1. Title at Work in the Utica Shale
By: Travis Jeric, Esq.

2. The State of Ohio
Admitted 1803

3. Land Records – Ownership of Real Property
Recorded in a government office for the owner’s protection.
Under the law, if an individual’s ownership is not made a matter of public record, they may NOT be able to assert title – especially against innocent purchasers from a former owner

4. Title Examination
Careful search of public records reveals the status of the legal ownership of any given parcel of land
Determines the Status of Land Titles
A typical title examination is a backward search of the records, beginning with the present owner and tracing back through each preceding owner.
The object of this examination is to establish the chain of title. The present owner’s claim is good if his or her title proves to be part of an unbroken chain of ownership.

5. Ohio Supreme Court States; General Rule as to Marke​tability
Ohio Title Standards
Ohio Supreme Court States;
General Rule as to Marke​tability
Marketable title is one that a purchaser would be compelled to accept in a lawsuit for specific performance
Objections to title should not be made by an attorney when the irregularities or defects do not impair the title or cannot reasonably be expected to expose the client to the hazard of adverse claims, litigation or expense in clearing the title
“A Marketable title imports such ownership as insures to the owner the peaceable enjoyment and control of the land as against all others.”

6. Marketable Title Act 40 year SOL regarding the Marketability of title
Any person “who has an unbroken chain of title of record to any interest in land for forty years or more, has a marketable record title to such interest”
Does not apply to extinguish interest in coal, railroad, public utility easements, or easements observable by physical evidence
Does not apply to severed mineral interest
Conflicting points of view
A title search often must go beyond the root of title.
For example, an oil and gas lease, or easement, which was effective in 1950 would be beyond 40 years of a search conducted in 2014, but still could affect the title to the property. In such a situation, fee title could be passed, but the title might be subject to the lease or easement made in 1950, which would not be found if the search were limited to 40 years.

7. Dormant Mineral Act - 1989 DMA I Silent as to notice requirement
Twenty year look back period
Six different savings events
Three year grace period
(3/22/1989 – 3/22/1992)
Automatic reunification of minerals with surface estate?

8. Six Savings Events:
Subject of a title transaction filed or recorded with county recorder
Actual production or withdrawal of minerals
Minerals used in underground gas storage operations
A drilling or mining permit
Claim to preserve the interest has been filed
A separately listed tax parcel number

9. Dormant Mineral Act - 2006 DMA II
Specific notice and filing requirements
Effective June 30, 2006
Severed more than 20 years
Examine closely to determine if there has been possible automatic abandonment under 1989 DMA
Six different savings events

10. Process Under 2006 DMA
Notice of Intent to Declare Mineral Interest Abandoned
20 year look back period
Affidavit of Abandonment
Not less than 30 days but no more than 60 days
Affidavit to Preserve Mineral Interest or Affidavit of Event Preventing Abandonment
No more than 60 days after receipt of notice
County Recorder Memorializes Record errrrr “Notice of Failure to File.”

11. Drilling Title [determining properly leased mineral owners] v
Drilling Title [determining properly leased mineral owners] v. Division Order Title [determining proper payments]
Arguably, the 2006 DMA does not apply to a royalty because “royalties” are treated as personal property in Ohio jurisprudence.  “Mineral Interest” is defined as a fee interest under the 2006 Act.  A fee interest is real property and not personal property.  However, several Ohio trial courts are allowing the DMA (under both versions) to declare a royalty reservation abandoned.  The trial courts do not discuss the statutory definition of a mineral interest compared to a royalty interest.  The 1989 DMA does not define a mineral interest. 
Therefore, it is unclear whether a royalty interest could be declared abandoned by this version. 

