Tag: warranty deed

In Georgia, Parol Evidence Admissible When Deed States”Other Valuable Consideration”

If you have bought or sold real estate in Georgia (and elsewhere), you have certainly seen the “purchase price” described in most deeds as follows:

Grantor, in consideration of One Dollar ($1.00) and the purpose recited herein, in hand paid at and before the sealing and delivery of these presents, the receipt of which is hereby acknowledged, by these presents does remise, convey, and forever QUITCLAIM unto said Grantee, the below described tract or parcel of land more fully and completely described as follows …

But what does “For value received” or “Ten dollars and other valuable consideration” mean, why is it used, and why isn’t the actual purchase price included in the deed? The nominal amount of one dollar (or ten dollars) is included to satisfy the consideration requirement to make a deed enforceable. Consideration means payment: one dollar or ten dollars satisfies this consideration requirement. The author has looked into why this is done and believes buyers and sellers use this language to conceal the price paid for the property on the public record. These deeds are recorded and available to the public. Using one dollar or ten dollars as the purchase price makes it more difficult to know the actual purchase price. Although the transfer tax can often determine the purchase price, this is not foolproof and adds another layer for an inexperienced examiner. Regardless of why it’s done, this language is used in virutually all deeds, including quitclaim and warranty deeds.

This issue came up recently in an interesting case. Please see Schaffer v. Collinsville Meadow Townhomes, A23A1382 (January 24, 2024). In that case, a seller quitclaimed his interest in property for “One Dollar ($1.00) and other valuable consideration, receipt whereof is hereby acknowledged.” Of course, a dispute arose, which included the seller claiming he had not been paid for conveying the property via the quitclaim deed.

The issue relevant to this blog was whether the seller could sue the buyer for nonpayment when the quitclaim deed did not include an actual purchase price. The Court of Appeals ruled that because the deed included the language “other valuable consideration,” the seller could introduce evidence outside the quitclaim deed to establish the purchase price. Such outside evidence is known as parol evidence. Succinctly stated, the Court explained that

As our Supreme Court has explained, the manner in which consideration is expressed in the quitclaim deeds [the seller] conveyed is a classic example of consideration merely by way of recital; and as a result, the details of such consideration are properly subject to further inquiry.

If you have any questions or are in a dispute regarding a real estate deed in Georgia, please get in touch with us at 404-382-9994 to discuss.

Interesting Homeowners’ Association Dispute

For Georgia real estate litigation nerds, a recent case issued by the Georgia Court of Appeals provides interesting reading. The case, Great Water Lanier, LLC v. Summer Crest at Four Seasons on Lanier Homeowners Association, Inc., A17A1810 (January 2, 2018), involves a convoluted dispute between an investor and a homeowners’ association (HOA). At issue were whether a property was subject to an HOA. The owner of the property asked a court in Hall County to find that the parcel was not subject to the HOA, while the HOA requested the opposite and asked that the property owner pay HOA dues.

The Court of Appeals recited well-settled Georgia law that a person that purchases property is bound by terms in the deed that conveys the property (whether the buyer likes it or not).

The warranty deed in question referred to the HOA, but did so in an arguably ambiguous way. In addition, there were documents signed by the parties that showed the property was not intended to be a part of the HOA. After applying the rules of contract construction to the warranty deed, the Court of Appeals determined the language was not ambiguous, and therefore the language referencing the HOA in the warranty deed controlled over any other documents.

The takeaway is to carefully examine the warranty deed and all other documents when purchasing property.