Oil and Gas Rights / Tax Sales
Tuesday, December 17, 2019
Leiper v. Gallegos
Cal.App. 2nd Dist. (B292905) 11/20/19
The court held that a tax sale of real property does not include oil and gas rights in a previously recorded oil and gas lease. Under Revenue and Taxation Code Section 3712(d) a recorded oil and gas lease is a “restriction of record” and excepted from the tax deed in determining the title conveyed. An oil and gas lease is also an easement because an oil and gas lease is a profits a prendre, which is a non-possessory interest in land. A profit is simply a type of easement, and easements are also excepted under Section 3712(d). The court noted that upon termination of the oil and gas lease, the oil and gas rights will revert to the surface owner.