Utah Real Estate law

After Acquired Title

Utah Code Ann. § 57-1-10 (2010)

While the after‐acquired title statute conveys title, the priority of competing interests is determined by Utah’s race‐notice principles. See id. §§ 57-3‐102 to -103.

Utah’s after-acquired title statute provides, in relevant part,

(1) If any person conveys any real estate by conveyance purporting to convey the real estate in fee simple absolute, and at the time of the conveyance the person does not have the legal estate in the real estate, but afterwards acquires the legal estate:

(a) the legal estate subsequently acquired immediately passes to the grantee, the grantee’s heirs, successors, or assigns; and

(b) the conveyance is as valid as if the legal estate had been in the grantor at the time of the conveyance.

Utah Code Ann. § 57-1-10(1)(a)-(b). Pursuant to the statute, “a conveyance made by a grantor not holding fee title to property is binding when the grantor later obtains fee title.” Arnold Indus., Inc. v. Love, 2002 UT 133, ¶ 16, 63 P.3d 721.

“Utah Farm illustrates that the after‐acquired title statute conveys title in the condition as it exists at the time title is acquired by the previously titleless grantor.” FDIC v. Taylor, 2011 UT App 416.

FDIC v. Taylor, 2011 UT App 416 says:

Third, this result is consistent with the rationale of the after‐acquired title statute, which is premised on the concept of estoppel by deed. See Arnold Indus., Inc. v. Love, 2002 UT 133, ¶ 16, 63 P.3d 721 (citing Hall v. Fitzgerald, 671 P.2d 224, 228 (Utah 1983) (noting that the after-acquired title statute “has codified in part the equitable doctrine of estoppel by deed”)).

[W]here there is in the deed an express or implied representation that the grantor at the time of his conveyance was possessed of the title which his deed purports to convey, if such representation is false, whether he committed a fraud or was acting under an honest mistake, he is estopped from denying that he has a title; and, consequently, if he afterwards acquire[s] the title, he cannot by setting it up defeat his own grant.

Dowse v. Kammerman, 122 Utah 85, 246 P.2d 881, 882 (1952). The premise of the deed by estoppel rule is to prevent a grantor without title from later challenging his own conveyance of the property. See Annotation, Nature of Conveyance or Covenants Which Will Create Estoppel to Assert After‐Acquired Title or Interest in Real Property, 58 A.L.R. 345 (1929) (“It is a general rule, supported by many authorities, that a deed purporting to convey a fee simple, or a lesser definite estate in land, and containing covenants of general warranty of title or of ownership, will operate to estop the grantor from asserting an after‐acquired title or interest in the land, or the estate which the deed purports to convey, as against the grantee and those claiming under him.”). Where a purchaser obtains title from the actual owner of the property, the theory of deed by estoppel is inapplicable because that owner did not attempt to sell property he did not own. Consequently, there is no equitable reason for the “wild” deed from a titleless grantor to work as an estoppel of the valid deed obtained from the record owner.

FDIC v. Taylor, 2011 UT App 416, ¶ 52:

The after‐acquired title statute operates to convey interests in property but does not supplant the recording statute for purposes of determining the priority of competing interests in real property. Any conveyance of after-acquired title pursuant to the statute is transferred in the condition it exists at the time that title is acquired by the formerly titleless grantor.