Given the surge in oil and gas exploration, mineral rights and interests have taken center stage in the offices of county recorders and title insurance companies throughout Ohio.  The demand for time to search the official record in Ohio counties, as well as the uncertainty posed by purported mineral severances, oil & gas leases and/or their accompanying appurtenant rights have combined to hamper efforts in performing title searches and have caused title insurance companies to refuse to provide any sort of insurance with respect to mineral interests and their appurtenant rights.

Log Jam Outside the Recorder’s Office

The sheer volume of title searches being performed in connection with oil and gas leases, particularly in counties where the official record can only be accessed through an in-person search, has severely hampered the ability of title searchers and title insurance companies to deal with mineral interests.  County Recorders, particularly those in rural counties in Northeast Ohio, have had to adopt policies to adapt to the increased demand for searches of the official record. For example, one county limits a single searcher’s time in the office to ten-minute intervals.  So if that searcher cannot complete his entire search in ten minutes, he must then stop and return to the back of the line to continue his search at a later time that day.  Due to the nature of mineral interests and the fact that many of the instruments evidencing severances and/or leases may often date back to the turn of the century (i.e., the turn of last century), a ten-minute interval is no where near enough time to conduct these searches.  The approach has made title searches in these counties much less profitable for searches and title agencies alike — particularly when the search will not ultimately lead to a premium for an owner’s policy.  As a result, many title searchers have simply stopped accepting orders to search mineral interests.

To fill the void, alternative search companies have been springing up in droves, usually online and otherwise independent of traditional title agencies.  Although these companies may provide some assurances with respect to the status and ownership of underlying mineral interests, people and entities choosing to engage the services of these companies should do so with caution.  Title agencies issuing a title commitment (and later, an owner’s policy of title insurance) are backed by underwriters with deep pockets, and more often than not carry errors and omissions (“E&O”) insurance.  So if a mistake is made in the search, there is often at least a chance that the person ordering the search will have some sort of recourse.  These alternative search companies are most often not backed by underwriters or any company with “deep pockets,” nor is there any guarantee that they

  1. have the resources and experience of a traditional title agency; 
  2. will be carrying E&O insurance;  or
  3. are even fully-capitalized, such that there are actual assets available in the event an error in the search leads someone to rely to their detriment and they obtain a judgment against the search company. 

These alternative searchers can be a good resource for running mineral interest searches, but caution should be used and those choosing to do so need to be aware of the potential limitations and risks inherent in ordering title searches through these companies.