Superior Court Rules Delay Rentals Limited to the Initial Term of the Lease in Hite v. Falcon Partners
The Pennsylvania Superior Court ruled on an appeal from the Cambria County Court of Common Pleas regarding a lease dispute that revolved around delay rental payments. Falcon Partners attempted to extend their rights under the lease five years beyond the primary term by paying the delay rental at a rate of $2.00 per acre per day rather than developing the land and paying royalties. The Superior Court ruled that delay rentals function to relieve the lessee of the obligation to develop the leasehold during the primary term of the lease; beyond the primary term the mere payment of delay rentals will not protect a lessees drilling rights. Accordingly, the Plaintiff-Landowners were free to sign another lease. To read the entire decision, please view the Opinion.