Quick answer
Main statute: Natural Resources and Environmental Protection Act, Part 615, MCL 324.61503a to 324.61503c (gas lease payments and statements).
| Topic | What the statute says | Citation |
|---|---|---|
| First payment deadline | Gas leases: promptly after divisions of interest are determined (no fixed days) | MCL 324.61503a(2) |
| Later payments | Gas leases: monthly statements and payments (no fixed day) | MCL 324.61503a(1)(a); MCL 324.61503a(1)(a)(i) |
| Minimum payment and aggregation | Gas lessee may defer until royalties total $50.00 | MCL 324.61503a(2) |
| Interest on late payments | No statute found | — |
| Suspense and withheld payments | Gas lessee may defer for title questions or an unknown address | MCL 324.61503a(2); MCL 324.61503b(4)(d) |
| Division orders | Does not alter the lease unless both parties agree in a signed document | MCL 324.61503b(4); MCL 324.61503b(4)(f) |
| Owner remedies, notice and attorney fees | Written notice and 30 days to cure before suit | MCL 324.61503c(1); MCL 324.61503c(2); MCL 324.61503c(5); MCL 324.61503c(4); MCL 324.61503c(3) |
| Check-stub disclosures | Gas leases: monthly plain-English statement with unit price and itemized deductions | MCL 324.61503a(1)(a)(i); MCL 324.61503a(1)(a)(ii); MCL 324.61503a(1)(b); MCL 324.61503b(3) |
| Unclaimed royalties (escheat) | No royalty-specific period found; 3 years (5 for active-duty military owners) for business-held property | MCL 567.237a; MCL 567.223(1); MCL 567.222(k)(i); MCL 567.224a(1); MCL 567.222(a) |
For gas leases, monthly revenue statements and payments must be initiated promptly after the divisions of interest are determined, unless a valid lessor-lessee agreement provides otherwise. The statute sets no fixed number of days.
Monthly revenue statements and payments must be initiated promptly after the determination of the divisions of interest of the parties entitled to share in production, unless a valid agreement between lessee and lessor provides otherwise. (MCL 324.61503a(2))
Statute text “the monthly revenue statements and payments under subsection (1)(a) shall be initiated promptly after the determination of the divisions of interest of the parties entitled to share in the production, unless a valid agreement between the lessee and the lessor provides otherwise”
The gas-lease statute requires monthly revenue statements to the lessor and refers to 'monthly revenue statements and payments'; it states no day-of-month deadline for ongoing payments.
A gas lessee must provide the lessor with monthly revenue statements, starting after production begins, and must pay the lessor his or her proper share of the gross proceeds or value as provided in the lease. (MCL 324.61503a(1)(a))
Statute text “provide the lessor who has an interest in the leased property with monthly revenue statements written in plain English that provide all of the following”
The lessee shall pay the lessor his or her proper share of the gross proceeds or value, as provided in the lease. (MCL 324.61503a(1)(a)(i))
Statute text “The lessee shall pay to the lessor his or her proper share of the gross proceeds or value, as provided in the lease.”
If total royalties are less than $50.00 at the end of any month, the gas lessee may defer payment until the total reaches at least $50.00, unless a valid lessor-lessee agreement provides otherwise.
Payment may be deferred while total royalties are under $50.00 at month-end, until the total reaches at least $50.00, unless a valid agreement provides otherwise. (MCL 324.61503a(2))
Statute text “If the total amount of the royalties is less than $50.00 at the end of any month, payment may be deferred until the total amount reaches at least $50.00, unless a valid agreement between the lessor and the lessee provides otherwise.”
We found no Michigan statute setting interest on late oil or gas royalty payments.
What we read: Read MCL 324.61503a, 324.61503b and 324.61503c in full and the section titles of all of NREPA Part 615 (MCL 324.61501-324.61527); none provides interest on late royalty payments. A government-source search of Michigan law (legislature.mi.gov) for oil and gas royalty late-payment interest returned no other provision. Sources read: MCL 324.61503a (Natural Resources and Environmental Protection Act, Part 615) - Gas lease; monthly revenue statements and payments; deferment (MCL complete through PA 114 of 2026); MCL 324.61503b - Postproduction costs; division orders (MCL complete through PA 114 of 2026); MCL 324.61503c - Violation of 61503a or 61503b; civil fine; action; notice and cure (MCL complete through PA 114 of 2026); MCL Part 615 (Supervisor of Wells) section index.
