I just found out I have oil rights on my home property (owned 22 years) California
The Oil company told me today they have been paying out previous owner for the past 22 years, and informed me it is my responsibility to find previous owner and collect the money they were paid out.
Is the oil company not held liable to pay the proper owner?
Do I have any right to collect the past 22 years?
Was there anything to flag that there was production in the area 22 years ago?
That sounds like something you might learn or wonder about at closing.
What did they tell you about future payments? Now that you showed them you were the actual mineral owner.
Is the well still producing?
They are liable to pay the proper owner, but it sounds like no one gave them notice of the transfer of ownership for 22 years.
No flag,not that I remember when I purchased the house. one of my neighbors that has lived on the street over 60 years mentioned it casually, gave me a monthly payment stubs to call.
The company said to fill out a W9 and I will start receiving monthly payments immediately. yes, still producing.
I purchased the property from a bank.
Do I have any legal rights, or a mistake as such the oil companies can get away with.
they said I must find the past owner and contact them, that doesn't seem correct?
Dear Liz,
In a very customary lease, it reads essentially that:
No transfer of ownership of the lands described herein shall be binding upon Lessee until Lessee has been furnished a certified copy of such document transferring title.
So, it is not state law, it is contract law under the terms of the lease agreement.
You have a cause, subject to the statute of limitations to the prior owners. Good luck. It certainly appears that the burden was on you.
Yes Liz, you have your work cut out for you. It doesn't at all seem like the oil company made a mistake. No one informed them of the change of ownership until 22 years after the fact. I can guarantee you that when someone buys producing minerals, they notify the operator by certified mail ASAP. Otherwise, how else are they supposed to know of the change of ownership? What's tough is, that whether you have a cause against the former owner or not, whether the Statute of Limitations has expired or not, I don't believe that the prior owners have set up a Trust Fund for you. They have probably spent it. Depending on their financial status, a cause as against them may end up being nothing more than a paper judgment. It sounds like they were foreclosed on by the bank. You can't get blood out of a turnip. Forget about going after the oil co. for the reasons stated.
Not sure about California law, but most states would hold the oil and gas lease was in the deed records, and therefore was constructive notice to you.
Anyway you slice it, Liz is between a rock and hard place. My prediction is that she never sees a dime from past royalties. She should have had that conversation with a neighbor 22 years ago. She has no grounds to go after the oil co. If I was her, I would just be glad that I had this revelation, and that I can start collecting the royalties. Any other attempt to collect would be costly, and most likely fruitless.