• Dayna Morgan & Breanne Ramsay

Major Changes to Alberta Crown Sales Disrupts Industry

Industry is scrambling to determine how to move forward with maintaining their confidential mineral land rights. In response to AB Energy’s Information Bulletin 2018-02, Land Service companies and producers are forced to rethink who and how Crown mineral agreements are held. Recently, one of the long-standing Land Service companies in Calgary announced they will be discontinuing Crown Sales throughout Canada due to the implications of regulatory changes.

AB Energy has confirmed this Bulletin is in response to alignment of procedures across commodities combined with the economic downturn and increase in number of receiverships. The Bulletin outlines should a Lessee go into Rental Default on an agreement, the Crown may refuse to issue future agreements, refuse to register or transfer agreements, or cancel the agreement. The Crown does not recognize private arrangements between agent and company (such as the standard industry Agency and Trust Agreement), and only recognizes the designated representative and owners (Lessee) to the agreement.

The key impacts of this include:

  • Liabilities for Brokers as Lessee: The Broker is on the hook for default rent owed, refusal of future agreements issued to them, and/or refusal of registering transfers to or out of the Broker’s name.

  • Risks for Companies whose agreements are held by a Broker: Defaults of one company may affect other companies who are also held confidentially by the same Broker. The Crown may use funds from agreements showing a credit to offset debts owed on another agreement.Transfers of all agreements held by the Broker may not be approved (registered) if there is a default.

At BRITT we love having the chance to put on our thinking caps to create new innovative solutions to challenges like these. This disruption has caused us to rethink and jump on an opportunity to throw out the old and create a new normal – it allows us to redefine and restructure how we are able to serve.

“We cannot solve our problems with the same thinking we used when we created them.”

– Albert Einstein

Despite the added risks and responsibilities, we are excited to announce that BRITT Land & Engagement will continue to offer Crown Sales services. This requires big changes to our process to ensure everyone is protected. Please contact us at crownsales@brittland.com to discuss a go forward plan and how we can best serve you. We are currently accepting new bids and transfers!

© 2019 by BRITT Land & Engagement

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