12. Recording Statutes
Race – Notice: as to all documents except Oil and Gas Leases
First to file of record and possible actual notice
Race: As to Oil and Gas Leases (and OGL assignments)
First to file of record

13. Restrictive Covenants
Need to be aware of restrictions and covenants filed of record
Ohio case law looks to the specific language of the restriction/covenant
May need to amend the restriction/covenant
Draft Waiver of Covenant
If all parties bound by the restriction/covenant are leased, then we consider the covenant waived

14. Mortgages Foreclosure of Mortgage with Priority
Super Priority for Oil and Gas Leases in Ohio
“If a mortgaged property that is being foreclosed is subject to an oil or gas lease, pipeline agreement, or other instrument related to the production or sale of oil or natural gas and the lease, agreement, or other instrument was recorded subsequent to the mortgage, and if the lease, agreement, or other instrument is not in default, the oil or gas lease, pipeline agreement, or other instrument, as applicable, has priority over all other liens, claims, or encumbrances on the property so that the oil or gas lease, pipeline agreement, or other instrument is not terminated or extinguished upon the foreclosure sale of the mortgaged property. If the owner of the mortgaged property was entitled to oil and gas royalties before the foreclosure sale, the oil or gas royalties shall be paid to the purchaser of the foreclosed property.”
Subordinations are still pursued

15. Land Installment Contract
Definition: An agreement that obligates the parties involved financially over a period of time but does not involve the transferring of a deed for the property. The buyer is permitted to move into the property and make payments. Once the obligation is satisfied, the seller then records the deed and passes it over to the buyer.
Lease (and/or ratify) both sides!
Record title owner
Equity interest owner

16. Power of Attorney POA must be recorded before a deed
A general power (anything the principal could do if present) is NOT sufficient
Must be a specific grant of authority to convey or lease real estate

17. Dower (Marital Status)
Statutory Inchoate Dower
Black’s Law Dictionary = at common law, a wife’s right, upon her husband’s death, to a life estate in one-third of the land that he owned in fee.
1/3 Life Estate in the surviving spouse
Must have both spouses execute oil and gas lease to release inchoate dower
Deed from one spouse to another is not sufficient to release the grantor spouse’s inchoate dower interest (unless the deed is pursuant to a divorce decree)

18. Roads?
Default Rule: the road is owned to the center by abutting landowner, unless; - Dedications (recorded subdivision plat is a dedication) - Owned by County or municipality (statutory) - Be aware of a fee conveyance to any governmental entity

19. Definition of Minerals
A conveyance of “minerals” includes oil and gas
Qualifying or limiting words
Intention of the parties
Construed in favor of the grantee rather than grantor

20. Abstracts and Title Opinions
Order
Review in detail
Determine type of curative
Determine level of curative
Proceed with curing title defects

21. Title Curative Documents
Amendments and Ratifications of Oil and Gas Leases
Unleased Spouse (dower)
Improper legal descriptions
Affidavits of Marital Status
Waiver of Restrictive Covenants
Stipulation of Interests and Cross-Conveyance
Dormant Mineral Act issues
Releases of expired Oil and Gas Leases
Affidavits of Non-production
Unreleased OGLs
Mortgage Subordinations

22. Title Team Product = Title Review
Approve legal title to:
Drillsites (elevated review)
Laterals
Drilling Units
Marketable Title v. Business Risk
Marketable Title does NOT equate to Drilling Title
It is for insurance purposes
Valuable Tool for Operators

23. Closing Statement
Thank You Very Much!

24. Bibliography
Ohio Title Standards prepared by the Real Property Law Section of the Ohio State Bar Association, including;
OTS 1.1 General Rules-Marketability
Ohio Supreme Court syllabus of McCarty v. Lingham, 111 Ohio St. 551, 146 N.E. 64 (1924)
Ohio Revised Code § (Marketable Title Act)
Ohio Revised Code § (Dormant Mineral Act)
Effective Date: ; ;
Ohio Revised Code § (D) - Notice to holder of royalty interest of assignment or transfer of entire interest in lease
Online property law resources provided by Ohio State Bar Association: