LEASING OF REAL PROPERTY
Leasing of real property - Definition: Leasing is a
contract by which one gives to another the temporary possession and
use of real property for reward and the latter agrees to return such
possession to the former at a future time. Sec.
Limitations on leases: No lease or grant of
agricultural land reserving any rent or service of any kind for a
longer period than ten years shall be valid. No lease or grant of
any city lot reserving any rent or service of any kind for a longer
period than ninety-nine years shall be valid. Sec. 47-16-02.
Rent controls - Prohibited: A political subdivision
may not enact, maintain, or enforce an ordinance or resolution that
would have the effect of controlling the amount of rent charged for
leasing private residential or commercial property. This section
does not impair the right of a political subdivision to manage and
control residential property in which the political subdivision has
a fee title interest. Sec. 47-16-02.1.
Filing farm lease containing reservation of title to crop
- Waiver of rights on failure to file: When a lease of a farm
contains a provision reserving title in the lessor to any part of
the crops in excess of the rental share of the lessor until the
stated conditions of the lease have been complied with by the
lessee, such lease must be filed in the office of the register of
deeds in the county in which the land described therein is located
prior to July first in the year in which the crops are raised to
render such reservation of title effective as to subsequent
purchasers or encumbrancers of any part of the grain over and above
the lessor's rental share produced upon the land. The failure to
file such lease or contract in accordance with this section
constitutes a waiver by the lessor of all rights reserved by that
person over and above that person's rental share in such crops as
against any subsequent purchaser or encumbrancer of the lessee.
Products during lease belong to lessee - Exception: In
the absence of any agreement to the contrary between the lessor and
the lessee, the products received from real property during the term
of a lease belong to the lessee. Sec. 47-16-04.
Lease of realty presumed for one year: A lease of real
property, other than lodgings, in places where there is no usage on
the subject, is presumed to be for one year from its commencement,
unless otherwise expressed in the lease. 47-16-06. When a lease is
presumed renewed. If a lessee of real property remains in possession
thereof after the expiration of the hiring and the lessor accepts
rent from the lessee, the parties are presumed to have renewed the
hiring on the same terms and for the same time, not exceeding one
year. Sec. 47-16-05.
Automatic renewal of leases of residential real property -
When notice required: Notwithstanding the provisions of section
47-16-06, in any lease of a specified term of two months or more of
real property used for residential purposes, the lessor may not
enforce an automatic renewal clause of a lease unless the lessor has
notified the lessee in writing, delivered personally or by
first-class mail, of the automatic renewal provision, not less than
thirty days prior to the expiration date of the current lease. If
such notice has not been given, the lease expires, and the terms of
the latest lease convert to a month-to-month tenancy. Sec.
Leases - Notice by landlord to change terms - When
effective.:In all leases of land or tenements, or of
any interest therein, from month to month, the landlord may change
the terms of the lease to take effect at the expiration of the month
upon giving notice in writing at least thirty days before the
expiration of the month. The notice, when served upon the tenant,
shall operate and be effectual to create and establish as a part of
the lease the terms, rent, and conditions specified in the notice,
if the tenant shall continue to hold the premises after the
expiration of the month. For the purpose of this section, notice may
be served in any reasonable manner which actually informs the tenant
of the changes in the terms of the lease. Sec. 47-16-07.
Real property and dwelling security deposits - Limitations
1. The lessor of real property or a dwelling who requires
money as a security deposit, however denominated, shall deposit
the money in a federally insured interest-bearing savings or
passbook account established solely for security deposits. The
security deposit and any interest accruing on the deposit must be
paid to the lessee upon termination of a lease, subject to the
conditions of subsection 2. A lessor may not demand or receive
security, however denominated, in an amount or value in excess of
one month's rent, except if the lessee is housing a pet on the
leased premises, the security may not exceed one thousand five
Statement detailing condition of premises to accompany rental
agreement: A landlord shall provide the tenant with a statement
describing the condition of the facilities in and about the premises
to be rented at the time of entering a rental agreement. The
statement shall be agreed to and signed by the landlord and tenant.
The statement shall constitute prima facie proof of the condition of
the facilities and the premises at the beginning of the rental
agreement. Sec. 47-16-07.2.
