Replies to This Discussion

Permalink Reply by M. Mcwilliams on August 6, 2008 at 0:23

But she said they haven't been approached. Maybe the neighbor hired the attorney to find and negotiate with the companies for the best bonus? If that were the case, it's no different from what any of the other of the people are doing who are charging fees. I just don't know if we had enough information from her post to say that this is corrupt or unethical. Her question was whether they should wait or should deal with this attorney. Is the attorney taking the lease in his/her own name, or in the name of the oil company? If he takes it in his own name to flip it, there's nothing for him to charge a fee on, because that would mean the attorney paid his own money for the lease. If he comes in representing the oil company, he can't charge a fee to the landowner, that would be unethical, because the oil company would be the client. Just not enough info here to say.

As to the original question, if your neighbor signed a lease with any of the companies, that should indicate that there is interest. If the neighbor signed with this attorney, then the attorney may just be gambling that he can flip the lease. It all depends on where you are and what interest there is in your neighborhood.

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Permalink Reply by crazycat on August 6, 2008 at 7:53

There was no name of who the O&G company was and he only got the paperwork from the attorney telling him he would get a royalty check for 25% and the mineral rights were for 3 years. This deal was just between the attorney and him and I asked him who would send him a royalty check and he did not know, but the attorney cut him a check for $7,500.00 and charged him a $300.00 fee. Now none of us in our area have been approached or sent any letters or had any interest shown in this area. So I was wondering does the attorney know something we do not and should we question this. If he paid him the money from his own pocket does he know own the lease and will he be able to lease it to an O&G company for a profit?

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Permalink Reply by M. Mcwilliams on August 6, 2008 at 9:24

There's really no way to tell exactly what kind of arrangement they had without looking at their documents. What area do you live in?

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Permalink Reply by crazycat on August 6, 2008 at 10:03

West Shreveport by Jefferson Paige and Curtis Lane

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Permalink Reply by M. Mcwilliams on August 6, 2008 at 12:45

I still believe it sounds like the attorney negotiated a lease with a company on your neighbor's behalf. If so, find out from your neighbor what company is on the lease. When you say that he got paperwork from the attorney, what kind of paperwork did he get? Was it a lease or a letter explaining an offer?

If an attorney accepts a fee for legal services to a client, that attorney should not then buy a lease for the purpose of selling it at a profit. That would be a conflict of interest, in my opinion. The attorney's duty is to the client who pays a fee for the service. Why would the attorney pay your neighbor $7,500 and then collect a fee? See what company was involved, and see about contacting that company. If there isn't a company named, then you might do what the other person suggested and write the companies directly. There should be some neighborhood groups around you, have you talked to any other neighbors? And if it sounds like a good deal to you, maybe you want to talk to your neighbor's attorney and find out exactly what the offer and payment was all about. Anything else is just speculating, in my opinion.

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Permalink Reply by insomniacnla on August 6, 2008 at 13:05

Great answer. Also, the attorney issuing the landowner a check from the attorney's bank account is nothing unusual or unethical. Attorneys maintain an escrow or "trust" account and when an attorney receives a payment on behalf of a client, like when they settle a claim for damages, the payment could be a bank draft which the attorney then deposits into their escrow account. After the money is collected, the attorney disburses the money and writes out a check from the escrow account to the client, then writes out one for his/her fees. Or if the check is from an out-of-state insurance company, the attorney will deposit the check in the escrow account and waits a certain amount of banking days to make sure the check is valid and then issues checks to the client and to his/herself out of the escrow account. Real estate and title attorneys also use the same practice.

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Permalink Reply by crazycat on August 6, 2008 at 14:44

He said it was a contract that he would get 25% royalty and that he had leased his land for the mineral rights for 3 years. I will take your advise and ask the attorney what his process is. I have questions about this myself. Thanks again.

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Permalink Reply by insomniacnla on August 6, 2008 at 15:06

The attorney needs to be clear to you about what has taken place. If the attorney has done nothing inappropriate, then he/she will have nothing to hide. You should ask the attorney for a copy of everything, that includes any checks received as payment from the o/g company for your mineral lease, any agreements the attorney has made on your behalf, any correspondence the attorney has sent/received and most of all, any lease that the attorney has entered into on your behalf.

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Permalink Reply by M. Mcwilliams on August 6, 2008 at 16:09

Absolutely right, insomniacnla, as to how crazycat should safeguard her interest. I'd add, too, that before it ever gets to the point of leasing, you could request that your agreement and relationship with the lawyer be spelled out in a retainer agreement.

Permalink Reply by Bobi Carr ("parker") on August 6, 2008 at 14:00

The 300 is 4% of the $7500. A friend of mine leased through his attorney.

I think if you are going to pay anyone 4% (or any other %) then you should do it with an attorney.

Then if there is any later dispute to a clause in the lease, they would be in a better position to defend the lease, because they would know what the intent of the document was at the time of signing.

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Permalink Reply by M. Mcwilliams on August 6, 2008 at 14:06

You know, crazycat said her neighbor was paid $7500 for a quarter acre, and no company has approached any one else in her neighborhood yet. That's $30,000 an acre! Nothing to sneeze at - I think I might be willing to pay the $300 fee to send someone out to find me the same deal.

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Permalink Reply by Johnson on August 6, 2008 at 9:42

That is exactly what he wants to do. He's trying to do what the O&G's are doing.....lease your land and make money off of it.

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