Deeds often include a $10 consideration as a nominal, symbolic amount primarily to prevent future title disputes, even when no actual money changes hands during the property transfer.
Understanding Nominal Consideration in Deeds
While many transactions involve a substantial purchase price, you'll frequently see deeds stating a consideration of "Ten Dollars ($10.00) and other good and valuable consideration." This isn't usually the true sale price but rather a common legal formality with a specific purpose.
- Not a Contract: Unlike a contract, which typically requires a mutual exchange of value (consideration) to be legally binding, a deed is a conveyance of property ownership. In many states, a deed does not legally require a specific consideration amount to be valid.
- Avoiding Title Disputes: The primary reason for including a nominal amount like $10 is to create a record of consideration. This practice is recommended to help avoid potential title disputes in the future. Even if property is transferred as a gift or between family members without an actual monetary exchange, reciting a nominal amount on the deed helps solidify the transfer and demonstrates that some form of consideration, however small, was acknowledged.
- Symbolic Value: This $10 is largely symbolic. It signifies that the transfer was not purely gratuitous (a gift with no expectation of anything in return) in a way that could be easily challenged later. It establishes the good faith of the transfer.
The Legal Framework
The inclusion of nominal consideration is a widely accepted practice in real estate law.
- State Regulations: While some states might have specific requirements, many do not legally mandate that a deed explicitly state a consideration amount for the transfer to be valid. However, including it is a best practice.
- Proof of Intent: By listing a nominal consideration, the deed clearly indicates an intent to transfer ownership. This small stated amount helps solidify the legal enforceability of the conveyance.
In essence, the $10 consideration serves as a legal placeholder, a small but significant detail that reinforces the legitimacy of a property transfer and helps safeguard against future challenges to the property's title.
