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Permalink Reply by Jim Litwinowicz on September 8, 2012 at 3:17am

I talked to a state Sen yesterday and he is aware of this problem but knows little about it.  He asked me to talk to his staff about it. Any advice from anyone would be greatly appreciated.

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Permalink Reply by Jack Straw on September 8, 2012 at 4:47am

My understanding is that when O&G rights are severed from the surface deed, there should a seperate Tax ID set up for the severed O&G rights (typically the map id for the surface parcel followed by a suffix); and bi-annual tax bills should be sent out to the owner of record of the O&G rights.

If you contact the Tax Collector for the respective township you should be able to determine:

whether a tax id had been established for the severed O&G rights,

if tax bills are being sent out for O&G rights,

and, if taxes bills are going out, to whom and whether they are current in paying taxes.

 

When taxes are past due for an extended period of time, the O&G rights can be sold at via auction.

 

Once you get as much "free" information from the township Tax Collector as you can, I suspect that you need to obtain the advice of a PA Attorney who specializes in Real Estate Law to advise you on how to best proceed.

If taxes are past due, it is possible that you can request that the O&G rights be brought up for auction - giving you the opportunity to bid on them. Of course, if you are lucky, the township Tax Collector (or a real estate Attorney) might be able to suggest something simpler and better for you.

 

All IMHO. Nothing I have stated should substitute for sound legal advice,

                                                                                                                            JS

 

 

 

 

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Permalink Reply by Moldyoak on September 8, 2012 at 5:46am

Sometimes the rights were severed LONG ago, i.e. Civil War era or even earlier.  Fortunately for many surface owners, many of those old pre-20th century reservations do not specify 'gas.'  Before the Marcellus busted onto the scene, it was fairly easy to pay a lawyer to perform an Action to Quiet Title using adverse possession, and most judges easily went along with it (despite the fact that most of the adverse possession cases really did not involve true adverse possession as I understand PA law to define it).  Since everyone is hyper sensitive to mineral, oil or gas right now, however, the chances of getting a Quiet Title action through under the radar are basically nil.  They are still being performed, but much less commonly I believe, and I think many are now likely to be contested.  I do know that Senator Gene Yaw sponsored a Bill which would allow the surface owners to rejoin severed mineral rights with the surface after a period of something like 20 years of non-use, however that Bill (AAS far as I know) has been stuck in committee for something like 1.5 or 2 years now.  I don;t know if it is making any progress or not.  I can see it from both sides of the coin and I can see how both sides might feel very strongly about the validity of such a Bill.  Tough topic.

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Permalink Reply by Jack Straw on September 8, 2012 at 8:30am

RE: "the Marcellus busted onto the scene, it was fairly easy to pay a lawyer to perform an Action to Quiet Title using adverse possession, and most judges easily went along with it (despite the fact that most of the adverse possession cases really did not involve true adverse possession as I understand PA law to define it)."

 

Interesting that Adverse Possession (aka Squatter's Rights) could be used (missused?) in this manner.

Seems a bit flakey, but I suppose in the absence of any PA law to handle the situation in which O&G rights are in some sort of limbo - I can see where a Judge would take on a Solomon like role and attempt to dispense justice (though lacking in  easily defendable legal rationale).

 

For Jim's benefit - in PA, a claim of Adverse Possession requires 20 years previous uninterrupted time.

 

JS

 

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Permalink Reply by Moldyoak on September 8, 2012 at 1:16pm

That's exactly right - around 20 years uninterrupted USE of that which is being adversely possessed.  The surface doesn't count - the surface is not that which is under contention.  I was told by a very respectable and long-experienced lawyer a few years back, in a casual conversation, that *in his opinion* most Quiet Title actions were really not much more than an expensive whitewash to comfort the surface owner that would not, if seriously challenged, stand up under intense scrutiny.  Furthermore, given the expansiveness of the internet now, it's increasingly difficult if not nearly impossible to claim that the owners or descendants of owners or agents of owners can not be found, and if you can find them, you are obligated to track them down and give them notice directly rather than a simple local newspaper and law journal advertisement (yes it must be advertised in the local law journal as well as the newspaper, as I understand it).

