Residential Rental Lease Agreement
CHAPTER 47-16
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. 47-16-01.
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. Sec. 47-16-03.
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. 47-16-06.1.
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 and
requirements:
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 hundred dollars.
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.
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.
3. A lessor is liable for treble damages for any security deposit money
withheld without reasonable justification.
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
deposit.
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.
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.
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.
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. 47-16-07.3.
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. Sec. 47-16-07.4.
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. Sec. 47-16-10.
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 may:
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.
Landlord obligations - Maintenance of premises:
1. A landlord of a residential dwelling unit shall:
a. Comply with the requirements of applicable building
and housing codes materially affecting health and safety.
b. Make all repairs and do whatever is necessary to put and keep
the premises in a fit and habitable condition.
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.
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.
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 only if:
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.
c. The agreement does not diminish or affect the obligation of
the landlord to other tenants in the premises.
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. 47-16-13.1.
Tenant obligations - Maintenance of dwelling unit:
A tenant of a residential dwelling unit shall:
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.
Unconscionability:
1. If a court of competent jurisdiction, as a matter of
law, finds:
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 unconscionable result.
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 that 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 unconscionable result.
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.
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.
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. 47-16-13.6.
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. 47-16-13.7.
When a lease of real property terminates:
The leasing of real property terminates:
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.
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
2. Does not make such repairs as the lessee is bound to make within
a reasonable time after a request is made. Sec. 47-16-16.
When lessee may terminate lease:
The lessee of real property may terminate the lease before the end of the term agreed upon:
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
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.
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. Sec. 47-16-18.
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. Sec. 47-16-20.
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:
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. Sec. 47-16-25.
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:
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. Sec. 47-16-27.
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. 47-16-29.
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 fees
-Attachment:
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. 47-16-37.
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. 47-16-39.
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 attorney's fees.
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 that:
1. The royalty owner or the royalty owner's assignee complied
with notice requirements of this section;
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 notice.
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.
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.
Sec. 47-16-39.3.
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.