2. A lessor may apply security deposit money and accrued
interest upon termination of a lease towards:
a. Any damages the lessor has suffered by reason of
deteriorations or injuries to the real property or dwelling
through the negligence of the lessee or the lessee's guest.
3. A lessor is liable for treble damages for any security
deposit money withheld without reasonable justification.
b. Any unpaid rent.
c. The costs of cleaning or other repairs which were the
responsibility of the lessee, and which are necessary to return
the dwelling unit to its original state when the lessee took
possession, reasonable wear and tear excepted. Application
of any portion of a security deposit not paid to the lessee upon
termination of the lease must be itemized by the lessor. Such
itemization together with the amount due must be delivered or
mailed to the lessee at the last address furnished lessor, along
with a written notice within thirty days after termination of
the lease and delivery of possession by the lessee. The notice
must contain a statement of any amount still due the lessor or
the refund due the lessee. A lessor is not required to pay
interest on security deposits if the period of occupancy was
less than nine months in duration.
4. Upon a transfer in ownership of the leased real property or
dwelling, the security deposit and accrued interest shall be
transferred to the grantee of the lessor's interest. The grantor
shall not be relieved of liability under this section until
transfer of the security deposit to the grantee. The holder of the
lessor's interest in the real property or dwelling at the
termination of a lease shall be bound by this section even though
such holder was not the original lessor who received the security
5. This section applies to the state and to political
subdivisions of the state that lease real property or dwellings
and require money as a security deposit. 47-16-07.1.
When landlord may enter apartment: A landlord may
enter the dwelling unit:
1. At any time in case of emergency or if the landlord
reasonably believes the tenant has abandoned the premises, or the
landlord reasonably believes the tenant is in substantial
violation of the provisions of the lease or rental agreement.
Fraudulent misrepresentations - Receipt of security deposit:
A lease or rental agreement for real property or a dwelling unit
which is entered into upon partial or total reliance of fraudulent
misrepresentations may be terminated by the party fraudulently
induced into the lease or rental agreement and that party shall
receive any security deposit made pursuant to the lease or rental
agreement together with any accrued interest on the deposit.
2. Only during reasonable hours, and in a reasonable manner,
for the purpose of inspecting the premises; for making necessary
or agreed repairs, decorations, alterations, or improvements; for
supplying necessary or agreed services; or for exhibiting the
residential dwelling unit to actual or potential purchasers,
insurers, mortgagees, real estate agents, tenants, workmen, or
contractors. Unless it is impractical to do so the landlord shall
first notify and receive the consent of the tenant which shall not
be unreasonably withheld, which consent shall identify a time
certain. A landlord shall not abuse the right of access or use it
to harass or intimidate the tenant.
For the purposes of this section, consent shall be presumed
from failure to object to access after notice of intent to enter
at a time certain has been given. Notice may be given by personal
service, by posting the notice in a conspicuous place in or about
the dwelling unit for a reasonable period of time, or by any other
method which results in actual notice to the tenant. Sec.
Quiet possession of leased property: An agreement to
lease real property binds the lessor to secure to the lessee the
quiet possession of such property during the term of the lease
against all persons lawfully claiming the same. Sec. 47-16-08.
Ordinary care must be exercised by lessee: The lessee
of real property must use ordinary care to preserve such property in
safety and to keep it in good condition. Sec. 47-16-09.
Injuries to real property - Must be repaired by lessee:
The lessee of real property must repair all deteriorations or
injuries thereto occasioned by the lessee's ordinary negligence.
Use of real property for purpose leased - Violation:
When real property is leased for a particular purpose, the lessee
must not use it for any other purpose. If the lessee violates the
lease in this respect, the lessor may hold the lessee responsible
for the safety of the property during such use in all events or may
treat the contract as rescinded thereby. Sec. 47-16-11.
When lessee may repair or vacate premises: If within a
reasonable time after notice from the lessee of dilapidations which
the lessor ought to repair the lessor neglects to do so, the lessee
1. Repair the premises and deduct the expense of such repair
from the rent;
Landlord obligations - Maintenance of premises:
2. Recover it in any other lawful manner from the lessor; or
3. Vacate the premises, in which case the lessee shall be
discharged from further payment of rent or performance of other
conditions. Sec. 47-16-13.
