August Legislative Affairs

Aaron F. W. Meek

Rison, Meek & O’Shields, PLLC

J. David Hampton

Hampton and Milligan PLLC

House Bill 1222 – New options to cure title clouded by the failure to join a spouse to a contract involving property that may be homestead

Chapter 7 of the Oklahoma Title Examination Standards pertains to marital interests and the effect of homestead on real property conveyances. In the past, the title standards contained within Chapter 7, in particular standard 7.2 and the comments thereto, have been fairly draconian. However, last session, the Oklahoma legislature passed House Bill 1222, which was signed by the Governor and will take effect November 1, 2019. HB 1222 amends 16 O.S. § 13 to add the following language:

B. In the event a recorded conveyance of nonhomestead property has been executed by a married grantor without being joined by his or her spouse, said conveyance shall still be considered a valid conveyance of marketable title if one of the following instruments is placed of record:

1. An affidavit executed by the nonjoining spouse stating that the property conveyed was nonhomestead property; or

2. A conveyance executed by the nonjoining spouse, with or without others, relinquishing any claim to an interest in the property to the same grantee, or to a successor or successors in interest, with a recitation that the property was nonhomestead property.

As a result, effective November 1, 2019, there will be more options available to landmen and attorneys tasked with clearing title defects related to the failure to join a spouse on a conveyance, mortgage, or contract related to real estate that may be homestead.

The changes to the law raise certain questions, however. In particular, title examiners previously were not permitted to rely on recitations as to the nonhomestead character of real property. It is unclear if the changes to the law now permit examiners to rely on such recitations in a (B)(1) affidavit or a (B)(2) conveyance. The Oklahoma Title Examination Standards Committee is meeting soon to discuss changes to Chapter 7 of the Oklahoma Title Examination Standards to address this change in the law, so it will be interesting to see the title standard that they adopt.

Cooksey v. Smith

In the recent production in paying quantities case of Cooksey v. Smith, the trial judge in Canadian County held that the following expenses, among others, should be considered “lifting costs” in the paying quantities analysis: swabbing, water disposal, restoration of the well to production following a casing leak, the annual permit fee paid to the City of El Reno, and “maintenance/weed control” on the well location. The inclusion of these expenses as lifting costs in the PPQ analysis was appealed, and the Court of Civil Appeals, Division I, affirmed their inclusion as lifting costs in Case No. 116,457. Although the appellate decision was not issued for official publication, operators should be aware that municipal permitting fees and “maintenance/weed control” on the well location may be considered lifting costs in a PPQ analysis.

The Court of Civil Appeals also affirmed that the trial court’s use of a 23-month period for the paying quantities analysis was non unreasonable under the facts of the case. The defendant had urged the use of a period of nearly five years.

If you know of legislative or regulatory activity that you would like the Legislative Affairs Committee to analyze and discuss, please let us know by contacting Aaron Meek at ameek@rmo-law.com or (405) 724-7444.