Does Virginia's $1 open-space recordation fee on 'deeds' apply to deeds of trust and leases?

Plain-English summary

Section 58.1-817, part of the Virginia Recordation Tax Act, imposed a $1 fee on every "deed" admitted to record in a jurisdiction in which the Virginia Outdoors Foundation ("VOF") held open-space easements. The fee funded open-space preservation. The statute did not define "deed." VOF's executive director asked whether deeds of trust and leases counted as "deeds" for purposes of the fee.

The AG concluded yes. Because § 58.1-817 used a legal term of art without defining it, the term should be read in its established legal sense. Under Virginia case law and standard reference works (American Net and Twine Co. v. Mayo, 97 Va. 182 (1899); Black's Law Dictionary), a "deed" is a written, signed, sealed, and delivered instrument that conveys some interest in real property. A deed of trust qualifies because it transfers legal title from a borrower to a trustee, and the Supreme Court of Virginia confirmed that point in Deutsche Bank Nat'l Trust Co. v. Arrington, 290 Va. 109 (2015), in the context of the after-acquired property statute. A lease qualifies because it conveys the right to use and occupy real property in exchange for consideration, and § 55-57 itself uses the form "deed of lease."

Whether any other particular instrument constitutes a "deed" is a fact-specific question the AG declined to answer.

Currency note

This opinion was issued in 2016. 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.

The Title 55 real-property chapters were reorganized into Title 55.1 in 2019. Section 58.1-817 itself remained in the recordation-tax title at the time, but anyone calculating fees today should verify the current statutory text, the current fee amount, and whether the Virginia Outdoors Foundation still holds easements in the relevant jurisdiction.

Background and statutory framework

Section 58.1-817 imposed a recordation fee on top of the standard recordation tax in jurisdictions where VOF held open-space easements. The clerk of the circuit court collected the fee, which was then distributed to VOF to be used for its statutory purposes under § 10.1-1800. The narrow legal question was whether "deed," undefined in the statute, should be read narrowly (the conveyance of fee simple title only) or broadly (any instrument transferring some interest in real property).

The AG applied a long-settled rule of statutory construction: when a word with a known legal meaning is used in a statute, courts presume that meaning was intended absent some contrary indication (citing The American & English Encyclopedia of Law and Roberson v. Wampler, 104 Va. 380, 382 (1905)). Virginia's Supreme Court had described a deed as "the method by which title of real estate is transferred from one person to another" (American Net and Twine Co. v. Mayo, 97 Va. 182, 186 (1899)). Black's Law Dictionary defined a deed as "[a] written instrument by which land is conveyed [or] any written instrument that is signed, sealed, and delivered and that conveys some interest in property." The Restatement of Property similarly treated a deed as a written instrument transferring some interest in real estate.

On deeds of trust, the AG pointed to Deutsche Bank Nat'l Trust Co. v. Arrington, 290 Va. 109 (2015), in which the Supreme Court of Virginia, addressing § 55-52 (Virginia's after-acquired property statute), held that deeds of trust qualify as "deeds." Because a deed of trust conveys legal title to a trustee on behalf of a lender, with the borrower retaining equitable title (Lawyers Title Ins. Corp. v. Wells, 254 Va. 388 (1997); High Knob Assocs. v. Douglas, 249 Va. 478 (1995); Everette v. Woodward, 162 Va. 419 (1934)), the instrument clearly transfers an interest in property and so falls within the legal definition.

On leases, the AG observed that a lease conveys a tenant's right to use and occupy real property and that § 55-57 of the Code provided the form for a "deed of lease," confirming that Virginia treats a lease as an instrument that conveys an interest in property.

The AG declined to opine on any other instrument types, noting that whether some other recorded instrument qualifies as a "deed" turns on the terms of the particular instrument and is a question of fact.

Common questions

Q: Did the opinion mean every deed of trust and every lease recorded statewide had to pay the $1 fee?
A: Only in jurisdictions where the Virginia Outdoors Foundation held open-space easements. Section 58.1-817 was limited to those jurisdictions.