1. A landlord of a residential dwelling unit shall:
Tenant obligations - Maintenance of dwelling unit: A
tenant of a residential dwelling unit shall:
a. Comply with the requirements of applicable building and
housing codes materially affecting health and safety.
2. In case of noncompliance with the requirements of
subdivisions b through f of subsection 1, a reasonable time shall
be allowed to remedy such noncompliance.
b. Make all repairs and do whatever is necessary to put and
keep the premises in a fit and habitable condition.
c. Keep all common areas of the premises in a clean and safe
d. Maintain in good and safe working order and condition all
electrical, plumbing, sanitary, heating, ventilating,
air-conditioning, and other facilities and appliances, including
elevators, supplied or required to be supplied by the landlord.
e. Provide and maintain appropriate receptacles and
conveniences for the removal of ashes, garbage, rubbish, and
other waste incidental to the occupancy of the dwelling unit and
arrange for their removal.
f. Supply running water and reasonable amounts of hot water
at all times and reasonable heat, except if the building that
includes the dwelling unit is not required by law to be equipped
for that purpose or if the dwelling unit is so constructed that
heat or hot water is generated by an installation within the
exclusive control of the tenant and supplied by a direct public
utility connection or if the water or heat is unavailable due to
supply failure by a public utility.
3. If the duty imposed by subdivision a of subsection 1 is
greater than any duty imposed by any other subdivision of that
subsection, the landlord's duty shall be determined by reference
to subdivision a of subsection 1.
4. The landlord and tenant of a single-family residence may
agree in writing that the tenant perform the landlord's duties
specified in subdivisions e and f of subsection 1 and also
specified repairs, maintenance tasks, alterations, and remodeling,
but only if the transaction is entered into in good faith.
5. The landlord and tenant of any dwelling unit other than a
single-family residence may agree that the tenant is to perform
specified repairs, maintenance tasks, alterations, or remodeling
a. The agreement of the parties is entered into in good
faith and is set forth in a separate writing signed by the
parties and supported by adequate consideration.
6. The landlord may not treat performance of the separate
agreement described in subsection 4 as a condition to any
obligation or performance of any rental agreement. Sec.
b. The work is not necessary to cure noncompliance with
subdivision e of subsection 1.
c. The agreement does not diminish or affect the obligation
of the landlord to other tenants in the premises.
1. Comply with all obligations primarily imposed upon tenants
by applicable provisions of building and housing codes materially
affecting health and safety.
2. Keep that part of the premises that the tenant occupies and
uses as clean and safe as the condition of the premises permit.
3. Periodically remove all ashes, garbage, rubbish, and other
waste from the tenant's dwelling unit, and dispose of them in a
clean and safe manner.
4. Keep all plumbing fixtures in the dwelling unit or used by
the tenant as clean as their condition permits.
5. Use in a reasonable manner all electrical, plumbing,
sanitary, heating, ventilating, air-conditioning, and other
facilities and appliances including elevators in the premises.
6. Not deliberately or negligently destroy, deface, damage,
impair, or remove any part of the premises or knowingly permit any
person to do so.
7. Conduct oneself and require other persons on the premises
with the tenant's consent to conduct themselves in a manner that
will not disturb the tenant's neighbors' peaceful enjoyment of the
premises. Sec. 47-16-13.2.
1. If a court of competent jurisdiction, as a matter of law,
Remedy after termination: If the rental agreement is
terminated, the landlord has a claim for possession and for rent and
a separate claim for actual damages for breach of the rental
agreement. Sec. 47-16-13.4.
a. A residential dwelling unit rental agreement or any
provision thereof was unconscionable when made, the court may
refuse to enforce the agreement, enforce the remainder of the
agreement without the unconscionable provision, or limit the
application of any unconscionable provision to avoid an
2. If unconscionability is put into issue by a party or by the
court upon its own motion, the parties shall be afforded a
reasonable opportunity to present evidence as to the setting,
purpose, and effect of the rental agreement or settlement to aid
the court in making the determination. Sec. 47-16-13.3.
b. A settlement in which a party waives or agrees to forego
a claim or right under sections 47-16-13.1 through 47-16-13.6 or
under a rental agreement was unconscionable when made, the court
may refuse to enforce the settlement, enforce the remainder of
the settlement without the unconscionable provision, or limit
the application of any unconscionable provision to avoid an
Mitigation of damages: Any party aggrieved under
sections 47-16-13.1 through 47-16-13.6 may recover appropriate
damages. However, the aggrieved party has a duty to mitigate
damages. Sec. 47-16-13.5.
