Recovery of royalty underpayment

Recovery of royalty underpayment

A landowning charity - the freeholder of a sand and gravel pit in the Midlands - was unsure whether the royalty mechanism for the sand and gravel was being correctly implemented, and whether the royalties were being properly calculated. We were asked to investigate. 

We found that the mechanism for indexing the royalty from one year to the next hadn’t been correctly implemented – and that there’d been a significant underpayment over the previous eight years. We also discovered that the surface rent hadn’t been correctly calculated over that period, and that some other tenant’s obligations hadn’t been complied with.

As a result of our work, the charity was able to recover the underpaid rent and royalty - with interest. They were also able to make sure that the tenant complied with their covenants.