Q: Why did the opinion turn so heavily on Deutsche Bank v. Arrington?
A: Because that case was the Supreme Court of Virginia's most recent and most direct ruling on whether the word "deed," as used in a Virginia statute, included deeds of trust. The Arrington Court answered yes and cited the same dictionary definitions the AG was applying.

Q: Did the opinion address mortgages, easements, or other instruments?
A: The opinion expressly answered only for deeds of trust and leases. For any other instrument, the AG said the question turns on the particular terms and is fact-bound; the office consistently declined to issue official opinions on specific factual matters.

Q: Did the AG suggest anything about the policy reason for the fee?
A: The opinion was strictly a statutory-interpretation answer. It framed the fee's purpose as helping fund VOF's open-space preservation mission, but did not weigh in on policy.

Citations and references

Statutes:
- Va. Code Ann. § 58.1-817 (open-space preservation recordation fee)
- Va. Code Ann. § 55-52 (after-acquired property statute)
- Va. Code Ann. § 55-57 (deed-of-lease form)
- Va. Code Ann. § 10.1-1800 (Virginia Outdoors Foundation, body politic)
- Va. Code Ann. § 2.2-505 (AG advisory opinion authority)

Cases:
- Deutsche Bank Nat'l Trust Co. v. Arrington, 290 Va. 109 (2015)
- American Net and Twine Co. v. Mayo, 97 Va. 182 (1899)
- Roberson v. Wampler, 104 Va. 380 (1905)
- Lawyers Title Ins. Corp. v. Wells, 254 Va. 388 (1997)
- High Knob Assocs. v. Douglas, 249 Va. 478 (1995)
- Everette v. Woodward, 162 Va. 419 (1934)

Attorney General opinions:
- 2002 Op. Va. Att'y Gen. 18
- 2009 Op. Va. Att'y Gen. 80

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2016/15-081-Glymph-issued.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Mark R. Herring
Attorney General

September 1, 2016

Ms. Brett C. Glymph
Executive Director, Virginia Outdoors Foundation
39 Garrett Street, Suite 200
Warrenton, Virginia 20186

Dear Ms. Glymph:

I am responding to your request for an official advisory Opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You ask whether the term "deed" as used in § 58.1-817 of the Code of Virginia should be construed to include any instrument conveying an interest in real property, including deeds of trust and leases for purposes of determining when certain fees imposed upon deed recordation are proper.

Applicable Law and Discussion

Section 58.1-817, a provision of the Virginia Recordation Tax Act, establishes a $1 fee to help provide state funding for open-space preservation. This fee is imposed on "every deed admitted to record in those jurisdictions in which open-space easements are held by the Virginia Outdoors Foundation" ["VOF"]. [1] When a deed is recorded in one of these jurisdictions, the circuit clerk collects the fee, which is later distributed to the VOF for the agency to "accept, hold and administer . . . in accordance with its purposes and powers." [2]

While it imposes an open-space preservation fee on "deeds" recorded in certain jurisdictions, § 58.1-817 does not define that term. It is well-established, however, that "[w]hen a word which has a known legal meaning is used in a statute[,] it must be assumed that the term is used in its legal sense, in the absence of an indication of a contrary intent." [3] The Supreme Court of Appeals of Virginia has stated, "A deed is the method by which title of real estate is transferred from one person to another." [4] Black's Law Dictionary defines a deed as "[a] written instrument by which land is conveyed [or] any written instrument that is signed, sealed, and delivered and that conveys some interest in property." [5] Under the Restatement of Property, a "deed" is a written instrument that transfers some form of interest (or "title") to real estate, whether the interest conveyed constitutes the full bundle of sticks commonly conceived of as full ownership of real property, or only a portion thereof. [6]

With respect to a deed of trust, about which you inquired, I note that, as a loan security instrument, it conveys legal title in real property from a borrower to a trustee, who holds the title on behalf of the lender until the loan is repaid, [7] with the borrower retaining equitable title. [8]

The Supreme Court of Virginia's recent decision in Deutsche Bank v. Arrington [9] considered whether deeds of trust constitute "deeds" for purposes of § 55-52, Virginia's after-acquired property statute. In holding that they do constitute deeds, the Court cited Black's Law Dictionary approvingly for the proposition that a "deed" includes "'any written instrument that is signed, sealed, and delivered and that conveys some interest in property,'" [10] further noting that nothing in the relevant chapter of the Code "indicates that the General Assembly intended to restrict the meaning of the word 'deed' . . . to exclude deeds of trust." [11] It is thus established under Virginia law that a deed of trust is a type of "deed."

