How will a gas lease affect a mortgage?

Asked about 2 years ago - Pittsburgh, PA

Is there anything a property owner who want to lease their land should know ahead of time to make it easier to refinance their mortgage down the road?

Attorney answers (1)

  1. Clifford L. Tuttle Jr.

    Pro

    Contributor Level 15

    1

    Lawyer agrees

    Answered . The lender may ask for the oil and gas lease to be subordinated to the mortgage. This was rarely done in the past, but a few lenders are worrying about it since the Marcellus boom. They may also want assurance that there will be no surface operations, or that they can exercise control over the extent of operations. The good news is that there are certain lenders who are comfortable with oil and gas operations and can work around existing leases. If you have small acreage, it will be easier to limit surface operations. However, with larger tracts, this may be difficult. A lawyer with oil and gas and real estate lending will probably be able to get you through the refinance process.

    Clifford L. Tuttle, Jr.
    Attorney at Law
    Pittsburgh, PA

    The foregoing answer does not constitute legal advice and does not create a lawyer-client relationship. Answers... more

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