Enforcement of sections 47-16-13.1 through 47-16-13.6:
Any right or action provided by sections 47-16-13.1 through
47-16-13.6 is enforceable by action and the court may award
reasonable attorney's fees to the prevailing party. Sec.
Eviction - Lessee liable for rent during term of lease:
A lessee evicted according to law is liable for rent during the
remainder of the term of the lease. However, this section does not
relieve the landlord of the duty to mitigate damages. Sec.
When a lease of real property terminates: The leasing
of real property terminates:
1. At the end of the term agreed upon;
Notice of termination of lease: A hiring of real property
for a term not specified by the parties is deemed to be renewed as
stated in section 47-16-06 at the end of the term implied by law,
unless one of the parties gives notice to the other of an intention
to terminate the lease, at least as long before the expiration of
the lease as the term of the hiring itself, not exceeding thirty
days. In tenancies from month to month, and unless the parties have
otherwise agreed in writing to a longer notice period or a different
notice time, either party may terminate the tenancy by giving at
least thirty days' written notice at any time. The rent is due and
payable to and including the date of termination. If a landlord
changes the terms of the lease pursuant to section 47-16-07, the
tenant may terminate the lease at the end of the month by giving at
least twenty-five days' notice. Sec. 47-16-15.
2. By the mutual consent of the parties;
3. By the lessee's acquiring title to the property leased
superior to that of the lessor; or
4. By the destruction of the property leased. Sec.
When lessor may terminate lease: The lessor of real
property may terminate the lease and reclaim such property before
the end of the term agreed upon when the lessee:
1. Uses or permits a use of the property leased in a manner
contrary to the agreement of the parties; or
When lessee may terminate lease: The lessee of real
property may terminate the lease before the end of the term agreed
2. Does not make such repairs as the lessee is bound to make
within a reasonable time after a request is made. Sec.
1. When the lessor does not fulfill the lessor's obligations,
if any, within a reasonable time after request, as to placing and
securing the lessee in the quiet possession of the property
leased, or putting it into a good condition, or repairing it; or
When lease of real property is terminated by death: Only
when the lease of real property is terminable at the pleasure of one
of the parties to the contract is it terminated by the notice to one
party of the death or incapacity of the other party to contract.
2. When the greater part of the property leased, or that part
which was, and which the lessor had reason to believe was, the
material inducement to the lessee to enter into the contract,
perishes from any cause other than the ordinary negligence of the
lessee. Sec. 47-16-17.
Term of lease governed by manner of payment of rent:
The renting of lodgings for an unspecified term is presumed to have
been made for such length of time as the parties adopt for the
estimation of the rent. Thus renting at a weekly rate of rent is
presumed to be for one week. In the absence of any agreement
respecting the length of time of the rent, the leasing is presumed
to be monthly. Sec. 47-16-19.
Rents - When payable: When there is no contract or
usage to the contrary, the rent of agricultural and wild land shall
be payable yearly at the end of each year. Rents of lodgings shall
be payable monthly at the end of each month. Other rents shall be
payable quarterly at the end of each quarter from the time the lease
takes effect. The rent for a lease shorter than the periods herein
specified shall be payable at the termination of the lease.
When proportionate part of lease paid by lessee: When
the leasing of real property is terminated before the time
originally agreed upon, the lessee must pay the due
proportion of the lease for such use as the lessee actually has
made of the property unless such use is merely nominal and of no
benefit to the lessee. Sec. 47-16-21.
Rent due upon lease for life - Recovery: Rent due upon
a lease for life may be recovered in the same manner as upon a lease
for years. Sec. 47-16-22.
Rent dependent on life of person - Collection after death.:
Rent dependent on the life of a person may be recovered after as
well as before that person's death. Sec. 47-16-23.
