Just The Facts, Ma'am: Recording an Affidavit Related to Title

Ohio law permits anyone knowledgeable about facts which may affect the title to property to record an Affidavit of Facts Relating to Title with the county recorder.  This affidavit serves as evidence of facts and matters that have a bearing on title to the property.

The statute allows the affiant to state facts about a wide variety of matters, such as birth and death, the identity of parties, possession of the property, the location of physical features such as fences or streams and, most broadly, "[t]he happening of any condition or event that may create or terminate an estate or interest" in the property.

An Affidavit of Facts Relating to Title warns potential purchasers that another party may have an interest in the real estate.  Before purchasing a property, it is wise to do a comprehensive title search to ensure that you will receive clean title to the real estate.

Forfeiture of Mineral Leases

When a landowner performs a title search on his property, he or she may discover that someone else has leased the oil or gas rights on the property, even though the landowner has never received royalties or even seen any drilling equipment. Under Ohio law, an owner or lessor cannot lease the property if another person or company holds an existing mineral lease, even if the conditions in that lease have not been fulfilled. Ohio Revised Code § 5301.332 provides the statutory procedure for forfeiting a mineral lease if the lessee has not kept specific covenants in the lease.

First, after the lease is discovered, further research must be done to determine the current lessee. Particularly in the case of old leases, the original lessee may have transferred the lease to another person or company.

Once the current lessee is identified, Ohio law requires that the lessor notify the lessee in writing that the lease has been forfeited, describing the specific ways that the lease has been violated. This requires careful examination of the lease document. For example, a lease may state that it remains in effect as long as oil or gas is produced from the land; or as long as lessor is paid royalties.

After thirty days of providing notice, the lessor can file an affidavit of forfeiture with the county recorder’s office reciting, among other things, the failures to abide by the lease. In response to this notice of forfeiture, the current lessee may release the lease or respond with an affidavit detailing why the lease may still be in effect. If there is no response within sixty days, the lease can be canceled by the county recorder.

This process is similar to the procedure under the Ohio Dormant Mineral Act, discussed in a previous blog post, which allows a property owner to claim another individual’s abandoned rights to the minerals located beneath the landowner’s property.

The Ohio Dormant Mineral Act

Increasing oil and gas discoveries in Ohio has led more and more property owners to search for profitable minerals on their land. However, surface landowners are often surprised to learn that they cannot drill on their property because another individual or entity owns the rights to the gas, oil, coal, or other minerals beneath the surface. Even though the property is undeveloped, the surface property owner cannot extract the minerals from the land – or lease the drilling rights – unless he or she also holds the underground rights.

The Ohio Dormant Mineral Act provides specific procedures for property owners to claim another landowner’s mineral rights to these undeveloped underground resources.

If you are a surface owner seeking to obtain rights in sub-surface resources, you are required to: 1) notify the mineral rights holder of your intent to declare his or her interest abandoned, and 2) 30 to 60 days later, file an affidavit of abandonment with the county recorder’s office. If the mineral rights owner does not act, the law considers his or her rights abandoned, and you will take possession of the underground mineral interest.

If you are the mineral rights owner, you have two options to preserve the interest. You can: 1) file a claim with the county recorder to preserve the interest, or 2) file an affidavit that identifies one of several specific events (such as the production of minerals or a title transaction) that has occurred on the land within the previous 20 years. These actions demonstrate to the property owner that the mineral rights have not been abandoned.

Regardless of whether you own the surface rights or the mineral rights, following the proper procedural steps are essential to preserving your rights, and it is advisable to consult an attorney before proceeding.