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Running Head: REAL ESTATE LAW 1Evaluation of Unfair Practices in the Leasehold MarketStudent NameCourse and Section NameInstitution AffiliationInstructor’s NameDue Date
Running Head: REAL ESTATE LAW 2Background to Leasehold LawThe Science of Insolvency: Hearing before the Subcomm. On Investigations and Oversight of theH. Comm. on Science and Technology, 111th Cong. (2009) (statement of Dean Baker, Co-Dir. For the Ctr. for Econ. And Pol’y Research). 47. See id. 48. See id. 49. See id, supra note 6; see also Alpert, supra note 8, for his proposal to have lenders accept deeds in lieu of foreclosure and then lease properties to former owners. 50. See typically Pakistani monetary unit Gelpern, Financial Crisis Containment, 41 CONN.L.REV. 1051, 1051 (2009) (arguing that financial crisis containment decisions made by the government are brief, predictable, and costly, and that mapping containment efforts will help reshape crisis policy debates and “make crisis response a lot of clear and accountable”). 51. As previously reviewed, these scholars considered some legal issues that take place after the auction of a foreclosed home, such as whether the lender can pursue a deficiency judgment and if the debtor has post-sale statutory redemption rights. See supra notes 17–32 and accompanying text. Some scholars in the United Kingdom and Israel haveexpressly incorporated shelter concerns into discussions of foreclosure law. The parties' lease contains the following provision concerning the payment of gas royalties:1IN CONSIDERATION OF THE PREMISES, the said Lessee covenants and agrees to pay to the Lessor a royalty for the gas produced and marketed from any gas well on the leased premises at the rate of one-eighth (1/8) part of the wholesale market value of such gas at the well based on the usual price paid therefor in the general locality of said leased premises.Chesapeake sells the gas at a market away from the well, which results in increased expenses, including gathering, compression, and treatment costs. See Schroeder v. Terra Energy, Ltd., 223 Mich. App. 176, 565 N.W.2d 887, 891 (1997)(noting that "natural gas is not typically sold at the wellhead"). Poplar Creek refers to these costs as "production costs," but they are more appropriately labeled post-production costs because these expenses are incurred after the gas leaves the wellhead. As Chesapeake notes, " production costs, like those incurred drilling, operating and maintaining a well, as well as other costs incurred in order to extract gas from the earth and bring it up to the wellhead, are borne entirely by Chesapeake, according to the Lease." Additionally, Kentucky imposes a 4.5% tax for the privilege of severing and/or processing natural resources. See Ky.Rev.Stat. § 143A.020 239.Chesapeake deducts these post-production costs from the price at which it sells the gas away from the well in order to calculate the market value of the gas "at the well." Poplar Creek alleges that these deductions are improper, and that the terms of the lease and Kentucky law require Chesapeake to bear all such costs itself. The district court agreed with Chesapeake and ruled that