With respect to leases, that term is defined in Black's Law Dictionary as "a contract by which a rightful possessor of real property conveys the right to use and occupy the property in exchange for consideration." [12] Section 55-57 of the Code of Virginia provides the form for a "deed of lease." It is thus evident that a lease falls within the definition of "deed," as set forth above, in that it is a "written instrument that conveys some interest in property." [13]

Finally, whether any other instrument should be deemed a "deed" under § 58.1-817 is a question determined by applying the established legal definition of "deed" set forth above to the terms of the particular instrument. It is, therefore, a question of fact. Attorneys General consistently have declined to render official opinions on specific factual matters. [14]

Conclusion

Accordingly, it is my opinion that the term "deed" as used in § 58.1-817 should be construed to include deeds of trust and leases, so long as the instruments are recorded in a jurisdiction in which open-space easements are held by the Virginia Outdoors Foundation. I express no opinion about whether any other type of instrument is a "deed" for this purpose.

With kindest regards, I am

Very truly yours,

Mark R. Herring
Attorney General

[1] VA. CODE ANN. § 58.1-817 (2013). I note that the Virginia Outdoors Foundation is a body politic "established to promote the preservation of open-space lands and to encourage private gifts of money, securities, land or other property to preserve the natural, scenic, historic, scientific, open-space and recreational areas of the Commonwealth." VA. CODE ANN. § 10.1-1800 (2012).

[2] VA. CODE ANN. § 58.1-817.

[3] THE AM. & ENGLISH ENCYCLOPEDIA OF LAW 607 (David S. Garland & Lucius P. McGehee eds., 2nd ed. 1904); see also, e.g., Roberson v. Wampler, 104 Va. 380, 382 (1905) (discussing the "well-settled rule of construction that ... unless [a contrary intention is manifest], ... words of a definite legal signification are to be understood as used in their definite legal sense").

[4] American Net and Twine Co. v. Mayo, 97 Va. 182, 186 (1899).

[5] BLACK'S LAW DICTIONARY 501 (Bryan A. Garner et al. eds., 10th ed. 2014) (emphasis added); see also 2002 Op. Va. Att'y Gen. 18, 22 n.3 ("A 'deed' is defined at common law as 'any written instrument that is signed, sealed, and delivered and that conveys some interest in property.'").

[6] See, e.g., RESTATEMENT (FIRST) OF PROP. § 10, note on the use of the word "title" in the Restatement (discussing "title" generally as a term used to denote the existence of a specified interest in land) (AM. LAW INST. 1936); Am. Net & Twine Co. v. Mayo, 97 Va. 182, 186 (1899) (stating a deed "is the method by which the title of real estate is transferred").

[7] See, e.g., Lawyers Title Ins. Corp. [v. Wells], 254 Va. 388, 392 (1997).

[8] See, e.g., High Knob Assocs. v. Douglas, 249 Va. 478, 484 n.4 (1995); Everette v. Woodward, 162 Va. 419, 426 (1934).

[9] 290 Va. 109 (2015).

[10] Id. at 116 (quoting BLACK'S LAW DICTIONARY 501 (Bryan A. Garner et al. eds., 10th ed. 2014)).

[11] Id.

[12] BLACK'S LAW DICTIONARY 1024 (Bryan A. Garner et al. eds., 10th ed. 2014).

[13] See supra note 5.

[14] 2009 Op. Va. Att'y Gen. 80, 81 and n.17.