Ohio Supreme Court Confirms Limits on Oil and Gas Brokers Working For Gas Companies
October 3rd, 2018
Ohio Supreme Court Confirms Limits on Oil and Gas Brokers Working For Gas Companies
The Ohio Supreme Court has finally answered a long percolating issue related to oil and gas lease practices. In Dundics, et al. vs. Eric Petroleum Corp., the Court found that individuals holding oil and gas leases on behalf of oil and gas companies must be licensed real estate brokers. In this case, Thomas Dundics filed suit against Eric Petroleum claiming that Eric Petroleum had failed to pay him related to lease deals that Dundics had secured on behalf of Eric Petroleum. Dundic would seek out landowners and help get them to lease their land with Eric Petroleum. Dundic was to be paid based on the number of acres he was able to get leased and was supposed to receive a future percentage of production from working wells.
When Dundic sued Eric Petroleum seeking to enforce the payment arrangement, the Mahoning County Court of Common Pleas dismissed the case finding that Dundic was not properly certified as a real estate broker and, as such, was precluded from bringing any lawsuit to recover damages for real estate transaction activities. The case worked its way through the appellate process and was finally affirmed by the Ohio Supreme Court. The Court held that the definition of real estate under Ohio R.C. 4735.01 includes “leaseholds as well as any and every interest or estate in land situated in [Ohio]”.
This case brings to bear one of the most frequent questions that people should be aware of when leasing or selling their mineral rights. Who is working for who? Many dozens of different land contractor companies work directly on behalf of oil and gas companies to get landowners signed up to lease and sales deals. Those contractors are rarely concerned with the best interests of the mineral owner. Their goal is to get the best deal for the company they are working for and to get the most compensation for themselves. There are, however, companies out there that land owners can reach out to for protection. Law firms, like ours, have been working for years now to protect the interests of landowner. Other companies do exist that provide very important services. Bordas Mineral Management, LLC has taken up the mantle of helping protect mineral owners from the evils of the leasing system. If you have questions about your lease or have been approached by company landmen asking to talk to you about your land, please reach out and find individuals who are qualified and ready to protect your interests.
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