Bonus checks seem to be coming in with property taxes deducted and paid to county coffers. The problem with some landowners are that some of the tax assessments include improvements (houses in this case) that were demolished years ago, now the landowners have to argue the the taxes with the county. I am having trouble with this act by the energy concern to take it upon themselves to become the tax collector. As a layperson, my understanding is that the minerals are never encumbered by mortgages, property taxes or judgements, unless specifically attached. Again, property taxes must be paid, albeit by the landowner.
Does this mean that you did not receive royalties because you didn't have the subordination yet? And are you saying that you don't need it because you are in good standing with your bank, so you will receive the royalties without it? Thanks,
Fortunately we don't have a mortgage on the property. So I signed accordingly (no mortgage) and returned the form to CHK. If you have a mortage and the gas company requires a subordination, they said you have 90 days to return the form. If the bank hasn't signed off yet they will hold the royalty payment. Whats funny is my property and home is split right down the middle into two different units. (Farr & Miller). Been receiving royalties from the Farr unit since April 2012 and they never asked for a subordination of mortgage. Then I received the division order for Miller last month and the subordination was included.
Still waiting for royatlies on the unit (Miller) that has been in production since December 2011. Just received my e-mailed check stub from CHK and have only been paid for the "Farr" unit. Waiting for CHK to return my call to see what the hold up is on the payment of the Miller Unit. It could be that the division order they sent was incorrect on the acreage amounts for several landowners in the unit. You think they could figure this stuff out but they turn it into rocket science.
Thank you! Interesting. I do have a mortgage, so perhaps I should look into the subordination now before production. Certainly don't want to hold up any possible payments.
I'm not sure if this belongs here but I don't want to start a new thread. I recently signed a BP lease. My ex husband signed the deed over ina quick claim but I modified the mortgage instead of refinancing, so ex's name is still on the mortgage. I just found out he filed bankruptcy and had to include the mortgage (but not the property). My payments are current and bank knows its HIS bankruptcy, not mine. Does anyone know if the bankruptcy status will affect my mineral rights lease? Thanks in advance!
Tricky. If his name is still on the mortgage and he's in bankruptcy then you may be in for some mind-numbing paperwork. I'd talk to an attorney and make sure that you don't get dragged too far down the road by this.
Contact Atty. Andrew Suhar, US Bankruptcy Trustee 330 744 9007. You can tell him the Yellow man gave you his number.
The mortgage is not in my name only because I am recently divorced. My home got out of foreclosure only last year. Divorce is expensive; my credit is shot. I didn't have to file bankruptcy though, thanks to the loan modification. The mortgage modification changed some of the repayment terms of the original loan, but kept the low interest rate, which would be impossible for me to get right now in a sub-par refinance. The government offers modification programs like Making Homes Affordable program and HAMP. Mine is though my lender. Again, the property is not a part of ex's bankruptcy claim because he no longer owns it. He is legally responsible for the loan even though I have been making all the payments myself. I was wondering if his bankruptcy would result in a title defect delaying my bonus payment.
Farmhouse, Thanks for having my back landowner. Don't mind shoeless, he just wants "shock attention" but he may need "shock treatment."
You know my post here is as with all my post, is to get more educated while we deal with energy companies. Funny, first to respond here were theories and some legal interpretation. Then came REALITY......Matt and several others brought the discussion back to real time. My conclusion here first and foremost is that we should respect the business of the energy concerns, they are our lessee, we are their landlords. They don't buy or own anything relative to our dirt, they are tenents. Yes, they should be always secured to do their job of harvesting our minerals and we should accommodate them and facilitate their work. And if they need subordination by all means get the banks involved. History shows that this mortgage subordination has sporadically been required but not always. I still see no law, case, or precedent establishing that a foreclosure basically harms a leaseholder. My concern is that a side effect of this uncertainty, until becoming a standard, is that this may become a negotiation tool against the landowner. For instance, Ohio Land Management is awaiting a certain courts precedent on minerals of an insolvent estate. Point being just as horizontal drilling is state-of-the-art, we may also say mortgage, liens and taxes relative to new shale minerals is also state-of-the-art.
SO much to learn. Here is a link to another part of this forum about subordinations:
Fresh from Ohio Land Management's Bankruptcy trustee associate. Mortgage subordination is not required in Ohio, mineral rights are not encumbered by mortgages, taxes, judgements, liens, traffic tickets, housing code violations, weed, DUI's and jaywalking. Mineral rights stand alone by themselves with the lease.
Sorry, but your Ohio Land Management Associate is incorrect. What a mortgagor and a mortgagee enter into in terms of a contractual agreement is not dictated by the Ohio Land Management. If you, as a mortgagor own both the surface and the minerals, then when you enter into a mortgage agreement with a lending institution you are pledging EVERYTHING... all your property rights, both surface and minerals. Think about it... Why would any lending institution seek to obtain less collateral than what you own when you mortgage your property? They wouldn't, plain and simple. The same holds true for tax foreclosures, at a sherrif sale you don't just get divested of your surface rights, you get divested of all your property rights, surface and minerals.
Possibly what your Associate friend is confused about is the "Super Priority Law" that Ohio passed in 2010 which provides that an oil and gas lease will survive the foreclosure process and continue in force and effect... meaning that the new purchaser of the property will take subject to the old oil and gas lease, and they will receive any royaltyies or bonus payments going forward.
Your second paragraph is exactly what I am saying here. If minerals leased they have nothing to do with the liens on the property itself. As you stated, only if the liens are in default and a case is pending in the courts if you have not yet leased.
Please show us a mortgage,or property tax lien encumbering mineral rights?