Greeley, CO asked in Real Estate Law and Energy, Oil and Gas for Colorado

Q: Dispute with HOA over our mineral rights.They are claim ownership rights.We say we own but give HOA POA.Who is correct.

Does HOA have rights to royalties?

From covenants:Mineral Interest. The Board of Directors shall be given the express authority to negotiate the precise loca­tion of any exploration and production activity for minerals of any type with the City of Greeley to approve such location or, in the alternative, the Board of Directors shall have the ability to enter into contractual agreements with the State of Colorado by which mineral production will be prohibited. This Declaration expressly grants to the Board of Directors and makes mandatory the irrevocable appointment of the Board of Directors as attorney-in-fact for each Lot Owner to act on behalf of those Lot Owners with respect to all issues asso­ciated with mineral interest development within the Project.

1 Lawyer Answer
Jim Ed "Jed" Franklin
Jim Ed "Jed" Franklin
  • Energy, Oil & Gas Law Lawyer
  • Denver, CO
  • Licensed in Colorado

A: There is a lot to this question. The first is whether the lot owners were given the minerals to begin with. If so, then the question is whether this covenant applies to each lot. It probably does. Then, what does this covenant mean. This covenant allows the HOA to execute leases for each lot owner. This is probably to control development in the subdivision. What isn't clear is who gets the bonus for signing the lease and who gets the royalties. It would appear that the lot owners get that money but the HOA negotiates the lease. An attorney would need to see the deed, the declaration of covenants, and probably the HOA bylaws to answer this question in full. If there is a lease on the property, then that should be examined, too. But it sounds like there is a lease negotiation in progress or production is occurring and you are trying to figure out your rights. I suggest contacting a local oil and gas attorney to determine if you are entitled to the royalties.

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