Updated on December 6, 2024
The After-Acquired Title Doctrine is a legal principle requiring that title automatically vests to the grantee of a deed when a grantor conveys an interest in real property that they do not own at the time of the conveyance but subsequently acquires title. It applies in situations where the deed purports to transfer a greater title or estate in property than what the seller actually possesses. The doctrine prevents sellers from benefiting after selling or transferring their interest to another party.
Example 1: Inherited Property and After-Acquired Title
For instance, consider a seller named Selina, who believes she owns real property inherited from her mother. She signs, notarizes, and records a deed transferring the property to a buyer, Betty. However, Selina does not actually own the property at the time. Later, when Selina’s mother passes away, Selina legally inherits the property. Under the After-Acquired Title Doctrine, the title automatically vests in Betty, making her the legal owner.
Example 2: Oil Royalty Interests and the Doctrine’s Application
Another example involves a seller who owned property subject to oil drilling leases and recorded a gift of the oil royalty interests to her daughter. Later, she sold the property without mentioning the royalties. The title company acknowledged the oil leases but omitted the royalty gift. After a dispute arose, the seller reacquired the royalty interests to file a quiet title action. The court held that under the After-Acquired Title Doctrine, the royalty interests had passed to the buyer, regardless of the seller’s motive.
The After-Acquired Title Doctrine offers protection to buyers by ensuring that their ownership rights are upheld, even if the seller perfects their ownership of the property after the sale. This doctrine also places responsibility on the seller to resolve any title deficiencies, as any future acquisition of title will automatically vest in the buyer.
The After-Acquired Title Doctrine is grounded in both common law and statutory law. In California, Civil Code Section 1106 codifies this doctrine, stating that when a grantor purports to grant real property in fee simple and later acquires title, the title automatically passes to the grantee. However, the statutory rule applies only to grants of a fee simple estate. If a grantor conveys a lesser estate, such as a life estate, the doctrine does not apply.
The common law rule is based on estoppel, meaning it does not apply if the grantee knows the grantor does not have full title at the time of the sale. In contrast, California’s statutory rule is not based on estoppel, meaning the doctrine may apply even if the grantee is aware of the seller’s title deficiency.
Buyers should be aware that the After-Acquired Title Doctrine does not apply in all cases. It does not protect buyers if the seller cannot acquire legal ownership rights in the property at all. Additionally, the doctrine does not apply to quitclaim deeds. A quitclaim deed only transfers the interest the grantor possesses at the time of the grant and does not convey after-acquired title.
It’s crucial for buyers to verify title issues before completing any real estate transaction to ensure they are protected. The After-Acquired Title Doctrine provides an additional layer of security but has limitations that must be understood. Buyers should seek legal guidance to avoid unforeseen title defects.
Schorr Law, APC has extensive experience handling property ownership disputes involving title issues. To schedule a consultation with one of our attorneys and get a case evaluation, please call us at (310) 954-1877, or send us a message here.
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