Request By:
Ms. Patricia A. Merrifield
Estill County Deputy Clerk
Irvine, Kentucky 40336
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
On behalf of Ms. Dora Henry, Estill County Clerk, you request our opinion concerning the following three questions:
"1. Is it necessary that the signature of the grantor on a deed be notarized before we are allowed to accept it for recording?
"2. At the County Clerk's Convention this year, it was related that the late fee for financing statements is now to be charged after 20 working days from the date of execution. We are unable to find that in the statutes. Would you please give us the reference?
"3. In the case of recording a deed that is conveyed as a gift where the parties are not related or are related such as grandparents to grandchildren or aunt to niece, is there any deed tax due? If so, how is it determined?"
KRS 382.130 reads:
"Deeds executed in this state may be admitted to record:
"(1) On the acknowledgment, before the proper clerk, by the party making the deed;
"(2) By the proof of two (2) subscribing witnesses, or by the proof of one (1) subscribing witness, who also proves the attestation of the other;
"(3) By the proof of two (2) witnesses that the subscribing witnesses are both dead; and also like proof of the signature of one of them and of the grantor;
"(4) By like proof that both of the subscribing witnesses are out of the state, or that one (1) is so absent and the other is dead; and also like proof of the signature of one (1) of the witnesses and of the grantor; or
"(5) On the certificate of a county clerk of this state, or any notary public, that the deed has been acknowledged before him by the party making the deed or proved before him in the manner required by subsection (2), (3) or (4)."
KRS 382.300 imposes, as a condition for the clerk's recording, the requirement that the grantor's signature be acknowledged or proved before him as required by law.
The answer to question no. 1 is that the signature of the grantor must be acknowledged or proven, under one of the five alternatives as specifically outlined in KRS 382.130, if the deed is to be recordable. A deed which is not properly acknowledged or proven does not give constructive notice even if the deed is recorded. Thus where a deed lodged in your office was not properly acknowledged or proven (grantor's signature) as required by KRS 382.130 and 382.300, it is unrecordable, although it passes title between the parties where no intervening equities are affected.
Jones v. Driver, 282 Ky. 82, 137 S.W.2d 729 (1940) 731.
Judge Sampson, in the landmark case of Billington v. Dunn (important to title examiners, especially), 217 Ky. 164, 289 S.W. 213 (1926) 214, defined an acknowledgment:
"An acknowledgment, within the legislative meaning of that word, as employed in the act, is a formal declaration or admission before an authorized public officer by a person who has executed an instrument that such instrument is his act and deed. "
Concerning question no. 2, KRS 64.012 provides that for the filing and indexing an original or continuation financing statement, and noting the security interest on the required receipt for one motor vehicle, the county clerk is allowed a fee of six dollars ($6.00). KRS 355.9-403(5) provides in part that the uniform fee for filing and indexing an original financing or a continuation statement shall be as provided for in KRS 64.012. KRS 186.045(2) (affecting motor vehicles) provides in part that for filing the financing statement, the clerk shall collect a fee pursuant to KRS 64.012 from the secured party and, in addition, for noting the security interest on the required receipts, the clerk shall collect from the secured party a fee pursuant to KRS 64.012 for each additional motor vehcile included on the financing statement. As once all roads led to Rome, in this situation the statutory roads in this area lead back to KRS 64.012, cited above.
We are not aware of any statute providing for a late charge, meritorious it might otherwise be, except that KRS 186.045(3) provides that for failure to present both the current receipt and financing statement within the time prescribed by subsection (2)(a), the secured party shall pay a penalty of two dollars ($2.00) to the county clerk as a prerequisite for noting the security interest on the current receipt.
As relates to question no. 3 and the state tax on real estate transfers, pursuant to KRS 142.050, the tax is collectible under that statute where the deed is for nominal or unstated consideration and is a gift in reality as applies to a deed between grandparents to grandchildren or an aunt to a niece. KRS 142.050(8)(e) provides an exception to the tax if the deed is between husband and wife, or parent and child, with only nominal consideration.
Under subsection (2) of KRS 142.050, a tax is imposed upon the grantor named in the deed at the rate of fifty cents (50 ) for each five hundred dollars ($500) of value or fraction thereof, which value is declared in the deed upon the privilege of transferring title to real property. The value means under KRS 142.050(1)(b) 2. as follows:
"(2) In the case of a gift, or any deed with nominal consideration or without stated consideration, the estimated price the property would bring in an open market and under the then prevailing market conditions in a sale between a willing seller and a willing buyer, both conversant with the property and with prevailing general price levels."