Before I read this Reuters article http://www.reuters.com/article/2012/12/27/chesapeake-mcclendon-idUSL1E8NQ2H720121227, I was not aware that a Lessee’s nonpayment for services rendered could result in a claim against the Lessor’s land.
Is there lease language to protect the land owner against such claims?
Do such claims extend beyond the surface estate to the mineral estate, including the mineral estate of the non surface owners?
Here are excerpts from the article:
Otis Eastern [is] a New York-based contractor that laid pipeline for Chesapeake...
In summer 2011, Chesapeake began to fall behind paying its bills ... After months of fruitless demands, Otis sued. It is now in the process of filing liens on Pennsylvania land that was leased by Chesapeake....
Otis Eastern isn't the only company upset with Chesapeake and its affiliates. ... Those affected extend beyond the contractors, too:
* On Nov. 2, a New Jersey construction and drilling company filed a lien against property leased by Chesapeake...
* On Dec. 7, two New York contractors also filed liens...
* And on Dec. 20, a Minnesota drilling contractor filed three liens on properties leased by Chesapeake...
Chesapeake may have transferred the debts owed to contractors, but the company is still listed as the debtor in the non-payment suits. And the liens filed for non-payment show up as claims against land owners with whom Chesapeake cut deals.
Such liens could interfere with an owner's ability to sell the property, said Stanley B. Edelstein, a Philadelphia construction law attorney. "Depending on the language in a mortgage, it could be an act of default," he said.
Bradley Sink and his wife, Beatrice, own the land where construction company Carson & Roberts filed its lien against Chesapeake. Sink, a retired farm equipment dealer, did not know the lien had been filed until he was contacted by a reporter.