Notice of adverse proceedings to landlord: Every
tenant who receives notice of any proceeding to recover the real
property occupied by the tenant, or the possession thereof, must:
1. Inform the tenant's landlord immediately of the notice; and
The tenant shall be responsible to the landlord for all damages
which the landlord may sustain by reason of any omission by the
tenant to inform the landlord of the notice or to deliver it to the
landlord, if such notice is in writing. The attornment to a stranger
is void unless made with the consent of the landlord or in
consequence of a judgment of a court of competent jurisdiction.
2. Deliver the notice to the landlord.
Double letting of room prohibited: One who rents part
of a room for a dwelling is entitled to the whole of the room,
notwithstanding any agreement to the contrary. If a landlord rents a
room as a dwelling for more than one family, the person to whom the
landlord first rents any part of it is entitled to the possession of
the whole room for the term agreed upon. Every tenant in the
building under the same landlord is relieved from all obligation to
pay rent to the landlord while such double letting of any room
continues. Sec. 47-16-26.
Right of tenant: A tenant for years or at will, unless
the tenant is a wrongdoer by holding over, may:
1. Occupy the buildings.
The tenant has no rights to the property other than such as are
given the tenant by the agreement or instrument by which the
tenant's tenancy is acquired or by the provisions of this section.
2. Take the annual products of the soil.
3. Work mines and quarries open at the commencement of the
4. Cultivate and harvest the crops growing at the end of the
Succession to rights in real property or rent transfers:
A person to whom any real property is transferred or devised upon
which rent has been reserved, or to whom any such rent is
transferred, is entitled to the same remedies for recovery of rent,
for nonperformance of any of the terms of the lease or for any waste
or cause of forfeiture as that person's grantor or devisor might
have had. Sec. 47-16-28.
Remedies against assignees of lessor: Whatever
remedies the lessee of any real property may have against the
lessee's immediate lessor for the breach of any agreement in the
lease, the lessee may have against the assigns of the lessor. The
assigns of the lessee may have remedies against the lessor and the
lessor's assigns except upon covenants against encumbrances or
relating to the title or possession of the premises. Sec.
Remedies against assignees of lessee: Whatever
remedies the lessor of any real property has against the lessor's
immediate lessee for the breach of an agreement in the lease or for
recovery of the possession, the lessor also has against the
assignees of the lessee for any claim for relief accruing while they
are such assignees, except when the assignment is made by way of
security for a loan and is not accompanied by possession of the
premises. Sec. 47-16-30.
Abandoned property - Disposal by lessor: Property with
a total estimated value of not more than one thousand five hundred
dollars which is left on the premises of a leased dwelling thirty
days after the tenant has vacated the premises after the expiration
of the lease term may be retained by the lessor and disposed of
without legal process. The lessor is entitled to the proceeds from
the sale of the property. The lessor may recover, from the lessee's
security deposit, any storage and moving expenses in excess of the
proceeds from the sale incurred in disposing of the property. If the
lessor removes the abandoned property from the dwelling unit after a
judgment of eviction has been obtained and the special execution has
been served, the lessor has a lien upon the property for the
reasonable amount of any storage and moving expenses and may retain
possession of the property until the charges have been paid.
The lien does not have priority over a prior perfected
security interest in the property. Sec. 47-16-30.1.
Duty of lessee to have terminated or forfeited lease
released -Publication notice - Satisfaction of lease to be recorded
- Notice to real property owner -Remedies:
When any oil, gas, or other mineral lease given on real property
situated in any county of North Dakota and recorded therein
terminates or is forfeited it is the duty of the lessee, the
lessee's successors or assigns, within fifteen days after the date
of the termination or forfeiture of any lease, to have the lease
surrendered in writing, the surrender to be signed by the party
making the same, acknowledged, and placed on record in the county
where the leased real property is situated without cost to the owner
thereof. If the lessee, the lessee's successors or assigns, fails or
neglects to execute and record the surrender within the time
provided for, then the owner of the real property may serve upon the
lessee, the lessee's successors or assigns of record, in person or
by registered or certified mail, at the lessee's last known address,
or if the post-office address is not shown of record then by
publication once a week for three consecutive weeks in a newspaper
of general circulation in the county where the real property is
situated, a notice in writing in substantially the following form:
To ______________: I, the undersigned, owner of the following
described land situated in _____________ County, North Dakota:
(description of land) upon which a lease dated ______________,
______, was given to __________ notify you that the lease has
terminated or become forfeited by breach of the terms thereof, that
I elect to declare and do declare the lease forfeited and void and
that, unless you do, within twenty days from this date, notify the
register of deeds of the county as provided by law that the lease
has not been forfeited, I will file with the register of deeds a
satisfaction of lease as provided by law, and I demand that you
execute or have executed a proper surrender of the lease and that
you put the same of record in the office of the register of deeds of
the county within twenty days from this date.