A gas lessee may defer payment when the lessor's entitlement is in question because of lack of good and marketable record title or any circumstance exposing the lessee to multiple or third-party liability, and when the lessor's mailing address is unknown. A division order may authorize suspension pending a title dispute or adverse claim. The statute says nothing about interest on deferred funds.
The lessee may defer payment until resolved if the lessor's entitlement is in question for lack of good and marketable record title or any circumstance exposing the lessee to multiple liability or liability to a third party. (MCL 324.61503a(2))
Statute text “if the entitlement of the lessor to receive payment is in question because of lack of good and marketable record title or because of any circumstance that may expose the lessee to the risk of multiple liability or liability to a third party if the payment is made, the lessee may defer payment to that lessor until the title or other circumstance has been resolved”
If the lessor's mailing address or place of payment is unknown, payment may be deferred until the lessee receives that information. (MCL 324.61503a(2))
Statute text “If the mailing address of the lessor, or place where payment should be made, is unknown, payment may be deferred until the lessee receives that information.”
A statutory division order may contain an authorization to suspend payment until resolution of any title dispute or adverse claim. (MCL 324.61503b(4)(d))
Statute text “The authorization to suspend payment to the payee for production until the resolution of any title dispute or adverse claim asserted regarding the interest in production claimed by the payee.”
A division order does not alter or define lease terms unless both parties expressly agree in a signed document to amend the lease. A lessee may not precondition royalty payment on signing a division order except that, for non-state leases, a payor is entitled to a signed division order containing only the listed provisions (effective date, property description, interest claimed and title certification, suspension authorization for title disputes, payee name/address/TIN, and a statement that it does not amend the lease).
A division order or similar document does not alter or define lease terms unless voluntarily and explicitly agreed to by both parties in a signed document expressing intent to amend the lease. (MCL 324.61503b(4))
Statute text “A division order or other document that includes provisions that stipulate how production proceeds are distributed, received by the lessor from the lessee, shall not alter or define the terms of a lease unless voluntarily and explicitly agreed to by both parties in a signed document or documents in which the parties expressly indicate their intention to amend the lease.”
A lessee may not precondition royalty payment on the lessor signing a division order, except as the subsection provides. (MCL 324.61503b(4))
Statute text “A lessee shall not precondition the payment of royalties upon the lessor signing a division order or other document that stipulates how production proceeds are distributed, except as provided in this subsection.”
For leases other than state of Michigan leases, a lessee or payor is entitled to a signed division order containing only the listed provisions, unless other provisions are voluntarily and explicitly agreed in a signed document. (MCL 324.61503b(4))
Statute text “As a condition for the payment of royalties under a lease other than a lease granted by the state of Michigan, a lessee or other payor shall be entitled to receive a signed division order from the payee containing only the following provisions”
One required provision is a statement that the division order does not amend any lease or operating agreement or purchase contract. (MCL 324.61503b(4)(f))
Statute text “A statement that the division order does not amend any lease or operating agreement between the interest owner and the lessee or operator or any other contracts for the purchase of oil or gas.”
A lessor of a gas lease (or the attorney general) may sue in circuit court for injunctive relief or damages for violations of MCL 324.61503a or 61503b, but only after giving the lessee written notice with reasonably comprehensive details and at least 30 days to cure. Knowing violations carry a civil fine of up to $1,000. Recovery of improperly deducted postproduction costs may include reasonable attorney fees unless the lessee tried to cure before suit.
A person who knowingly violates section 61503a or 61503b is responsible for a civil fine of not more than $1,000.00. (MCL 324.61503c(1))
Statute text “a person who knowingly violates section 61503a or 61503b is responsible for the payment of a civil fine of not more than $1,000.00”
The attorney general or the lessor of a gas lease may bring a circuit-court action for injunctive relief or damages, or both. (MCL 324.61503c(2))
Statute text “The attorney general or the lessor of a gas lease with respect to his or her lease may bring an action in circuit court for injunctive relief or damages, or both, against a person who violates section 61503a or 61503b.”
