My father owned a piece of property that had mineral rights. He walked away from the property – didn’t sell it, just walked away – years ago but continues to receive checks for those mineral rights all these many years later. Is there anything illegal about this particular situation?
Nothing at all illegal about this situation. As long as he still owns the mineral rights on the property, he is entitled to any production on the property.
Mr. Ingels, I can’t really speak to possible illegality of this with the data given, but I will say that the only thing that really matters with respect to the revenue is whether or not the legal owner of the minerals is receiving the royalty payments.
I’m curious - when you say your father “walked away” from the property, did he walk away from a mortgage as well and just let it go back to the bank without selling it?
If the answser is “No” and he still owns the property outright and has also retained ownership of the mineral rights, then it seems to me that he should be just fine.
Anyone that makes a determination on the information offered is being very naive and foolish. Way to many variables that need to be answered, i.e, did he reserve the minerals? Did he reserve royalty? Did he sign a lease? Did the lease contain a Warranty Clause? When he “walked away” did he stop paying taxes? Etc., etc., etc.
NOT LEGAL ADVICE
Dear Mr. Ingels,
Traditionally, when one “walks away” from a property that means he stops paying a mortgage. If your father stopped paying his mortgage years ago, and there was a subsequent foreclosure, then he does NOT own the mineral rights any more and is NOT entitled to receive royalty payments any more. And any minerals or royalties that he might have severed before “walking away” are forfeited to the new property owner unless the bank released them beforehand. And any oil-and-gas lease that he might have signed before “walking away” is null and void unless a Subordination was executed beforehand.
If your father had no mortgage or other encumbrance on the property when he “walked away,” but there was a subsequent tax sale for failure to property taxes, then the same would apply. There’s not enough information provided.