Dated ______________, ______.
The owner of the real property may after twenty days from the
date of service, registration, or first publication of the notice,
file with the register of deeds of the county where the real
property is situated a satisfaction of lease setting forth that the
affiant is the owner of the real property, that the lease has
terminated or that the lessee, or the lessee's successors or
assigns, has failed or neglected to comply with the terms of the
lease, reciting the facts constituting the
failure and that the same has been forfeited and is void, and
setting out in satisfaction of lease a copy of the notice served, as
above provided and the manner and time of the service thereof. If
the lessee, the lessee's successors or assigns, gives notice in
writing within twenty days after service to the register of deeds of
the county where the real property is located that the lease has not
been forfeited and that the lessee, the lessee's successors or
assigns, still claim that the lease is in full force and effect,
then the satisfaction of lease may not be recorded but the register
of deeds shall notify the owner of the real property of the action
of the lessee, the lessee's successors or assigns, and the owner of
the real property is entitled to the remedies now provided by law
for the cancellation of the disputed lease. If the lessee, the
lessee's successors or assigns, fails to notify the register of
deeds, as above provided, then the register of deeds shall record
the satisfaction of lease and thereafter the record of the lease is
not notice to the public of the existence of the lease or of any
interest therein, or rights thereunder, and the record may not be
received in evidence in any court of the state on behalf of the
lessee, the lessee's successors or assigns, against the lessor, the
lessor's successors or assigns. Sec. 47-16-36.
Action to obtain release - Damages, costs, and attorney's
Should the owner of such lease neglect or refuse to execute a
release, then the owner of the leased premises may sue in any court
of competent jurisdiction to obtain such release, and may also
recover in such action of the lessee, the lessee's successors or
assigns, the sum of one hundred dollars as damages, and all costs,
together with a reasonable attorney's fee for preparing and
prosecuting the suit, and may also recover any additional damages
that the evidence in the case will warrant. In all such actions,
writs of attachment may issue as in other cases. Sec.
Surrender of lease by lessee: Any oil and gas or
mining lease that has been or may hereafter be recorded in the
office of the register of deeds of any county may be discharged and
canceled of record by the recording of a certificate of cancellation
signed by the lessee or the lessee's assigns of record, or the
lessee's duly authorized attorney in fact or personal
representative, including a foreign executor or administrator, or a
corporation or limited liability company by its duly authorized
officers or managers surrendering all of the lessee's right, title,
and interest in and to said lease, which certificate shall be
acknowledged as prescribed by law. Sec. 47-16-38.
Record of surrender: The certificate of cancellation
mentioned in section 47-16-38 shall be recorded at length and shall
be noted on the margin of the record of the lease. Sec.
Obligation to pay royalties - Breach: The obligation
arising under an oil and gas lease to pay oil or gas royalties to
the mineral owner or the mineral owner's assignee, or to deliver oil
or gas to a purchaser to the credit of the mineral owner or the
mineral owner's assignee, or to pay the market value thereof is of
the essence in the lease contract, and breach of the obligation may
constitute grounds for the cancellation of the lease in cases where
it is determined by the court that the equities of the case require
cancellation. If the operator under an oil and gas lease fails to
pay oil or gas royalties to the mineral owner or the mineral owner's
assignee within one hundred fifty days after oil or gas produced
under the lease is marketed and cancellation of the lease is not
sought, the unpaid royalties shall thereafter bear interest
calculated at the rate of eighteen percent per annum until paid,
except that the commissioner of university and school lands may
negotiate a rate to be no less than the prime rate as established by
the Bank of North Dakota plus four percent per annum with a maximum
of eighteen percent per annum, for unpaid royalties on minerals
owned or managed by the board of university and school lands.
