Mineral Rights Checks

[Joe V.]

Hoping to get a general consensus of this problem that has befallen my fiance and I. To put it simply because I have no experience in this matter, we bought our house in 2015, our real estate agent told us that the seller retained the mineral rights on the land which was fine with us, but about a year ago, a guy from the wellpad company came to our house and wanted us to sign forms to start receiving checks from them. We told them we don't own the mineral rights, so we didn't sign anything but then we started receiving forms in the mail from them wanting us to sign and then we started receiving papers that listed all of the people in our neighborhood who do own their mineral rights and are receiving checks from them( and we aren't even on the list they sent! It has the seller's name on it. ) so we haven't signed anything. Also we have received a few checks in both our names but have not cashed them. I asked my neighbor's opinion and he didn't think we owned the rights either. My fiance is afraid that since we were sent those few checks that we will be sent a tax statement and will have to address this at tax time whether we cash the checks or not. We got a tax bill in the seller's name for the mineral rights and my fiance called the tax office about it and they said they didn't have his new address but how is that our problem? My concern is that the minute we sign or cash those checks , which I refuse to do, we will become criminals because we don't own the rights. For one thing, we don't pay a yearly tax on any mineral rights and our real estate agent never required us to pay on any mineral rights when we bought the house. I could care less about those checks and it really makes me mad that this oil company is trying to scam us somehow so that they can drill on our property if that's the reason they're doing this. What are your opinions about this?

 

[PayrollHRGuy]

First, if you don't own the mineral rights YOU have no say about them drilling on your property.

You are correct that you will likely receive a 1099 of some flavor for the checks that were sent to you. You, your husband or a lawyer needs to contact the oil company and clarify that you aren't due the check and don't want them. I'd suggest you do this via certified mail and include the checks that have been sent to you.

What state are you in?

 

[not2cleverRed]

Where is the seller?

 

[Joe V.]

First, if you don't own the mineral rights YOU have no say about them drilling on your property.

You are correct that you will likely receive a 1099 of some flavor for the checks that were sent to you. You, your husband or a lawyer needs to contact the oil company and clarify that you aren't due the check and don't want them. I'd suggest you do this via certified mail and include the checks that have been sent to you.

What state are you in?

I already know I have no say in them drilling on our property and we have talked to oil reps and the way they talked made it sound like we had to prove that we didn't own the rights. Well they proved that to us when they sent the list of people who own their rights in the neighborhood. Why would we have to prove anything to them?! We are in West Virginia and as far as I know the seller moved to Colorado.

 

[adjusterjack]

Why would we have to prove anything to them?!

Because self-preservation is nobody's responsibility but your own.

I suggest you take out your purchase contract and take out your deed and read them both thoroughly and carefully to see what they say about mineral rights.

Do that and come back with the results.

 

[Dandy Don]

Examining your purchase contract and the deed is an excellent suggestion so that you will know definitively whether you have mineral rights or not. The company is NOT asking for permission to drill but they want to know who to mail royalty checks to if the drilling is successful. Since American citizens relocate frequently, it should be very easy for you to do a search to find the seller so that you can notify the seller about this so that he/she can contact the oil company to straighten this out. Visit an online telephone directory website to see if you can find a current address for the seller in Colorado. Or pay a private investigator a $100-$200 fee to do a more accurate search using nationwide databases (including Lexis-Nexis and other databases) that will pinpoint the precise current location of the specific individual you are looking for. Mail a letter to the person who previously lived at your address to see if your letter will be forwarded to the seller if they reported a change of address with the post office. Or send the oil company a letter explaining that it is their responsibility to pay for a search to locate the seller (why the oil companies do not already do this is a mystery to me--unless they are just deliberately lazy or actually do not want to make an honest, concerted effort to locate the relevant parties).