Ralph A. Kemnitz

Haakon County States Attorney

P.O. Box  489

Phillip ,  SD    57567-0489

OFFICIAL OPINION NO. 03-06

(This opinion replaces the opinion issued  September 10, 2003 .)

SDCL 43-28-23

Dear Mr. Kemnitz:

You have requested an opinion from this Office concerning the following factual situation:

      FACTS:

Effective  July 1, 2002 , the format standards for a "real estate document" recorded with a register of deeds changed.   SDCL 43-28-23 requires that a real estate document meet certain requirements as to margins, size and weight of paper, type size, and title, among other things.   SDCL  7-9-15 (1) provides that if a "real estate document" is recorded which does not conform to SDCL 43-28-23, a $10.00 fee is added to the ordinary statutory recording fees required under SDCL  7-9-15 (1).

A question has arisen as to what constitutes a "real estate document."   For example, a power of attorney may be recorded with the register of deeds, and people are frequently advised to do so and obtain certified copies because banks, the Internal Revenue Service, etc., frequently require the original power of attorney or a certified copy be on file or attached to an instrument executed by an attorney-in-fact.    See, for example, SDCL 59-7-2.2.   Clearly, a power of attorney may or may not relate to real estate transactions.

Further there is a question of the applicability of SDCL 43-28-23 to documents prepared years before the effective date of the statute and placed in escrow for future delivery, as in the case of a contract for deed where the deed is placed in escrow for delivery following final payment.   At the time the deed was prepared, executed and placed in escrow, there were no formatting requirements.   The issue is whether the register of deeds may now charge the additional $10.00 fee under SDCL  7-9-15 (1) for such a non-conforming instrument when it is recorded.

Based on these facts you have asked the following questions.

QUESTIONS:

1.  What constitutes a "real estate document" under SDCL 43-28-23?

2.  Is a document that was placed in escrow prior to the  July 1, 2002 effective date of SDCL 43-28-23 subject to the additional $10.00 fee under SDCL  7-9-15 (1) because it does not conform to SDCL 43-28-23?

IN RE QUESTION NO. 1 :

The 2001 Legislature saw fit to enact formatting requirements for real estate documents recorded in the office of the register of deeds.  The statute, SDCL 43-28-23, became effective  July 1, 2002 , and it is that version of the statute that served as the basis for your inquiries.  SDCL 43-28-23 was amended by the 2003 Legislature, however, and now provides as follows:

Any real estate document recorded with the register of deeds, except for plats, shall:

(1)  Consist of one or more individual sheets measuring no larger than 8.5 inches by 14 inches and no smaller than 8.5 inches by 11 inches. No sheet may be attached or affixed to a page that covers up any information or printed material on the document. Any continuous document or any document sheets that are stapled, glued, or bound together are subject to the additional fee established pursuant to subdivision  7-9-15 (1);

(2)  Be printed, typewritten, or computer generated in black ink and the print type of the document may not be smaller than 10-point type; 

(3)  Be on white paper of not less than twenty pound weight;

(4)  Contain a blank space at the top measuring no less than three inches as measured from the top of the first page. The right half shall be used by the register of deeds for recording information and the left half shall be used by the document preparer as required pursuant to § 7-9-1 and may include a return designation and address. All other margins shall be a minimum of one inch;

(5)  Have a title prominently displayed at the top of the first page below the blank space referred to in subdivision (4) of this section;

(6)  Be sufficiently legible to reproduce a readable copy using the register of deed's current method of reproduction; and

(7)  Conform to the standards provided in this section or be subject to the increased fees as provided in § 7‑9‑15.

      However, the register of deeds may not charge an increased fee for any document that has a seal or stamp in a margin.    Any affidavit of publication, corner record, survey, certified court or governmental document, and UCC form recorded against real estate is exempt from the provisions of this section.   Any plat or survey and certified vital record attached to documents is also exempt from the provisions of this section.

     The provisions of this section do not apply to any real estate document prepared and executed prior to  July 1, 2002 .

