Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Two Court Cases Could Upend Real Estate Laws Both Oil and Gas Suits Feature Old Deeds and Confusion about Who Owned Mineral Rights

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Two Court Cases Could Upend Real Estate Laws Both Oil and Gas Suits Feature Old Deeds and Confusion about Who Owned Mineral Rights

Article excerpt

Two oil and gas leasing cases that will be argued in front of the Pennsylvania Supreme Court next week have the potential either to modernize or seriously disrupt centuries-old state real estate laws that have roots in the days when tax collectors still rode horses and much of Penn's Woods was wilderness.

Both of the cases feature old and complicated deeds, confusion about who owned oil and gas rights that had been severed from the surface property, and laws that aimed to sort out such disorder.

The first case, Shedden v. Anadarko, challenges a century-old legal principle in the state known as estoppel by deed, which gives a lessee - in this case, an oil and gas company - the benefit of the original agreement if a property owner signs a contract to lease what he owns, finds out he doesn't own all of it and later acquires it.

The Superior Court cited the "well-settled" estoppel by deed doctrine when it sided with Anadarko E&P Co. in its decision last year. But the three-judge panel noted the doctrine had never been applied in Pennsylvania appeals court decisions involving oil and gas leases, although other states' courts have used it in oil and gas disputes.

At stake in the Supreme Court's review is the legitimacy of legal precedents and common lease terms that help ensure oil and gas companies get access to all of the property that landowners intend to lease, whether or not convoluted title issues are discovered later, as often happens in a state where early deeds were handwritten in cursive.

In the second case, Herder Spring Hunting Club v. Keller, the court will look at a long-retired practice called title washing. In that practice, undeveloped surface property is reunited with its severed mineral rights during a tax sale if the mineral rights had not been registered with county officials and separately assessed for taxes.

Looking for a log cabin

Property registration for unimproved land was required under an 1806 law. Otherwise, attorney Michael Vennum of Burleson LLP explained, "When the tax collector is riding his horse down the road, if he can't tell that your property is developed because there is no log cabin on it, the tax collector won't naturally know that he is supposed to tax that land. …

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