Provided, that the operator may remit semiannually to a person
entitled to royalties the aggregate of six months' monthly royalties
where the aggregate amount is less than fifty dollars. The district
court for the county in which the oil or gas well is located has
jurisdiction over all proceedings brought pursuant to this section.
The prevailing party in any proceeding brought pursuant to this
section is entitled to recover any court costs and reasonable
This section does not apply when mineral owners or their
assignees elect to take their proportionate share of production in
kind, or in the event of a dispute of title existing that would
affect distribution of royalty payments.
47-16-39.2. Inspection of production and royalty payment
records. A royalty owner, a royalty owner's assignee, or a
designated representative, upon written notice, is entitled to
inspect and copy the oil and gas production and royalty payment
records for the lease of the person obligated to pay royalties under
the lease or division order. The person obligated to pay royalties
under the lease shall make that person's oil and gas royalty payment
and production records available for inspection and copying at that
person's usual and customary place of business within the United
States. A royalty owner may bring an action to compel the person
obligated to pay royalties to allow inspection and copying of oil
and gas production royalty payment records. In order for the royalty
owner to prevail in such an action, the royalty owner must establish
1. The royalty owner or the royalty owner's assignee complied
with notice requirements of this section;
The district court for the county in which the oil or gas well
is located has jurisdiction over all proceedings brought pursuant to
this section. If the royalty owner or the royalty owner's assignee
is successful in any proceeding brought pursuant to this section,
the district court shall allow the royalty owner or the royalty
owner's assignee to recover court costs; reasonable costs, fees,
disbursements, and expenses incurred by the royalty owner or the
royalty owner's assignee or a designated representative in
inspecting and copying the oil and gas production and royalty
payment records of the person obligated to pay royalties under the
lease; and reasonable attorney's fees. Sec. 47-16-39.1.
2. The notice specified the lease involved, the time period
under review and the records requested;
3. The royalty owner notified the person obligated to pay
royalties at the address printed on the information statement as
prescribed by rules adopted by the industrial commission pursuant
to section 38-08-06.3; and
4. The person obligated to pay royalties denied inspection of
the records or failed to respond within thirty days of service of
Division orders - Definition, function, and operation:
A division order is an instrument executed by the operator, the
royalty owners, and any other person having an interest in the
production directing the purchaser of oil or gas to pay for the
products taken in the proportions set out in the instrument. Royalty
payments may not be withheld because an interest owner has not
executed a division order. A division order may not alter or amend
the terms of the oil and gas lease. A division order that varies the
terms of the oil and gas lease is invalid to the extent of the
variance and the terms of the oil and gas lease take precedence.
Record of lease as notice for definite term - Extension
upon contingency - Affidavit: When an oil, gas, or mineral lease
is hereafter given on land situated within the state of North
Dakota, the recording thereof in the office of the register of deeds
of the county in which the land is located shall impart notice to
the public of the validity and continuance of said lease for the
definite term therein expressed, but no longer. If such lease
contains the statement of any contingency upon the happening of
which the term of any such lease may be extended, such as, and as
much longer as oil and gas or either are produced in paying
quantities, the owner of said lease may at any time before the
expiration of the definite term of said lease file with said
register of deeds an affidavit setting forth the description of the
lease, that the affiant is the owner thereof and the facts showing
that the required contingency has happened. This affidavit shall be
recorded in full by the register of deeds, and such record together
with that of the lease shall be due notice to the public of the
existence and continuing validity of said lease, until the same
shall be forfeited, canceled, set aside, or surrendered according to
law. Sec. 47-16-40.
Demand for release before bringing action - Evidence:
At least twenty days before bringing the action provided for in
section 47-16-37, the owner of the leased land, either personally or
by the owner's agent or attorney, shall demand of the holder of the
lease, if such demand by ordinary diligence can be made in this
state, that said lease be released of record. Such demand may be
either written or oral. When written, a carbon or written copy
thereof, when shown to be such, may be used as evidence in any court
with the same force and effect as the original. Sec. 47-16-41.
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