No action may be brought without first giving the lessee written notice with reasonably comprehensive details and at least 30 days to cure. (MCL 324.61503c(5))
Statute text “A person shall not bring an action under this section unless the person has first given the lessee written notice of the alleged violation of section 61503a or 61503b, with reasonably comprehensive details, and allowed a period of at least 30 days for the lessee to cure the alleged violation.”
For postproduction costs deducted contrary to 61503b(1), the lessor may recover the amount deducted and reasonable attorney fees, unless the lessee endeavored to cure before suit; a prevailing lessee may recover fees if the lessor's position was frivolous. (MCL 324.61503c(4))
Statute text “the lessor may recover as damages the amount of postproduction costs deducted contrary to section 61503b(1) and may also recover reasonable attorney fees incurred in bringing the action unless the lessee endeavored to cure the alleged violation pursuant to subsection (5) prior to the bringing of the action”
A continuing violation is a separate offense each day only for 5 days, and a violation affecting multiple lessors in the same well or unit is one offense. (MCL 324.61503c(3))
Statute text “each day the violation continues constitutes a separate offense only for 5 days; thereafter, each day the violation continues does not constitute a separate offense”
Monthly revenue statements to gas lessors must be in plain English and show, under the heading 'unit price', the price received per 1,000 cubic feet or 1,000,000 BTUs, plus an itemized statement of deductions and their purpose (deductions may be grouped by category if an itemized statement is offered on written request). The lessee must also prepare an annual accounting within 180 days after year-end and furnish it within 30 days of a request. Where postproduction costs are charged, the lessee must notify the lessor of the availability of an itemized explanation.
Each monthly revenue statement must show, under the heading 'unit price', the price received per 1,000 cubic feet or 1,000,000 BTUs of gas sold. (MCL 324.61503a(1)(a)(i))
Statute text “Under the heading "unit price", the price received by the lessee per 1,000 cubic feet or 1,000,000 BTUs of gas sold.”
The statement must show the deductions taken from royalty and their purpose, itemized, though deductions may be grouped by general category if a separate itemized statement is offered on written request with the address for requests. (MCL 324.61503a(1)(a)(ii))
Statute text “A statement of the deductions taken from the lessor's royalty, and the purpose of those deductions. The statement of the deductions shall be itemized, except that a lessee may group deductions under general categories if the lessee states that a separate itemized statement of the deductions will be furnished upon written request”
The lessee must notify the lessor of the availability of an annual accounting within 180 days after year-end and furnish a copy within 30 days of a request. (MCL 324.61503a(1)(b))
Statute text “The lessee shall notify the lessor of the availability of the accounting within 180 days after the end of the calendar year or other 12-month accounting period, and shall furnish a copy of the accounting upon request of the lessor within 30 days of receipt of the request.”
If postproduction costs are charged, the lessee must notify the lessor in writing that an itemized explanation is available and provide it on written request. (MCL 324.61503b(3))
Statute text “the lessee shall notify the lessor in writing of the availability of the following information and if the lessor requests in writing to receive this information, the lessee shall provide the lessor, in writing, a specific itemized explanation of all postproduction costs to be assessed”
Michigan's Uniform Unclaimed Property Act has no royalty-specific dormancy period that we found; the general rule presumes property held or owing in the ordinary course of business abandoned if unclaimed for more than 3 years after it becomes payable or distributable, or 5 years if the owner is on active duty military service or in the reserve component on active orders. Property worth $25.00 or less is generally not subject to state custody. The administrator is the state treasurer.
The dormancy period in section 3(1) and the other listed sections is 5 years if the owner is on active duty military service or in the reserve component on active orders. (MCL 567.237a)
Statute text “The dormancy period described in sections 3(1), 5(2), 6(1), 7(1) and (5), 8(1), 13(1), 15(1), and 17 is 5 years if the owner of the property is on active duty military service or in the reserve component on active orders.”
