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Landman comes back and says," oops I made a mistake 20 months ago so send me the money back! its spent and gone!! now what??? Thanks for answers

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Permalink Reply by Michael Hutchison on February 7, 2012 at 9:41am

Charles, It may be fairly common. You may recall a few months back I started a discussion about a problem with someone having leased some mineral acreage I had already leased and the company paid both of us. After talking to a couple of attorneys as well as landmen I am now under the impression that for leasing purposes, especially small amounts of land, it is common practice to do a "cursory" title search. Isn't that similar to pooling for curative purposes? The attitude of one Landman was it will all come out in the wash, meaning division orders.

Permalink Reply by Buddy Cotten on February 7, 2012 at 2:20pm

Dear Mr. Hutchinson,

In my shop we run four types of title:

Buy title

In depth title

title for an abstract

Division Order title

Buying leases we run buy title unless the client tells us that the tract is going to be likely drilled. The we run in-depth title.

Best,

Permalink Reply by Buddy Cotten on February 7, 2012 at 2:23pm

Dear Mr. Williamson

Glad I could help.

Do you have time for another title opinion? My client asked for me to find an lawyer to render a quickie.

Best,

Cliff Williams said:

You are correct and I should have made it more clear. If the contract is rescinded then the money must be returned. I had just copied the reference for the case above and was going to take a look. I'm going to use your disclaimer on mine as well.

Cliff Williams

Permalink Reply by Cliff Williams on February 7, 2012 at 2:46pm

Send me a note at and we can chat about it and see what we can do. I think we can do something that is pressing. My others have some cushion before drilling.

Cliff

Permalink Reply by RK Leonard on February 7, 2012 at 3:20pm

Is this what it means to not warranty the mineral title. I've read through some of your do's and don't and I don't know what it means...any help

Thanks,

Buddy Cotten said:

Even IF you struck the warranty provision in the lease, you are still bound to return the money. There is an unpublished case just like that and I will look it up and post it here.

The covenant of seizin, when there are words of grant (such as the grants, lease, sets over, etc in the lease) promises that you have the authority to lease.

Striking the warranty does no good to allow you to keep the bonus money. You would need a broad disclaimer to do that, which states that any monies paid will not be returned in the event of title failure.

Best of luck,