# The Michigan Mineral Owner's Guide | Berlin Royalties > A free plain-English guide for Michigan mineral owners: deductions, payment deadlines, forced pooling, severance and income tax, whether you can lose your minerals, and ten questions for any buyer. Source: https://www.berlinroyalties.com/guide/michigan/ Publisher: Berlin Royalties, a veteran-owned oil and gas mineral and royalty buyer in Tulsa, Oklahoma, buying for its own account since 2014. Call or text 918-984-1645. License: free to quote and cite with attribution to Berlin Royalties and a link to the source URL. Mineral Owner's Guide ยท Michigan ## The Michigan mineral owner's guide. Michigan can take your minerals away after 20 years, and this gets reported wrong online more than any other Michigan fact. Michigan also has the strongest statutory protection against deductions in the country, if your lease is new enough. [What Are Mine Worth?](https://www.berlinroyalties.com/free-valuation/) [Ask a Landman, Free](https://www.berlinroyalties.com/ask-a-landman/) This is the whole guide, on one page, free, with nothing gated. It covers what you own, the Michigan law that decides what lands in your bank account, whether your minerals can be taken from you, what happens if a well is drilled and you are not leased, what you owe when you sell, and the questions worth asking any buyer including us. ## 1. What you actually own Almost every confusing thing in oil and gas comes from the fact that the mineral estate is not one thing. It is a bundle of five rights that can be split apart and sold separately: - The right to **develop**, including surface access - The right to **lease**, called the executive right - The right to receive **bonus** - The right to receive **delay rentals** - The right to receive **royalty** A **mineral interest** is all five. A **non-participating royalty interest** is only the fifth, with no say in leasing and no share of bonus. An **overriding royalty interest** is carved out of a particular lease and dies when that lease dies. A **working interest** takes revenue net of costs and, unlike all of the above, can lose you money. Which one you hold changes the value, the tax treatment, and who has to sign what. Start here: [NPRIs](https://www.berlinroyalties.com/non-participating-royalty-interest/), [overriding royalties](https://www.berlinroyalties.com/overriding-royalty-interest/), and the [glossary](https://www.berlinroyalties.com/glossary/). ## 2. Can money be taken out of your Michigan check? It depends entirely on your **lease date**, and the cutoff is **March 28, 2000**. Under **MCL 324.61503b**, for leases entered into as lessee after that date, the lessee **shall not deduct any post production costs unless the lease explicitly allows it**. Silence means no deductions. Even where allowed, only removal of CO2, H2S, nitrogen or other constituents other than water, plus specified transportation, may come off. For pre-2000 leases, *Schroeder v. Terra Energy, Ltd.*, 565 N.W.2d 887 (Mich. 1997) governs and a producer could deduct everything. **MCL 324.61503c** lets a wronged lessor recover the amount wrongly deducted **plus reasonable attorney fees**. Your first move if the deductions look wrong is a written demand by certified mail, keeping the receipt, because the certification is what starts the clock. Our [free letter templates](https://www.berlinroyalties.com/letter-templates/) have the wording and the [statement decoder](https://www.berlinroyalties.com/royalty-statement-decoder/) explains every line on the stub. ## 3. When Michigan has to pay you MCL 324.61503a requires monthly revenue statements and payments from gas lease lessees. | **Minimum payment rule** | Not set by statute. || **Time limit to sue over an underpayment** | Governed by general contract limitations | A stopped check very often is not a stopped well. The usual causes are a balance under the minimum threshold, a title change putting the interest in suspense, an unprobated death in the chain, an address the payor could not deliver to, or a change of payor after an acquisition. That money does not disappear; it sits in suspense and eventually goes to state unclaimed property. See [unclaimed royalties](https://www.berlinroyalties.com/unclaimed-royalties/). ## 4. Can you lose your Michigan minerals? **Yes, and it is real.** The **Michigan Dormant Minerals Act, MCL 554.291 et seq.**, deems an oil or gas interest abandoned if for **20 years** it was not sold, leased, mortgaged or transferred by recorded instrument and there was no drilling permit, no production from the property or a unit including it, and no use for underground gas storage. On abandonment it vests in the surface owner. Upheld in *Van Slooten v. Larsen*, 410 Mich. 21 (1980). Preserve it by recording a claim of interest at least every 20 years, which also protects against foreclosure for the **surface owner's** unpaid taxes under MCL 554.291(3). The Act reaches **NPRIs** too. ## 5. If they drill and you are not leased Exists but is weak and rarely used. **MCL 324.61513(4)** permits pooling after a hearing before the Supervisor of Wells, with challenges going to Ingham County Circuit Court. Notably **MCL 324.61513a** provides the Supervisor shall not require pooling of state owned properties in certain circumstances, so **Michigan exempts its own minerals**. There is a separate judicial route at MCL 319.101 et seq. We do not publish a nonconsent penalty for Michigan because Part 615 does not set one. The reason any of this exists is the [rule of capture](https://www.berlinroyalties.com/rule-of-capture/): a well on the tract next to yours can legally drain oil and gas from under your land, and you cannot sue anyone for it. Pooling is what converts being drained into having a share. The expensive mistake is almost never the pooling itself. It is missing the election deadline, which turns a real choice into a default nobody picked. ## 6. What Michigan takes **Severance tax.