The Limits of After-Acquired Property Provisions
By statute, the conveyance of an interest in real property must be accomplished by deed. Sometimes the operative deed includes an “after-acquired property” provision, in which the grantor conveys all of its interest in the real estate, “together with all after acquired title of the Grantor therein.”
The effect of this language has its limits. Washington’s law for conveyances includes the following provision governing after-acquired property:
Whenever any person or persons having sold and conveyed by deed any lands in this state, and who, at the time of such conveyance, had no title to such land …. shall acquire a title to such lands so sold and conveyed, such title shall inure to the benefit of the purchasers or conveyee or conveyees of such lands to whom such deed was executed and delivered, and to his or her and their heirs and assigns forever. RCW 64.04.070.
In other words, after-acquired title concerns only the vesting of title to property actually described in a deed, but which the grantor did not own at the time of conveyance. Washington Real Property Deskbook, 3d ed., Conveyances § 32.7(7). Such property shall inure to the purchaser if a seller/grantor subsequently gains title to the property as previously conveyed.
This is true in the context of a Deed of Trust, as well. As noted in my previous blog post (link: The Trustee as Third Party to a Deed of Trust), by securing a home loan with a deed of trust, a home buyer grants and conveys to the trustee the power of sale of the property for the term of the loan.
In the event of default, the trustee can initiate a non-judicial foreclosure on the property and conduct a trustee’s sale to recover the amounts due on the home loan. Under the Deeds of Trust Act, the subsequent sale and deed “shall convey all of the right, title, and interest in the real and personal property sold at the trustee’s sale which the grantor had or had the power to convey at the time of the execution of the deed of trust, and such as the grantor may have thereafter acquired.” RCW 61.24.050(1).
Again, the trustee can only sell the title he or she received, as legally described in the deed of trust (which would include any such property in which the grantor did not have title at the time but “thereafter acquired”).
To learn more about The Limits of After-Acquired Property Provisions, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100.