Lenders now have bright line rules for the “full name” of grantors and grantees names in deeds to real property. An amendment to KRS 382.135, enacted by the 2017 Legislature, effective June 29, 2017, adopts the UCC Article 9 rules for the names of individual grantors and grantees, and the rules of KRS 365.015(b) and (c) for the names of domestic and foreign organizations.
The issue of what is the “full name” of a grantor and grantee in a deed arose last year as the result of an amendment to KRS 382.135(1). The amendment, buried at page 25 of a 27-page bill relating to “local code enforcement,” requires that a deed to real property contain “the full name of the grantor and grantee.”
The 2016 legislation set the new name requirement but offered no guidance on what constitutes the full name of individuals or businesses. At the request of title insurers, the Attorney General weighed in on the issue. In OAG 16-006, he opined that the requirement for a full name of an individual requires a “surname and some combination of a personal name or initials.” However, the AG did not address business names.
Because our courts are not bound by an Opinion of the Attorney General, and the lack of guidance on business names, the 2017 Legislature stepped in with more specific and binding guidance on what is a grantor’s or grantee’s full name.
Senate Bill 235 adds a new subsection (6) to KRS 382.135. By adopting the Article 9 standards, it provides that if an individual grantor or grantee holds an unexpired Kentucky driver’s license, their “full name” is the name as it is indicated on the license. KRS 355.9-503(d). If the individual does not have an unexpired Kentucky license, their “full name” is their “individual name” or their “surname and first personal name.” KRS 355.9-503(e).
The new name standards for individuals may be a shock to the world of real property but they are the same standards that have been the law of Kentucky since July 1, 2013, regarding personal property security.
The 382.135(6) standard for names of grantors and grantees who are not individuals are found at KRS 365.015(b) and (c). These rules, part of the chapter on trade practices, generally parallel the rules of UCC Article 9 and reference the formation documents for the name of an organization when it is a grantor or grantee in a deed. These rules provide more certainty as to the correct business name but will not change existing name standards.
For individuals, there will be a change in naming protocols. We recommend that a deed always include, even if as an additional name, the name in which an individual grantor took title to the property being conveyed if that name is different from their driver’s license name. For example, if a deed is to M. David Smith, but Mr. Smith’s driver’s license lists his name as Michael D. Smith, his name in a deed of conveyance should be Michael D. Smith, a/k/a M. David Smith.
For more information, please contact John T. McGarvey.