payment run around
We have a few acres and was approached to lease. They are already building the location to drill so it won't be long.
We agreed to the amount of up front money and the language in the contract. We also requested that we receive a cashier's check on the day of signing. The landman said that the company agreed to all that and then yesterday I get an email saying he was bringing a draft. He said they would give me the check in 30 days after the title has cleared. I sent him an email back saying that is not what we agreed on and when he brought my check I would sign. Am I being unreasonable? Do I have a choice as far as payment type?
We agreed to the amount of up front money and the language in the contract. We also requested that we receive a cashier's check on the day of signing. The landman said that the company agreed to all that and then yesterday I get an email saying he was bringing a draft. He said they would give me the check in 30 days after the title has cleared. I sent him an email back saying that is not what we agreed on and when he brought my check I would sign. Am I being unreasonable? Do I have a choice as far as payment type?
Views: 125
Replies to This Discussion
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Permalink Reply by Tim Boyet R3 on
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Don't wast to much time and make a decision for eveyday you wait is one more day the draft could be on the way
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Permalink Reply by Grice on -
Mr. McConnell, I request your thoughts about something related to your response.
A lease become enforceable upon the recording of said lease. If a draft is accepted, the lease signed and recorded, but it is discovered that the draft does not clear the bank, then the only option for the landowner is to file a civil suit against the person who issued the draft? The law does not provide for termination of the lease, due to nonpayment of the bonus. Now, while the law does provide for an injunction against a company alleged to be in violation, if the draft was not issued by the O&G company, then the suit would not halt production of the well(s). The lease will remain enforceable, and the O&G company will be free to go into production, while the landowner (who filed the suit) would not receive his share of the royalties (if any) until the lawsuit has been satisfied. While any unpaid revenue (if any) would be placed in an escrow account, the defendant's attorney can "tie up" the case for several years. And then, only if the courts find in favor of the plaintiff, would they receive the money held in escrow.
Am I wrong here?
Can the landowner rescind the lease, if the draft is not honored (after the lease has been recorded by the state)?
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Permalink Reply by BIGWOOD66 on
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Should a "bona fide" offer be made in the interim have it on paper. A "pending" contract seen by the judge will expedite a damage ruling far better than the L/O saying "I was offered such n' such, by so n' so..........". What about it Jim?
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Permalink Reply by Grice on
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I know you directed this question to MrMcConnell, but I want to impose my thoughts to the question.
The draft note, within itself, would be that paper you are talking about. The problem would not arise from having verifiable proof of the intended transaction, but more of having the opportunity to plead your case before a judge, which could take years.
That is why I suggested only signing a letter of intent, and not the lease itself. If the draft proves to be non-redeemable, no legal issues would arise, and no need to file suit in a court of law. If the draft is redeemable, then the landowner signs the lease, and all is happy....until the landowner hears that his neighbor got twice as much as he did (just a joke, Thunder, no offense to you personally).
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Permalink Reply by Grice on
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Forgive me for speaking out of turn. In the future, I will try (no guarantee) not to answer questions that are directed at you. Thanks.
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Permalink Reply by thunder on
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I hope my neighbor gets twice as much as me. I try not worry about what someone else is getting.
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We have been working on this deal for 2 months. It looks like they should already know that the title is clear. I was planning on not leasing and after reading up on it decided that it would probably be best to go ahead and lease.
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Permalink Reply by Jack Blake on
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That is who I leased to. I called Chesapeake and confirmed that Porter is a leasing agent for Chesapeake.
I'm in T 10 N R 11 W.
Where are you?
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Permalink Reply by Becky (S14 - T17N - R15W) on
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It depends with whom you're dealing... We live in West Shreveport, south of Cross lake. Our HOA negotiated the terms. We only have 1.5 acres, so it had nothing to do with lots of acreage. We told Twin Cities we would sign the lease agreement when they presented us with a check (not a draft). They produced the check, we signed and deposited, and the check cleared my bank in 5 days. I just wish they'd hurry up and build the dang well... I'm ready for royalty $$$$! ;o)
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