I agreed to lease to McDonald's in kiowa,Co. in Sept. for $75.00 4yr + 4yr. @ 15% .
They had a 60 day pay period but I crossed it out and put in 30 days anyway they just sent my check dated dec. 12 which missed both dates. I now see on this site that they are now up to $100.00 dollars.
My question is should I cash the check or demand a new deal?
Mr. Speckman, ethics aside, from a practical veiwpoint, do they have your executed lease in hand ? If so you could face a legal battle costing tens of thousands of dollars, possibly $50,000 to $100,000 dollars which you could lose and you might have to reimburse the lessee for the same amount should you lose. Do you have so many acres in this lease that $25 per acre would make the risk worthwhile ?...... Getting on to the ethical part, yes it's insulting to be paid late. If they did not already have my lease in hand, I might point out that they did not have my lease and that they didn't abide by the terms of our original agreement, that I am still marketing my minerals whether it be to them or someone else. The point is that when it comes to executed leases, posession really seems to be 9/10ths of the law. I am in a legal battle right now with a company that has a lease I executed that never paid me or told me we had a deal. I had to find out they recorded the lease after the terms of the draft had expired, through a record search. It has been an expensive uphill battle the whole way. I'm reasonably sure my lawyer is going about it the hard way, and he may get fired soon. I would say that if you have complete records and the lease in your posession do whatever you like. If they have your executed lease in their posession be ready for a fight if you want to repudiate the lease, which is probably the only basis in which they would even consider a renegotiation. Good luck with your decision.
McDonald's? Now we know why their fries taste so good!
Greg, It sounds as though you are speaking from the perspective of an Operator or Landman. If so could you give me your opinion concerning "clean title" ? For purposes of Division Orders would you accept an Affidavit of Heirship if no other evidence existed in the County records and the relatives who filed the affidavit also owned deeds in the same section?
Greg Taft said:
I think you should point out they did not live up to the lease terms. Only reason I say this is they may acknowledge that they didn't live up to terms and want to amend or start a new lease. I know from my perspective there are times that companies slip and sometimes for a small amount (say ~$25 an acre in your case) we are willing to spend that to make title clean. We all like clean title. I wouldn't be unethical, but give them the opportunity to make it right even if you do not get the additional bonus. It also helps set the stage as a serious mineral owner. Sometimes you find yourself leasing to the devil and they don't pay royalties, or pay them way late, pay bonuses late, forget to pay shut in royalties, etc. A different perspective than most perhaps, but some food for thought.
Thanks Greg, It is less than 10 ac. Do the same people usually to the title work for division as did the leasing. Our well is nearing completeion and I need to get my Ducks in a row.
Yes that does help. Thank you for taking the time to give me a thorough explanation. Best Wishes!