It is common practice in the oil and gas industry for only the lessor to sign an oil and gas lease. This practice has led to disputes in Pennsylvania regarding whether a lease signed by the lessor alone is valid under the Pennsylvania Landlord and Tenant Act’s statute of frauds. The U.S. Court of Appeals for the Third Circuit recently joined the Pennsylvania Superior Court in concluding that landlord-tenant law does not govern oil and gas leases in Pennsylvania, and that, under the general statute of frauds, a lease signed by just the lessor is valid and enforceable.
This statute of frauds dispute turns on the issue of whether, under Pennsylvania law, an oil and gas lease should be treated as a lease within the context of landlord-tenant law, or a transfer of property and thus subject to the statute of frauds governing conveyances of real property. Pennsylvania law had long been silent on this issue, although other mineral-producing states have generally held that the statute of frauds governing conveyances of real property is controlling, as recognized in Williams & Meyers’ “Oil and Gas Law” Section 213, which says that, “by the great weight of authority, conveyances of royalty, mineral and leasehold interests are included within the statute of frauds.”
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