Property held, issued, or owing in the ordinary course of a holder's business that remains unclaimed for more than 3 years after it becomes payable or distributable is presumed abandoned. (MCL 567.223(1))
Statute text “all property, including any income or increment derived from the property, less any lawful charges, that is held, issued, or owing in the ordinary course of a holder's business and remains unclaimed by the owner for more than 3 years after it becomes payable or distributable is presumed abandoned”
Intangible property includes money, checks, drafts, deposits, interest, dividends, and income. (MCL 567.222(k)(i))
Statute text “Money, checks, drafts, deposits, interest, dividends, and income.”
Property valued at $25.00 or less is generally not subject to state custody as unclaimed property. (MCL 567.224a(1))
Statute text “property is not subject to the custody of this state as unclaimed property if its value is $25.00 or less”
The administrator of the act is the state treasurer. (MCL 567.222(a))
Statute text “"Administrator" means the state treasurer.”
Official unclaimed property search: Michigan Department of Treasury unclaimed property.
For gas leases, monthly revenue statements and payments must be initiated promptly after the divisions of interest are determined, unless a valid lessor-lessee agreement provides otherwise. The statute sets no fixed number of days. (MCL 324.61503a(2))
The gas-lease statute requires monthly revenue statements to the lessor and refers to 'monthly revenue statements and payments'; it states no day-of-month deadline for ongoing payments. (MCL 324.61503a(1)(a); MCL 324.61503a(1)(a)(i))
If total royalties are less than $50.00 at the end of any month, the gas lessee may defer payment until the total reaches at least $50.00, unless a valid lessor-lessee agreement provides otherwise. (MCL 324.61503a(2))
We found no Michigan statute setting interest on late oil or gas royalty payments.
A gas lessee may defer payment when the lessor's entitlement is in question because of lack of good and marketable record title or any circumstance exposing the lessee to multiple or third-party liability, and when the lessor's mailing address is unknown. A division order may authorize suspension pending a title dispute or adverse claim. The statute says nothing about interest on deferred funds. (MCL 324.61503a(2); MCL 324.61503b(4)(d))
A division order does not alter or define lease terms unless both parties expressly agree in a signed document to amend the lease. A lessee may not precondition royalty payment on signing a division order except that, for non-state leases, a payor is entitled to a signed division order containing only the listed provisions (effective date, property description, interest claimed and title certification, suspension authorization for title disputes, payee name/address/TIN, and a statement that it does not amend the lease). (MCL 324.61503b(4); MCL 324.61503b(4)(f))
A lessor of a gas lease (or the attorney general) may sue in circuit court for injunctive relief or damages for violations of MCL 324.61503a or 61503b, but only after giving the lessee written notice with reasonably comprehensive details and at least 30 days to cure. Knowing violations carry a civil fine of up to $1,000. Recovery of improperly deducted postproduction costs may include reasonable attorney fees unless the lessee tried to cure before suit. (MCL 324.61503c(1); MCL 324.61503c(2); MCL 324.61503c(5); MCL 324.61503c(4); MCL 324.61503c(3))
Monthly revenue statements to gas lessors must be in plain English and show, under the heading 'unit price', the price received per 1,000 cubic feet or 1,000,000 BTUs, plus an itemized statement of deductions and their purpose (deductions may be grouped by category if an itemized statement is offered on written request). The lessee must also prepare an annual accounting within 180 days after year-end and furnish it within 30 days of a request. Where postproduction costs are charged, the lessee must notify the lessor of the availability of an itemized explanation. (MCL 324.61503a(1)(a)(i); MCL 324.61503a(1)(a)(ii); MCL 324.61503a(1)(b); MCL 324.61503b(3))
Michigan's Uniform Unclaimed Property Act has no royalty-specific dormancy period that we found; the general rule presumes property held or owing in the ordinary course of business abandoned if unclaimed for more than 3 years after it becomes payable or distributable, or 5 years if the owner is on active duty military service or in the reserve component on active orders. Property worth $25.00 or less is generally not subject to state custody. The administrator is the state treasurer. (MCL 567.237a; MCL 567.223(1); MCL 567.222(k)(i); MCL 567.224a(1); MCL 567.222(a))
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Educational only — not legal advice; statutes change, so confirm the current version and consult a qualified attorney for your situation. For a question about a specific payment, consult an attorney licensed in Michigan.
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