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Utah Real Estate Code 57-1-10

Utah Real Estate Code 57-1-10

Utah Real Estate Code 57-1-10: After-Acquired Title Passes.
(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 Utah Code Page 4 (b) the conveyance is as valid as if the legal estate had been in the grantor at the time of the conveyance. (2) Subsection (1) does not apply to a conveyance by quitclaim deed.

After acquired title refers to a title held by a person who bought property from a seller who acquired title only after purporting to sell the property to the buyer. When a seller conveys land to another on the belief that s/he had good title to the land, and later s/he acquires title to that land, then buyer automatically acquires title to the transferred land. As soon as the seller actually acquires title, title passes to the person to whom it was sold. However, this doctrine of after-acquired title generally does not apply when the seller receives title by quitclaim deed. The deed conveying the land must include words expressing an intention to vest title in the grantee.

Future acquired property, which is also known as after-acquired property, encompasses both personal property and real property and provides additional collateral to ensure that a loan will be satisfied. There must, however, be a provision in the loan agreement between the borrower and the lender that gives the lender a right to the specific property of the borrower that he or she acquires subsequent to the execution of the agreement. Secured transactions frequently involve the treatment of personal property as future acquired property. For example, a debtor who owns a retail store might accept a future acquired property provision in a security agreement with a creditor in order to obtain funds to buy additional inventory. The purchase of new inventory constitutes additional collateral that ensures the satisfaction of the loan. Language commonly used to phrase a future acquired property term in a contract is “any or all obligations covered by the security agreement are to be secured by all inventory now or hereafter acquired by the debtor.” Mortgages, particularly those affecting commercial properties, involve the treatment of real property as future acquired property. The mortgagee (who is the lender) will include in the mortgage an after-acquired property clause which provides that the mortgagee will have an equitable lien, which is a right to have property used to repay a debt, in all the real property that the mortgagor (who is the borrower) obtains after the mortgage is executed.

Common Methods of Holding Real Property Title

Real estate is a kind of property that’s made up of land, as well as any structure that sits on it. Improvements to the structure also count toward the property. The definition also includes any other resources that may appear on that piece of land including vegetation, livestock, crops, natural resources, and even water. Real estate can be both commercial and residential. Commercial properties include office buildings, warehouses, shopping centers, and other types of retail space. Residential property, on the other hand, is made up of homes, condominiums, apartments, and any other type of property that is meant for residential living. People can own real estate for their primary residence or to hold as an investment rental property.

What Is Title?

The term title refers to a document that lists the legal owner of a piece of property. Titles can be issued to depict ownership of both personal and real property. Personal property is anything that doesn’t include real estate such as appliances, antiques, or artwork. Real property, on the other hand, is anything tangible like real estate. Title for real property must be transferred when the asset is sold and must be cleared for transfer to take place. This means it must be free of liens or encumbrances that could pose as a threat to its ownership.

Title for real property must be transferred once the asset is sold.
Unlike other real property assets, real estate ownership can take several forms, with each having implications on ownership transfer, financing, collateralization, and taxing. Each type of title method has its advantages and disadvantages, depending on an individual’s particular situation and how one wants ownership to pass in the event of such things like death, divorce, or sale. The most common of these methods of title holding are:

• Joint tenancy
• Tenancy in common
• Tenants by entirety
• Sole ownership
• Community property

Joint Tenancy

Joint tenancy occurs when two or more people hold title to real estate jointly, with equal rights to enjoy the property during their lives. If one of the partners dies, their rights of ownership pass to the surviving tenant(s). Tenants can enter into a joint tenancy at the same time. This usually occurs through a deed.


As mentioned above, the main advantage to entering a joint tenancy is that ownership is passed to the surviving tenant if one passes on. Another benefit to having this method of title in place is that neither party in the ownership needs to be married or related. Furthermore, the responsibility for the property is shared between tenants. That means any financial burden relating to the property belongs to everyone, not just one individual.


The downside is that any financing or use of the property for financial gain must be approved by all parties and cannot be transferred by will after one passes. If the parties are not married, they must petition the court to divide the property or order its sale in order to get out of the title. Another large disadvantage is that a creditor who has a legal judgment to collect a debt from one of the owners can also petition the court to divide the property and force a sale in order to collect on its judgment. In other words, each of the owners takes a risk in the other’s financial choices.

Tenancy in Common (TIC)

With tenancy in common (TIC), two or more persons hold title to real estate jointly, with equal rights to enjoy the property during their lives. So all aspects of the property are shared by the people named on the title. Unlike joint tenancy, tenants in common hold title individually for their respective part of the property and can dispose of or encumber it at will. This type of title can be entered into at any time—even years after other people entered into an agreement. Ownership can be willed to other parties, and in the event of death, ownership will transfer to that owner’s heirs undivided.


Tenancy in common allows one owner to use the wealth created by their portion of the property as collateral for financial transactions, and creditors can place liens only against one owner’s particular portion of the property. Another advantage to this kind of title is that it makes purchases much easier.


A TIC doesn’t allow for automatic survivor rights, all tenants share the liability for any debts on the property. Any liens on the property must be cleared in order for a total transfer of ownership to take place.

