may also own my fathers interests, even though my father was divorced at the time he died intestate and had two strapping sons. Trying to straighten out such BS, I was talking to the TO person directly and I asked them if they had any scrap of paper anywhere that would show that my aunt owned my interest? The title person said "Well, I have this memo from this landman". It wasn't my title that was bad, it was the landmans work, and the TO persons fault for not asking the landman to flesh that memo out. After that operator was made party to a lawsuit I have, my title is miraculously clear, where it was not before, but my brother with the same chain of title has problems, they still owe him 3 wells, LOL. Actually they haven't got our interest straight in more than that, which is part of the reason why I have to spend some time in ND this spring and summer.
Pete Wrench said:
The Operator identified defects in title, the mineral owners refused to cure them, but the Operator started paying them anyway? Doesn't seem too smart. What if the cured (correct) title excluded one or more of the persons to whom the Operator had paid royalties? That would be money down the drain because they would have to pay it to somebody else a second time.
I guess I see what you're saying, the Operator lied by saying that there was a title defect so they would not have to pay royalties right away. But when the Operator refused to identify exactly what the defect was, the mineral owners should not have waited 2-3 years to get paid, they should have had an attorney send a demand letter after whatever time period was specified in the lease for payments to begin, or if no time period was specified given them four or five months but not 2-3 years!
I like the law that ND passed mandating interest payments for late or suspended royalties, but 18% is ridiculous. The last time interest rates were that high Jimmy Carter was filling us with malaise, and my interest on my bank account is about 1.5%. Fair is fair, 18% is not fair, should be indexed to inflation or to prime interest rate plus two or three percentage points.
Great idea in N.D. I was paid late on bonus money. I year late. Had to get an attorney, who cost $6,000 and received no interest on that money. Co said "they forgot". If my attorney cost $6,000, to collect after the executor signed, title was good etc. then I have no pity on the high interest payor. Banks do it, credit card companies do it. Why not someone who gets cheated? The oil companies seem to have lots of excuses in Texas. No infrastructure etc......no pipe lines, no trucks, blah blah...
Pete, they had to make it that high because the operators were not paying. 18% a year is only 1.5% a month and that is after 150 days after first sales, so the operator gets the first 5 months free. Look at Oklahoma where it's 12% if you have marketable title and 6% even if you don't. Operators have been claiming they were behind due to a lack of people to do the title work to groom some college freshmen through graduation to staff every position they could have. If the operators are understaffed, it's their fault and I think they are using the situation to aid their cashflow.
Pete, mineral owners are reluctant to get a lawyer involved even to the point of writing a letter, so the operator can see that you take the matter seriously. It's hard to explain to some people that a letter from a lawyer could head off a lawsuit. Many people think that once you get a lawyer to write the letter that the inevitable end is a lawsuit, when actually I believe the reverse is true, because small problems that are fresh are easily solved while those that do not get solved take on a life of their own through escalation when the dollar value rises.
In my experience if you actually want a lawsuit, don't have a lawyer send a letter, let the problem go on for a few years, let the dollar value increase and maybe some new tangles to be added and congratulations, you have a lawsuit against an oil company, which if you have a lease without extaordinary circumstances, is an expensive hobby at best.
You guys convinced me, I guess I can go along with an interest rate higher than "indexed to inflation or to prime interest rate plus two or three percentage points," say 10%, but 18% still seems too high. That rate probably constitutes usury in some states.
The lesson learned here is "don't accept a bank draft or some other promise to pay" bonus consideration, insist on a cashier's check, money order, or, as a last resort, a company check. Whenever somebody I was leasing asked for one of those, we complied, every single time. You just have to ask. It might take a little while longer for the request to get approved and processed, but it's worth avoiding the headache of being stiffed. Of course, I was working for some very large, very reputable companies with alot of cash sloshing around. Some companies won't comply with that request, though, it's the bank draft or "see you later." There is no way that I would accept a bank draft if I had more than one or two net mineral acres.
The downside is that if you "let the problem go on for a few years," you might get NOTHING or next to nothing if the company goes bankrupt.
Cookie, unfortunately it does not apply to lease bonus but only to past due royalty. Pete gives good advice on getting paid. I would also accept cash in a brown paper bag in my banks lobby, don't laugh, it's been offered, if I would just sign a ratification.
Cookie Gartner said:
Great idea in N.D. I was paid late on bonus money. I year late. Had to get an attorney, who cost $6,000 and received no interest on that money. Co said "they forgot". If my attorney cost $6,000, to collect after the executor signed, title was good etc. then I have no pity on the high interest payor. Banks do it, credit card companies do it. Why not someone who gets cheated? The oil companies seem to have lots of excuses in Texas. No infrastructure etc......no pipe lines, no trucks, blah blah...
Somebody actually offered you cash to sign a ratification? How could they protect themselves if you were unscrupulous enough to claim that you never were paid?
I guess they thought they could trust me, at least as much as they had already proven I couldn't trust them. I assume the plan was to exchange the notarized ratification for the money.
Some real "black ops" stuff there, R. W. Let me guess, was this in Louisiana? Hope you had your posse nearby in case things went south....
I figure I would just do it in the worst neighborhood in Ft. Worth and worst come to worst yell at the top of my lungs that that guy has $50k in a bag, and I could duck and let nature take it's course. I'd say Dallas but that would be another 20 minutes drive. Besides, they offered to fly someone in, it wasn't me asking.
Anything that they wanted that bad wasn't going to happen anyway for what they were offering. I guess if they had acted in a professional manner to begin with they wouldn't have thought they needed to go to such great lengths for a measley 20 acres even if it was in an extremely good area. Has 6 wells on it now.
I had an "interesting" experience in East Fort Worth during my landman adventures. It involved my trying to find an address, inquiring some thugs esconced on a front porch where I might be able to find that person, and being told where to go and how long to stay there by these cretans, and actually fearing somewhat for my physical safety. I got the last laugh though, because on my way driving out of that neighborhood I saw them again and told them that I did not think their mothers would approve of the way that they wore their pants.
I have a question; my mother had a trust, and will, the mineral interests she owned (in Clorado ) were forgotten and not mentioned. The estate was divided among me, and three other kids (4 kids) ...My sister and 1 brother seem content, they have signed lease agreements, but I want a deed in my name first. I want everything legal, I don't want problems. So my question is, would the Lawyer involved with the Trust be the trustee, and he could transfer the deed for my portion mineral interests to me...If not, I hope you can give me some direction where to start the process of getting a Deed in my name...
Well, that's a very nice Petition, but you did not attach the actual Will. Post a copy of the actual Will for a more helpful response (redact names and contact information if you want). Depending upon how the Will is worded, you might be very wise to insist on a formal transfer of title. The Trustee of a "regular" Trust, meaning a non-Testamentary Trust, meaning a Trust not created inside a person's Last Will and Testament, would be specified in the Trust Documents (the papers whereby the Trust was created). The Trustee of a Testamentary Trust, meaning a Trust created inside a person's Last Will and Testament, would be specified in the Will, a great majority of the time.