The Legislature further provided that an extra $10.00 filing fee   would have to be paid if a real estate document which did not conform to the formatting requirements of SDCL 43-28-23 was recorded.   SDCL  7-9-15 (1) provides:

The register of deeds shall charge and receive the following fees:

(1)   For recording deeds, mortgages, and all other instruments not specifically provided for in this section or this code, the sum of ten dollars for the first page and two dollars for each additional page or fraction thereof.    Each rider or addendum shall be considered as an additional page.   If a real estate document recorded with the register of deeds does not conform to § 43-28-23, the sum of ten dollars shall be charged in addition to the fees specified in this subdivision; . . . .

Nowhere in the code, however, is the phrase "real estate document" defined.  The question then is what the Legislature intended when it used that phrase.

The purpose of statutory construction is to discover the true intention of the law which is to be ascertained primarily from the language expressed in the statute.   The intent of a statute is determined from what the legislature said, rather than what the courts think it should have said, and the court must confine itself to the language used.    Words and phrases in a statute must be given their plain meaning and effect.    When the language in a statute is clear, certain and unambiguous, there is no reason for construction, and the Court’s only function is to declare the meaning of the statute as clearly expressed.   Since statutes must be construed according to their intent, the intent must be determined from the statute as a whole, as well as enactments relating to the same subject.

Martinmaas v. Engelmann , 2000 S.D. 85, ¶49, 612 N.W.2d 600, 611.

It is apparent that the Legislature did not intend that all documents that are recorded would have to comply with SDCL 43-28-23.   The statute by its terms only applies to the recording of real estate documents.    Not all documents that are recorded at the register of deeds office can be categorized as real estate documents.    The Legislature has already specifically exempted certain documents which could be categorized as real estate documents.    An affidavit of publication, corner record, survey, certified court or governmental document, or UCC form recorded against real estate is exempt from SDCL 43-28-23.   Likewise, any plat or survey or certified vital record attached to documents is exempted.

As you point out, however, there are other documents that are recorded with the register of deeds that may or may not be real estate documents.   For example, a power of attorney may be recorded under SDCL 59-7-2.2.    While the power of attorney may deal with real estate in some instances, it is equally as likely that a power of attorney will deal with health care decisions totally unrelated to real estate.   Thus, not all recorded documents need comply with SDCL 43-28-23.

What did the Legislature intend?   Some examples of real estate documents are obvious.    Deeds, mortgages, contracts for deed, leases, easements, and mechanics’ and materialmens’ liens are certainly real estate documents.   Some documents are obviously not real estate documents, such as certificates of discharge of veterans recorded under SDCL 33-17-14, orders of appointment under SDCL 43-28-4(4), or the minutes of the meetings of public bodies under SDCL 43-28-4(4).

Others documents are more difficult to categorize, including the power of attorney example you raise.  In some instances those documents deal with real estate, but in other instances they do not.

SDCL 43-28-1 offers an indication of legislative intent in defining real estate document.   That statute addresses what documents may be recorded, and provides that "[a]ny instrument affecting title to or possession of real property may be recorded."    When it adopted SDCL 43-28-23, the Legislature was well aware that a real estate document was the type of document that would typically be presented to the register of deeds for recording.    Indeed it exempted several kinds of documents that are recorded and affect title or possession of real estate from the reach of the statute.   It is my opinion that when the Legislature used the phrase "real estate document," it meant a document "affecting title to or possession of real property."

I appreciate that this may not be of much assistance to a register of deeds in a practical sense in terms of deciding when to charge the extra fee if a document does not conform to SDCL 43-28-23.   However, a register of deeds must in any event decide if an instrument affects title to or possession of real property in order to determine whether something may be recorded, and those instruments are largely defined in statute already.   What makes this different is that not all instruments that are entitled to be recorded are real estate documents.

