Client Alert: Recorded Lease Is a Savings Event Under the Ohio DMA

Pittsburgh Office, 11/10/2015

The Ohio Supreme Court has held that a recorded oil and gas lease is a savings event for purposes of Ohio’s Dormant Mineral Act (the “DMA”). In Chesapeake Exploration, L.L.C. v. Buell, Slip Opinion No. 2015-Ohio-4551, the Court first determined that such a lease is a title transaction, concluding that the examples of title transactions in the Marketable Title Act (of which the DMA is a part) are not exclusive, and that the oil and gas lease was a transaction that affected title to the surface and mineral interests in the land. The Court also determined that such title transaction constituted a savings event because it was recorded with the county recorder’s office.

However, the Court determined that the expiration of such a lease, with the accompanying reversion of rights to the lessor, is not a savings event (leaving open the question of whether a recorded release would constitute a savings event). In so doing, the Court rejected the contention that the recorded lease satisfied the DMA’s recording requirement as to the expiration of the lease because the lease itself provided notice of the expiration date. The Court also rejected the assertion that the existence of a recorded oil and gas lease acts as a savings event throughout its entire term.

The Real Estate Practice Group at Burleson LLP is available to answer your questions and counsel you as to the complexity of Ohio’s Dormant Mineral Act. Please contact Michael Vennum, Partner, or Kristin McCormish, Senior Counsel, at (724) 746-6644.

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