Clearing old leases

  I have been working on obtaining releases for leases which have expired. As I worked on this problem, I have come up with a few problems.

  1st problem:

Landowner signs lease with A, A subsequently  assigns the lease in its entirety to B.  A is no longer in business, and the lease terms have expired.  The lease is not held by production, and there has been no activity for 13 years. The question is, do I need a release from A?

  2nd problem:

  Landowner signs lease with A, A subsequently assigns a working  interest or royalty  interest to B. A is still in business,  B's business status is unknown. The lease's status is the same as the 1st problem. The question is, do I need a release from B, or is  his interest extinguished  upon securing a release from A?

  3rd problem:

  Landowner signs lease with A, A combines a group of leases and uses them as collateral for a line of credit with B. A mortgage of the group of leases was recorded. The lease's status is the same as the 1st problem. The question is,  do I need to get a release of the mortgage from B?

  I ask these questions, because this process can become expensive. I have had one company willing to sign a release for it's working  interest assignment. The recorder fee was $67.00. If I follow the example at a Buckeye minerals meeting, where a lease was assigned 88 times the recording fee would be $5,896.00.

  What are your thoughts?

 

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Replies to This Discussion

Permalink Reply by John Yaskanich on February 28, 2013 at 4:18am

Pay the fee and proceed towards your goal of a new gas lease in the utica shale and become a rich man.

Permalink Reply by Jackie on February 28, 2013 at 5:07am

Is this in Trumbull or Ashtabula County?  We have a great gas/oil lease attorney in Jefferson, Jerry Lemire.  He has helped many of my real estate customers clear old dead leases.  I'll be happy to give you his contact number if you're interested in speaking with him?

Permalink Reply by james mcmeechan on February 28, 2013 at 6:00am

Jackie,  I am in Ashtabula County. I would appreciate the number, thanks.  Is he located by the court house in Jefferson?

Permalink Reply by Jackie on February 28, 2013 at 6:10am

No he has his own office.  He has helped many folks resolve these old leases. 

His number is 440-576-9177.

If you have any questions or I can assist with anything, let me know.

Hope you make lots of utica $$!

Permalink Reply by Jackie on February 28, 2013 at 6:30am

Jerry Lemire will file whatever affidavits are needed.  Doesn't hurt to talk with him.  Perhaps you're knowledgeable with these things but most folks I've dealt with find the legal ins and outs a little too complicated and time consuming.

Permalink Reply by james mcmeechan on February 28, 2013 at 7:38am

 Jackie, you are correct it is confusing. I thought I could look online, find my information and move on. If you do that you could be very disappointed. The online version only contains information on items recorded from 1984 to the present. Anything recorded prior to 1984 will not show up on line. They also track everything, by the name of the owner of the property, at the time the lease was signed. You need to know  who owned the property before you, and search that person's name. They have started to use parcel id numbers, but that only goes back 10 years if that.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on February 28, 2013 at 6:24am

"I have had one company willing to sign a release for it's working  interest assignment. The recorder fee was $67.00. If I follow the example at a Buckeye minerals meeting, where a lease was assigned 88 times the recording fee would be $5,896.00."

Why are you killing yourself to get releases?  File an Affidavit using ORC 5301.332 and have the recorder mark the old lease as void.  Problem solved and it will not cost you an arm or a leg.

Permalink Reply by james mcmeechan on February 28, 2013 at 7:06am

  Marcus, I agree the process is killing me, but I hope it is not self inflicted. I am using the process provided for in ORC 5301.332. I am a few days from the 60 day period required for the lessee to respond. I filed my notice of forfeiture ,and the cost was  $80.00. The Ashtabula County Recorder requires the affidavit be filed again at the end of the 60 day grace period, cost would be $84.00. Total cost $164.00.

  The other problem is, I have several assignments granted to companies  that  no longer exist. In order to use ORC 5301.332, I will need to publish a ad in the paper. The information required by  5301 will  make the ad lengthy.  The cost of the ad and the recording fees are what I would like to avoid, if in fact a assignee's interest, end with the lease.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on February 28, 2013 at 8:29am

No.  The recorder is wrong.  It is filed once.  On day 60 the recorder is to remove the old lease of record.  most counties require you to send them a letter asking them to do it.  There's no reason on Earth that you'd file the exact same affidavit twice. 

Additionally, it's a 30 day notice period to the Lessee and your affidavit can be filed any time between day 30 and day 60.

Permalink Reply by james mcmeechan on February 28, 2013 at 10:21am

                Marcus, I'm with you that 5301 does not require the second recording, and that the recorder is wrong. She is however, as adamant about the second recording, as she is wrong. I spoke with recorder herself. She stated she gets her interpretations from the prosecutor, and that is how it will be done. she was not rude, that just how I interpreted our conversation. If you want to file an affidavit of forfeiture , and have it noted in the margin, in Ashtabula County you will file and pay for it twice. If you know of anyone who has not done it this way, I would be interested in knowing. Just to give you a time frame, I filed my notice on 2/27/2013.Thanks.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on February 28, 2013 at 10:26am

I would talk to the prosecutor and see where in the world he got that interpretation from.  I know every county pretty much does whatever they please but you're getting clipped for the cost of recording twice and it seems unfair.

"If the lessee, his successors or assigns, does not give such notice in writing to the lessor at any time prior to the sixtieth day after the mailing or publication of the notice of the lessor of his intention to declare the lease forfeited, then the lessor shall cause the county recorder to note upon the margin of the record of the lease the following: “This lease cancelled pursuant to affidavit of forfeiture recorded in Lease Vol. . . ., Page. . . .” Thereafter the record of the lease shall not be notice to the public of the existence of the lease or of any interest therein or rights thereunder and the record shall not be received in evidence in any court of the state on behalf of lessee, his successors or assigns, against the lessor, his successors or assigns."

Is there version of "shall cause" really a second recording?  That's stupidity. 

Permalink Reply by DJM on February 28, 2013 at 11:36am

Marcus,Is orc 5301.332 called "quiet title" ?

                                   Dan

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