Pa. House Bill would end longstanding blanket conveyancing practice and increase transaction costs.

The Pennsylvania House of Representatives is considering drastic changes to Pennsylvania recording and conveyancing laws that would significantly increase real property transactional costs.

House Bill 942, introduced March 12, 2013, would prohibit the transfer of multiple properties with one instrument, except for mortgage assignments. H.B. 942 is a response to Chesapeake Appalachia, LLC v. Golden, a case in which the Wayne County Recorder of Deeds rejected for recording four oil and gas lease assignments assigning 211 oil and gas leases because she could not properly index the lease assignments against the underlying lessors under the oil and gas lease. Documents are only indexed against the parties to the document. Because the underlying lessors were not a party to the lease assignments, there was no requirement to index the assignments against the lessors. The Commonwealth Court rejected the Wayne County Recorder’s argument and held that the recorder had no discretion to reject Chesapeake’s lease assignments.

Although the parties to a multi-property transaction are the same and all of the parcels are located in one county, H.B. 942 would end the practice of transferring all of the property with one instrument, instead requiring a separate instrument for each lease or parcel. Using the Golden case above as an example, rather than assigning each of the 211 oil and gas leases with four assignments, H.B. 942 would require 211 separate assignments and, significantly for the county recording office, recording fees for 211 documents. H.B. 942, if enacted, would be a boon to county recording offices, but parties to multi-property transactions would face increased transactional and recording costs to effect a transaction that could be efficiently completed with far fewer documents.