Ohio Supreme Court Upholds Land Professional Licensing Requirement

On September 25, 2018, the Supreme Court of Ohio issued its opinion which held that oil and gas land professionals must be licensed as real estate brokers in Ohio if they are engaged in obtaining oil and gas leases for other oil and gas development companies. In Dundics v. Eric Petroleum Corp., No. 2018-Ohio-3826 (Ohio Sept. 25, 2018), the Court affirmed an appeals court decision which held that oil and gas land professionals could not bring a suit against an oil and gas development company for compensation owed in acquiring oil and gas leases because such leases fall within the statutory definition of “real estate” as defined in O.R.C. 4735.01 and therefore, oil and gas land professionals must be licensed as real estate brokers, as provided for in O.R.C. 4735.01, before they can negotiate the acquisition of these leases.

In reaching its conclusion, the Court relied upon the statutory definitions of “real estate” and “real-estate-broker,” which the Court found to be clear and unambiguous. The Court determined that there was no basis in the statutory language for excluding oil and gas land professionals or oil and gas leases from the relevant definitions or from the reach of the licensing regime. As a result, the Court determined that the suit brought by the oil and gas land professionals had been properly dismissed because they were not licensed to perform such activities in Ohio.

From the Court’s perspective, it is for the Ohio General Assembly to consider the goals and intention of the licensing requirements and decide whether oil and gas land professionals should be exempted from such requirements since the General Assembly had created certain other exemptions from the otherwise broad reach of the licensing requirements, including exemptions for attorneys, bankruptcy trustees, and executors of wills.

If you have questions about how this decision may affect your business, please contact one of the authors of this alert.