Did a Kentucky deed for a nominal amount still need to state the property's estimated fair cash value?

Plain-English summary

In 1996, Kentucky's Attorney General said a deed transferring real property for a gift or for nominal or no consideration had to include a sworn, notarized certificate stating the property's estimated fair cash value. A gift had to be identified as a gift; a transfer for a token payment still needed the value statement even though it was not described as a gift.

The question arose because the final wording of KRS 382.135(1)(d) could be read, on its own, to tie the value statement only to gifts. The AG read the subsection as a whole: its opening words covered both gifts and transfers with nominal or no consideration. Reading the value requirement as limited to gifts would make the express reference to nominal consideration ineffective.

Currency note

This opinion was issued in 1996. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

Property owners transferring land without a full price

The opinion applied the certificate requirement to deeds made as gifts and deeds made for nominal or no consideration. It said the estimated fair cash value belonged in the certificate in either case. Only a gift needed the added statement that the transfer was by gift.

People preparing or reviewing deeds

The AG quoted KRS 382.135(1)(d)'s requirement for a sworn, notarized certificate signed by the grantor and grantee or their agents, with special signing language for a minor's parent or guardian. He interpreted the value clause in light of the subsection's opening words rather than reading it alone.

Common questions

Did a token sale price avoid the value statement in a Kentucky deed?
The AG said no. In the statute he analyzed, nominal consideration still triggered a certificate stating the property's estimated fair cash value.

Did a gift deed need the same value statement?
Yes. The AG said a gift deed required the estimated fair cash value and a statement that the transfer was by gift.

Why did the AG read the clause this way?
The subsection expressly addressed gifts and nominal or no consideration at its start. Limiting the value statement to gifts would leave the other words without a function, the AG reasoned.

Background and statutory framework

The opinion construed KRS 382.135(1)(d) within KRS 382.135(1). It cited Miller v. Commonwealth for the principle that a statute should be read consistently with its scope and not partly rendered ineffective. On that reading, the estimated-value certificate applied to both types of transfer named in the opening clause.

Citations and references

• KRS 382.135(1)
• KRS 382.135(1)(d)
• Miller v. Commonwealth, 300 Ky. 215, 187 S.W.2d 837, 838 (1945)

Source

• Landing page: https://www.ag.ky.gov/Resources/Opinions/Opinions/OAG96-021.htm

Original opinion text

OAG 96-21

April 26, 1996

Subject: Whether deed involving transfer of real property for nominal consideration must contain a statement of the estimated fair cash value of the property.

Written by: Gerard R. Gerhard

Requested by: Hon. H. B. Quinn, Trigg County Attorney

Syllabus: A deed conveying real property, whether by gift, or with nominal or no consideration, must contain, in addition to other information required by law, a statement of the estimated fair cash value of the property.

OAGs cited: None

Statutes Construed: KRS 382.135(1), KRS 382.135(1)(d)

OPINION OF THE ATTORNEY GENERAL

The question has been posed, in substance, as to whether a deed transferring real property for nominal or no consideration must contain a sworn, notarized certificate setting forth the estimated fair cash value of the property.

In our view the answer is yes. Discussion follows.

The question here arises from specific wording within KRS 382.135(1)(d), which might be read as requiring a statement of the estimated fair cash value of property only in the case of a deed involving a transfer by gift.

KRS 382.135(1) provides:

In addition to any other requirement imposed by law, a deed to real property shall contain the following:

(a) The mailing addresses of the grantor and grantee;

(b) A statement of the full consideration; and

(c) In the case of a transfer other than by gift, or with nominal or no consideration a sworn, notarized certificate signed by the grantor or his agent, or the parent or guardian of a person under eighteen (18) years old, that the consideration reflected in the deed is the full consideration paid for the property; or

(d) In the case of a transfer either by gift or with nominal or no consideration, a sworn, notarized certificate signed by the grantor or his agent and the grantee or his agent, or the parent or guardian of a person under eighteen (18) years old, stating that the transfer is by gift and setting forth the estimated fair cash value of the property.

(Emphasis added.)

If the last clause of KRS 382.135(1)(d) is read in isolation from the rest of the subsection in which it appears, it can be read as requiring a statement of the estimated fair cash value of property only in the case of a deed stating that the transfer is by gift. We believe this clause cannot be properly read or interpreted in this way (in isolation from the rest of the statutory subsection in which it appears).

In Miller v. Commonwealth, 300 Ky. 215, 187 S.W.2d 837, 838 (1945), Kentucky's then highest court commented with respect to statutory construction that:

[I]t is the general rule that a statute shall be interpreted so as to render it consistent with its general scope, and should not be construed in such manner as to render it partly ineffective and inoperative.

The opening clause of KRS 382.135(1)(d) speaks to a transfer “either by gift or with nominal or no consideration.” The closing clause of the subsection, in our view, must be read in light of the opening clause which establishes the scope of application of the subsection. That scope of application is applicable, in our view, to a transfer either by gift or with nominal or no consideration. Reading the last clause of KRS 382.135(1)(d) in light of the first clause of the subsection results in the understanding that if the transfer of property is by gift, such fact is to be specifically stated and that with respect to a transfer either by gift or with nominal consideration, the estimated fair cash value of the property is to be stated in the certificate required by the subsection. Such reading is consistent also with KRS 382.135(1)(c), which calls for a statement of consideration with respect to a transfer by gift or with nominal consideration, and appears to be intended to parallel the requirement of KRS 382.135(1)(d), regarding estimated fair cash value.

Explained another way, if the legislature intended by KRS 382.135(1)(d) to require a statement of the estimated fair cash value of property being transferred only in the case of a transfer by gift, and that such requirement did not apply to a transfer with nominal or no consideration, it would have been unnecessary to make reference to a transfer with nominal or no consideration. If such interpretation were correct, the phrase “or with nominal or no consideration” as used in KRS 382.135(1)(d) would have no application.

We believe the clear purpose of KRS 382.135(1)(d), as indicated by its express terms, is to address both a transfer by gift and a transfer with nominal or no consideration. In the case of a transfer by gift, the fact of a transfer on such basis is to be specifically indicated in the required certificate. At the same time, in the case of either a transfer by gift or a transfer with nominal or no consideration, a statement of the estimated fair cash value of the property is to be set forth in the required certificate.

A. B. CHANDLER III

ATTORNEY GENERAL

GERARD R. GERHARD

ASSISTANT ATTORNEY GENERAL