Tenants by Entirety (TBE)

This method can only be used when owners are legally married. Tenants by entirety (TBE) are ownership in real estate under the assumption that the couple is one person for legal purposes. This method conveys ownership to them as one person, with title transferred to the other in entirety if one of them dies.

The advantage of this method is that no legal action needs to take place at the death of one’s spouse. There is no need for a will, and probate or other legal action isn’t necessary.

Conveyance of the property must be done together and the property cannot be subdivided. In the case of divorce, this type of title automatically converts to a tenancy in common, meaning that one owner can transfer ownership of their respective part of the property to whomever they wish.

Sole Ownership

Sole ownership can be characterized as ownership by an individual or entity legally capable of holding the title. The most common sole ownership is held by single men and women, and married men or women who hold property apart from their spouse, along with businesses that have a corporate structure allowing them to invest in or hold interest in real estate. For married people who wish to own real estate apart from their spouse, title insurance companies typically require the spouse to specifically disclaim or relinquish their right to ownership in the property.

The main advantage of holding the title as a sole owner is the ease with which transactions can be accomplished because no other party needs to be consulted to authorize the transaction.

The obvious disadvantage is the potential for legal issues regarding the transfer of ownership should the sole owner die or become incapacitated. Unless specific legal documentation such as a will exists, the transfer of ownership upon death can become very problematic.

Community Property

There is no such thing as community property in Utah. Community property does exist in other states though. Community property is a form of ownership by husband and wife during their marriage that they intend to own together. Under community property, either spouse has the right to dispose of one half of the property or will it to another party. Outside of real estate, property acquired during one’s marriage is usually deemed community property. Real estate acquired during a common-law marriage will also be considered to be held as community property. Anyone who has lived with another person as a common-law spouse and doesn’t specifically change the title to the property as sole ownership—which is legally transacted with approval by the significant other—takes the risk of having to share ownership of the property in the absence of having a legal marriage.

Property with Survivor Rights

Community property with the right of survivorship is a way for married couples to hold title to the property, although it is only available in the states of Arizona, California, Nevada, Texas, and Wisconsin.12345 It allows one spouse’s interest in community-property assets to pass probate-free to the surviving spouse in the event of death.

Other Ways to Hold Title

Entities other than individuals can hold title to real estate in its entirety:

Corporation Ownership

Ownership in real estate can be done as a corporation, whereby the legal entity is a company owned by shareholders but regarded under the law as having an existence separate from those shareholders.

Partnership Owners

Real estate can also be owned as a partnership. A partnership is an association of two or more people to carry on business for profit as co-owners. Some partnerships are formed for the express purpose of owning real estate. These partnerships can also be structured as limited partnerships, where investors take limited liability by not making managerial decisions regarding the management or transaction decisions. In these cases, one general partner is typically responsible for making all business decisions on behalf of the limited partners.

Trust Ownership

Real estate also can be owned by a trust. These legal entities own the properties and are managed by a trustee on behalf of the beneficiaries to the trust. There are many advantages and disadvantages to holding real estate that falls outside the scope of this article, but all have to do with benefits surrounding managerial influence, financial and legal liability, in addition to tax considerations.

Transfer Property Rights to Family with a Quitclaim Deed

A Quitclaim Deed is a simple real estate legal document used to transfer property rights, often between family members. To determine if a Quitclaim Deed is the best option for you, consider the following:
Is there a trusted relationship between the parties or family members?
A Quitclaim Deed is most often used to transfer property between parties who are familiar with one another and who have an established relationship. Unlike a Warranty Deed, a Quitclaim Deed does not provide the new owner with any guarantees or warranties that the seller owns the property or has authority to sell the property, nor does this type of deed guarantee that a buyer is receiving the property free of mortgages. Due to the lack of warranties with signing a Quitclaim Deed, it is typically only used to transfer title between family members, spouses or ex-spouses after a divorce, between a trust owner and the trust, or between other individuals who have a long standing and trusting relationship.
Do you want to correct a previously recorded deed?
A Quitclaim Deed is often used to correct mistakes or to clarify information in previously recorded deeds. Minor disparities can cause problems when a property owner attempts to sell the property unless a deed is drafted which clarifies or corrects the conflicting information.
Do you want to clarify how the property is owned?
Another common reason for using a Quitclaim Deed is to clarify tenancy (how the property is owned by the parties) among the property owners. Clarifying tenancy by Quitclaim Deed can save time and money in the event of death of one of the property owners, for example; if a husband and wife realize the current deed does not specify tenancy. In most states, if no specific statement is made, it is assumed the property is owned as tenants in common. Most spouses or family members prefer to hold property as joint tenants with right of survivorship. Doing so allows the property to pass to the remaining property owners without the necessity of an expensive probate after the death of one of the property owners.
State differences
There are some state differences regarding transfer of after-acquired title. Montana, Idaho, and Alaska allow transfer of after-acquired title using a Quitclaim Deed. In most states, a Quitclaim deed only transfers the interest owned by the seller at the time they executed the deed. Usually, any interest in the property acquired after the signing of the Quitclaim Deed does not pass to the buyer.

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