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Permalink Reply by J. Stallard on September 19, 2012 at 10:14am

For dealing with these lost severed mineral owners, the key issue with Adverse Possession are the taxes.  Most states have a statute which says that it is the obligation of the owner of a severed interest in land (whether it be an O&G owner, a coal owner, or even a Lessee with a leasehold interest) to report their interest to the taxing authority (i.e. the Assessor) and have that interest taxed properly, and pay such tax.  Failure to do so can cause the owner of such a severed mineral interest to be divested of their interest (through tax sale, or through quiet title action.) 

The requirement of "use" can also mean paying the taxes on the severed interest for the right number of years.  Think of this as well:  Lets say that the fee estate (all separate interests together) is only broken up between O&G and the Surface.  When a separate ticket/parcel id for the severed interest is not generated because the long-lost owner of the O&G never notifies the county of the need for their separate ticket, the County doesn't just not tax that interest.  In that case, the county issues its customary single ticket in the name of the known surface owner.  Even though that ticket is in the name of the surface owner, in lieu of a separate assessment for the O&G, seeing as it is the only ticket for the property, the O&G estate is INCLUDED in that single ticket.    The county does not issue a ticket for only 50% of the fee estate, and let the other 50% lapse.  That would be unfair to everyone who pays their taxes.  The people who own the other 50% shouldn't be allowed to not pay any taxes and still keep their property, hence laws allowing a process of adverse possession to bring the severed estate back to the tax-paying surface owner. Think of it this way, with regards to the need for open, notorious, uninterrupted, etc, use of the property to claim adverse possession:

A: Because the whole fee estate (including the O&G) had been assessed under that one single ticket, and B: Seeing as the surface owner has paid the tax for the past (insert your state's statutory requirement of years), the surface owner had been paying the taxes on the O&G all this time, and C: paying the taxes on the O&G is the main way that "use" of the estate can be proven, the surface owner 'may' be able to claim that they have had adverse possession of the mineral estate all this time seeing as they have picked up the only tax bill issued for that property for all these years.

Additionally, with regards to the comment:

 I was told by a very respectable and long-experienced lawyer a few years back, in a casual conversation, that *in his opinion* most Quiet Title actions were really not much more than an expensive whitewash to comfort the surface owner that would not, if seriously challenged, stand up under intense scrutiny.

It is true that some Quiet Title actions are contested, and a good number of these cases win.  These cases win because the original QT action was botched by an inexperienced attorney.  Many times it is for a failure of the attorney bringing the action to show that they performed a diligent enough search for the missing mineral owners.  A few publications don't cut it any longer.  Think about it: the attorneys don't perform the necessary due diligence because the chances of some long lost mineral owner that has no idea that they had this interest coming back and filing an action challenging the quiet title are pretty slim.  The risk the surface owner takes in not hiring a good attorney (who has performed many quiet title actions... this is a realm where experience really counts no matter how good the attorney may be) is that after all these decades the old mineral owner may return and file their case to contest the original QT action. 

Perhaps once the quiet title action is performed, see if you can purchase a title insurance policy which covers the mineral estate and does not except the QT action?

Good luck to you if you are considering attempting to reunite the minerals under your land with the surface, I hope to see more and more people successful with this, as it would make the records easier to navigate and save lots of searching for these unknown heirs that own fractional interest in O&G.

JS

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Permalink Reply by Ed on September 19, 2012 at 11:09pm

Sorry Jim, I think you are getting a lot of misinformation here.  Although it isn't impossible, it is 99% unlikely that "action to quiet title" or "adverse possession" would cut the mustard.  Under PA law ANY abandoned property of ANY kind (be it real estate, OGM rights, or a lost gold bracelet) becomes property of the state.  Then the only way to gain possession is through an auction held by the state treasurer.  I think cash is the only exception since an auction for cash would be foolish.  After the correct procedure the cash can eventually be turned over to the finder but I'm not sure about that either.

You have to use something to gain adverse possession so unless you drilled your own gas well and used it for 20-21 years you wouldn't have a case.  Filing suit to quiet title is impossible since you don't have title to it in the first place...hence no title to quiet. In other words, when you bought the property you didn't buy the oil & gas rights with it.  

So I say drill, baby, and wait it out.

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