** 6.6 percent of gross cash market value on oil and condensate, 4 percent for marginal or stripper oil wells, and 5 percent on gas, NGLs and condensate, plus an oil and gas surveillance fee of up to 1 percent (1.00 percent in 2026). Michigan also imposes county ad valorem property tax on producing minerals. **When you sell.** Flat **4.25 percent**, and Michigan sources gain on the sale of real property to the state where the property sits, so gain on Michigan minerals is Michigan source and taxable to a nonresident. **No withholding at closing.** Some Michigan cities levy local income taxes. No state estate or inheritance tax. See [taxes when you sell mineral rights](https://www.berlinroyalties.com/mineral-rights-capital-gains-tax/), and if you inherited the interest, understand the **stepped-up basis** before you sell anything: your basis is generally the value at the date of death, not what your grandparents paid, which frequently means far less taxable gain than owners expect. ## 7. Inherited minerals and probate in Michigan Michigan is a Uniform Probate Code state. **The Dormant Minerals Act interacts with probate in a way owners miss:** an interest sitting in a decedent's name for 20 years with no recorded instrument, permit, production or storage use is abandoned. Probate delay in Michigan is not an inconvenience, it is a mechanism of loss. The single most common thing we see is an interest still sitting in the name of someone who died twenty or forty years ago. It is fixable, it is cheaper to fix than to leave, and we pay for the curative work as part of a purchase. See [inherited mineral rights](https://www.berlinroyalties.com/inherited-mineral-rights/), [selling before probate is done](https://www.berlinroyalties.com/sell-inherited-minerals-probate/), and [transferring inherited minerals](https://www.berlinroyalties.com/transfer-inherited-minerals/). ## 8. Where the Michigan records are EGLE's Geologic Resources Management Division, with the free Data Explorer and GeoWebFace. **One trap: Michigan's Wellogic system covers water wells, not oil and gas**, and owners land there constantly. Land records are with the Register of Deeds in each of 83 counties. Our [well records by state](https://www.berlinroyalties.com/well-records/) page links every state's free public search, and our [operator directory](https://www.berlinroyalties.com/operators/) covers more than 38,000 operators with contact information refreshed weekly. ## 9. How valuation actually works Producing royalties are priced off cash flow and decline. Non-producing minerals are priced off location and activity. Almost every offer you receive is built the same way: take your last twelve months of royalty income and apply a multiple. That method has one predictable failure, and it is worth understanding because it is where most owners lose money. **It assigns a value of zero to anything that has not happened yet.** A permit next door. An undrilled bench under your section. A refrac on an old wellbore. A unit being formed. None of that is in last year's income, so none of it is in the offer. Ask any buyer, including us, to show you their remaining location count and the reasoning behind it. If they will not break it out, they are pricing your check rather than your minerals. See [how mineral rights are valued](https://www.berlinroyalties.com/mineral-rights-value/). ## 10. Ten questions to ask any buyer - Are you buying for your own account, or brokering this to someone else? - What entity will appear on the deed, and can I look it up? - Show me your valuation. What did you assume for price, decline, and remaining locations? - How many undrilled locations did you count, and at what probability? - Who pays title work, document preparation, and recording? - Is there a minimum interest size, and are you buying part of what I own or all of it? - How long is this offer open, and what happens if I say no? - Will you tell me if you think I should keep it? - Is there money sitting in suspense on this interest, and who keeps it? - Who at your company will answer the phone in six months? You are welcome to use every one of these on us. That is the point of publishing them. ### Send us what you have. We will tell you what it is. A check stub, an old deed, a division order, a pooling order, or just the county. We will identify the interest, value it with the arithmetic shown, and tell you honestly if you should keep it. Free, no obligation, and no mailing list. [Get a Free Valuation](https://www.berlinroyalties.com/free-valuation/) [Ask a Landman](https://www.berlinroyalties.com/ask-a-landman/) ## More on Michigan - [Selling mineral rights in Michigan](https://www.berlinroyalties.com/michigan/), with the full state detail - [Royalty payment laws by state](https://www.berlinroyalties.com/royalty-payment-laws/), with statutory citations - [Division orders: what to check before you sign](https://www.berlinroyalties.com/division-order/) - [Compare your options before selling](https://www.berlinroyalties.com/compare-selling-options/) and [when not to sell](https://www.berlinroyalties.com/when-not-to-sell/) - [Got an offer letter?](https://www.berlinroyalties.com/got-an-offer/) and [before you sign](https://www.berlinroyalties.com/before-you-sign/) - [Owner's guides for the other states we buy in](https://www.berlinroyalties.com/guide/) Last reviewed August 2026. Statutes, rates, and case law change, and where Michigan law is genuinely unsettled we have said so rather than filling the gap. Berlin Royalties is a mineral buyer and a landman shop in Tulsa, not a law firm or a tax advisor, and this guide is general information rather than advice about your interest. For a dispute worth real money, hire a lawyer in Michigan.