After-acquired Title
The after-acquired title is used in property law when a property seller acquires the property’s title once they already sold the property to the buyer. In this situation, the title is automatically transferred to the buyer through the after-acquired title. The after-acquired title is held by the buyer as the seller only acquired the title once the property was already sold. Thus, the title can not go to the seller as they no longer own the property.
What is an After-acquired Title?
The after-acquired title’s legal doctrine is used when ownership of the property is transferred to its new owner. If the seller did not have the property’s legal title when the transaction took place but later acquired it, the property title is automatically vested to the new buyer.
Through the after-acquired title, the property can not be sold by the previous owner later on because the title states who the current owner is. Once the buyer has the after-acquired title, the seller can not claim ownership of the property against the buyer.
Exceptions from the After-acquired Title Doctrine
While it works as equitable relief for both parties involved in the property transaction, the after-acquired title has some limitations. The following rules should be taken into consideration whenever a transfer of property takes place for example in Texas.
- Limited to the conveyed estate - reserved estates, excepted interests, or interests that weren’t transferred are excluded;
- Limitation to oil and gas lease - mineral interest is excluded;
- Public Lands - tries to transfer public land by private individuals are excluded;
- Title acquired by trust - this is covered by subsequent title;
- Quitclaims - a quitclaim does not guarantee that the title passed is valid.
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