A small oil and gas company registers a 'surface lease' on a rural property, allowing them to access a well site. This lease would typically appear on the Certificate of Title as a type of:

Question: A small oil and gas company registers a 'surface lease' on a rural property, allowing them to access a well site. This lease would typically appear on the Certificate of Title as a type of:

Answer options:

• Fee simple ownership transfer.
• Restrictive covenant, limiting the owner's use of the land. ✅ Encumbrance, specifically a leasehold interest or a notation of a surface lease, which acts as a burden on the land use.
• Mortgage, securing a financial debt to the company.

Correct answer: Encumbrance, specifically a leasehold interest or a notation of a surface lease, which acts as a burden on the land use.

Explanation: A surface lease for oil and gas development is an interest in land that grants the company specific rights to use a portion of the land. It constitutes an encumbrance on the Certificate of Title, representing a burden or charge on the land that limits its free use or transfer by the owner, similar to an easement or right-of-way, but specifically for a leasehold interest.