§ 162.557 - Must a WSR lease provide for compensation reviews or adjustments?

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For a WSR lease of tribal land, unless the lease provides otherwise, no periodic review of the adequacy of compensation or adjustment is required if the tribe states in its tribal certification or authorization that it has determined that not having reviews and/or adjustments is in its best interest.

For a WSR lease of individually owned Indian land, unless the lease provides otherwise, no periodic review of the adequacy of compensation or adjustment is required if:

If the term of the lease is 5 years or less;

The lease provides for automatic adjustments; or

We determine it is in the best interest of the Indian landowners not to require a review or automatic adjustment based on circumstances including, but not limited to, the following:

The lease provides for payment of less than fair market rental;

The lease is for public purposes;

The lease provides for most or all of the compensation to be paid during the first 5 years of the lease term or before the date the review would be conducted; or

The lease provides for graduated rent or non-monetary or various types of compensation.

If the conditions in paragraph (a) or (b) of this section are not met, a review of the adequacy of compensation must occur at least every fifth year, in the manner specified in the lease. The lease must specify:

When adjustments take effect;

Who can make adjustments;

What the adjustments are based on; and

How to resolve disputes arising from the adjustments.

When a review results in the need for adjustment of compensation, the Indian landowners must consent to the adjustment in accordance with § 162.012, unless the lease provides otherwise.