Gas and oil company wanting the lease money back

Is there anyone on here that has found out that the lease money you have been paid, should not have been and they are requesting it to be paid back.   I guess they did not check out the  deeds correctly and paid people and now say they should not have.  This is 2 years after they paid.   Just wondering to see how others are handling the situation.   

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Permalink Reply by Olive Sue on February 27, 2014 at 6:36am

Most groups made their interested parties aware of signing nothing that would indicate they were warranting their deed.  As in the Alov and many others if that statement or similar was included in the lease, it becomes the company baby.  They could learn to whistle Dixie!!!!!

Permalink Reply by Mark McGrail on February 27, 2014 at 8:29am

This situation is an example of why you do not want a clause in your lease that states Lessor will warrant (guarantee) title.

Landowners need help negotiating leases for this reason.

Permalink Reply by countrygirl on February 28, 2014 at 2:41am

There is a clause like this....and that is bull.....they prey on people, just run thru the lease and have you initial here and initial there....how do people know they have a clear title.   They tell you they will run the title and when it clears they will send you a check.   The back page states they will do 3 

1. Lessee's review and approval of title of parcels listed in lease

2. Lessee's review of all or part of the co-op parcels submitted

3. final approval by Lessee's management to tender payment.  Lessee has right to  to reject said lease should title be unacceptable to Lessee  or for any other reason including but not limited to insuffiecient funding for  payment to  be made to Lessor and insufficient assignment interest in parcels.

When signing people up they tell them they do a title search and if it is clear they will pay and if not then they will not get paid.   Most people sign knowing they will do the title search.  should these people pay for what the other companies did not do......

Permalink Reply by Frank Walker on March 11, 2014 at 10:18am

Dude

Sounds to me like you're looking for cover where none exists.  It's up to YOU not to warranty your mineral ownership (the language was posted earlier in this thread).  It's up to YOU to hire a lawyer if you are not competent to handle O&G legal matters.  None of this is the fault of any O&G company.  If you're on the hook it's because YOU failed to do your due diligence early on.  Learn to take personal responsibility for goodness sake!!

Permalink Reply by countrygirl on March 12, 2014 at 1:20am

I am sorry but they come to your home and want you to sign for them to do a title search on your property, it is at there expense to do so.   They say you do not need to go check it out that is their job to do so.  (I guess that was a number one mistake)  They will not pay if anything comes up on the title search.  You sign for 90 days for them to do that...everybody around is receiving checks, you get a letter stating they are not done researching your title, when they are done then you will either receive a check or they will notify you by mail that they are not able to pay....Well guess what they sent the check...I would have thought that by them sending a check all is clear..and I am not looking for cover.......they simply did not do as they said they would do....If a person was trying to deceive them then I could understand all of this, and it would be my responsibility   there is no wells or royalties or anything of the sort on the property.....it seems it was under an old lease from the 70's that should have been found if they would have done the title search, which would make it there responsibility.. that is simply all I am stating......They need to take responsibility also...... 

Permalink Reply by BIG on March 12, 2014 at 2:01am

Next time B Ayers read through the lease and ask questions about every paragraph.  Its your responsibility to ask questions.  Nobody forced you to sign anything without reading through the lease.  Normally the title search will clear everything, but things can come up after an initial title search is completed.  Does it stink, yep, but it can happen.

There might have been a title search done, but if a questionable reservation came up and now the company feels the mineral rights are not yours they will come back to you for the money.  A judge could have ruled that under the dormant mineral act certain reservations should be looked at differently and that could have changed the title.

Permalink Reply by Frank Walker on March 12, 2014 at 3:08am

B Ayers

I understand your frustration.  But, sorry, it's on you 100%.  Let me tell you a personal story:

There was an old lease on my land that nobody else found . . . except me.  How possible?  The darn lease was in a virtually unsearchable book of records in the courthouse, written in cursive!!!  There was no index and no reference to the lease anywhere else . . . just the lease record itself standing alone.  Heck, you go blind in a few minutes just trying to read the cursive (i.e., hand written) writing!

So how'd I find that lease when nobody else could?  It's called due diligence.  I went and interviewed a prior owner of my property.  He told me about the lease, which was some 50+ years old!!

Full disclosure:  I got lucky.  There could be OTHER old leases on my property.  I would never have found the lease I found had I not known it was hiding in that book.  Like I said, the darn thing was all but unsearchable.  So what's the answer?

The answer was already posted by another poster earlier in this thread.  It's lease language that protects you from "unfindable" old leases like the one I found only through blind luck.  And if you don't know enough to include language like that in your lease, you have no choice but to hire a lawyer.  Any other course of action can leave a Lessor where you are now.  And nobody wants that.

Finally, one thing NOT to do is rely on the word, on the statements, of a land man or a gas company.  The gas company is not your enemy.  But leasing is business, and the land man and gas company are your business adversaries.  It's up to YOU to protect yourself in a situation like that.  Leasing is hardball, not wiffle ball.

Permalink Reply by Jim Litwinowicz on March 12, 2014 at 3:39am

It woulda cost maybe $250 to have an attorney review the lease.  And indemnification is one of the things they look at first. Sure woulda been worth it.

Permalink Reply by Philip Brutz on March 12, 2014 at 4:16am

I bought my land in 1987.  Long before the oil and gas boom.  I paid $250.00 for my lawyer to go to the courthouse and search for old leases.  He found an old expired gas lease.  We had the owners of the land contact the gas company and get the lease recorded as canceled BEFORE we made the final payment.

Landowners that are considering selling their mineral rights should hire a lawyer to go to the courthouse and search through the records.  When you sell mineral rights you are selling property.  You must warranty that you actually own the property that you are selling. 

Permalink Reply by Jim Litwinowicz on March 12, 2014 at 4:43am

You absolutely do not have to warranty the lease.  You state that "to your best knowledge" and then have a clause that states it is the responsibility of the gas company to warrant the lease and that they must indemnify you should any future disputes arise over ownership or prior leases.

This is one of the things a lawyer would look at first. It is critical for everyone to have, no matter how many title searches have been done or what documentation for clear title one has. With the huge dollar amounts in play, someone will try to make a claim. And its far better to have the company pay the legal bills generated than the landowner.

Permalink Reply by Philip Brutz on March 12, 2014 at 4:55am

You do not have to warranty the lease but you do have to warranty that if own the mineral rights if you sell them.

When you sell mineral rights you are selling property.  You cannot sell property that you don't own. 

Permalink Reply by Jim Litwinowicz on March 12, 2014 at 4:57am

First off, this thread is about leasing not selling.  You are moving the goal posts.

And the buyer assumes liability if you word the sales contract properly.

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