This office has on several occasions opined that the function of a register of deeds in recording documents is basically ministerial, and he or she is not obliged to delve into the legalities of the instruments presented.   See , e.g. ,    AGR 90-22.    There are times, however, that a register of deeds does have to make determinations based on a facial examination of a document.    For example, if a certificate of value is required (AGR 87-40) or if a document lacks legal authorization (AGR 84-27).   Here the register of deeds will have to determine, based on a facial examination of the document, whether it affects title to or possession of real property.

IN RE QUESTION NO. 2 :

Your second question is whether SDCL 43-28-23 applies to real estate documents that were placed in escrow prior to the  July 1, 2002 effective date of the statute, but are recorded after  July 1, 2002 .   As it related to real estate documents prepared and executed prior to July 1, 2002, but offered for filing after July 1, 2003, that question is answered by the 2003 amendments to SDCL 43-28-23, which now provides:   "The provisions of this section do not apply to any real estate document prepared and executed prior to July 1, 2002."

As to real estate documents prepared and executed prior to  July 1, 2002 , and offered for filing after  July 1, 2002 , but prior to  July 1, 2003 , the answer is Yes.   As a general proposition, a newly enacted statute will not be given a retroactive effect unless such an intention is plainly expressed by the Legislature.   SDCL  2-14-21 ; Beers v.  Pennington   County , 2000 SD 107, 616 N.W.2d 79, ¶ 13.  If a new statute deals only with procedural rather than substantive matters, however, it may have retroactive impact.

The general rule is that newly enacted statutes will not be given a retroactive effect unless such an intention is plainly expressed by the legislature.   . . . .    However, statutes which affect only procedural matters, as opposed to substantive rights, are given retroactive effect.    . . .   Where a new statute deals only with procedure, it applies to all actions, including those which have already accrued or are pending, as well as those which arise after enactment of the statute.

State v. Galligo , 1996 SD 83, 551 N.W.2d 303 ¶6, quoting Dahl v. Sittner, 474 N.W.2d 897, 901 (SD 1991)(Citations omitted).

Assuming for the sake of argument that your question raises issues of retroactive application, it is my opinion that imposing format requirements for a document to be recorded is a procedural matter.   It is important to keep in mind what event the statute applies to.    The statute deals with real estate documents that are offered for recordation.   The fees in SDCL  7-9-15 apply to documents when those documents are recorded, not when they are prepared.   While there seems to be an unfairness in imposing the new requirement on documents that essentially cannot be altered because they were in escrow at the time the law took effect, the Legislature obviously realized that there would be documents that did not comply.   That is why SDCL  43-28-23(7) provides that real estate documents must conform to the statute’s requirements or the extra fee must be paid.

This is not a situation such as that discussed in AGR 69-15 concerning the real estate transfer fee.   The transfer fee applies to the privilege of transferring real property.    The opinion dealt with transfers that transpired prior to the effective date of the law imposing the transfer fee.    This office opined that a deed predating the law was not subject to the transfer fee even though it was recorded after the effective date of the law.   The event taxed, if you will, occurred prior to the law implementing the tax.

Here, however, the fee is charged for recording a document.   That is the event at issue, and in that regard the statute is being only applied prospectively.   The fee applies to all nonconforming real estate documents prepared and executed prior to  July 1, 2002 , and offered for recording after  July 1, 2002 but prior to  July 1, 2003 .   When the Legislature intends that a particular act with reference to a document be governed the law in effect at the time the act was performed, it clearly knows how to do so.    See, SDCL 43-28-13.

My answer to your second question as it relates to real estate documents prepared and executed prior to July 1, 2002, but offered for filing after July 1, 2003 is NO, because by virtue of the 2003 amendments to SDCL 43-28-23 the new formatting requirements do not apply.  My answer to your second question  as it relates to real estate documents prepared and executed prior to  July 1, 2002 , and offered for recording after  July 1, 2002 but prior to  July 1, 2003 is YES, the formatting requirements of SDCL 43-28-23 do apply.

Respectfully submitted,

LARRY LONG

ATTORNEY GENERAL

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