Learning Outcomes
After reading this article, you will be able to identify and explain special problems affecting title to land, including estoppel by deed, the effect of prior judgments (issue preclusion), and the impact of tax liens. You will be able to apply these principles to MBE-style questions and avoid common pitfalls regarding title disputes and challenges.
MBE Syllabus
For the MBE, you are required to understand how certain legal doctrines and statutory liens can affect title to real property. This article focuses your revision on:
- Recognizing and applying the doctrine of estoppel by deed (after-acquired title).
- Understanding how prior judgments can preclude relitigation of title issues (issue preclusion/collateral estoppel).
- Identifying the effect of tax liens on title and their priority.
- Distinguishing between these special problems and standard recording act issues.
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
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If a grantor conveys land by warranty deed before acquiring title, and later acquires title, what interest does the grantee have?
- No interest
- A voidable interest
- Title automatically passes to the grantee
- Only a right to damages
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A court has previously ruled that a party does not own Blackacre. In a later suit over Blackacre between the same parties, can the losing party relitigate ownership?
- Yes, if new evidence is found
- Yes, if the law has changed
- No, if the issue was actually litigated and necessary to the judgment
- Only if the first case was in federal court
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Which of the following has the highest priority in a foreclosure sale (absent special statutes)?
- A prior mortgage
- A later-recorded tax lien
- A judgment lien
- A mechanic’s lien
Introduction
Special problems can arise in determining who holds good title to real property, even when the recording acts are satisfied. This article covers three key areas: estoppel by deed (after-acquired title), the preclusive effect of prior judgments (issue preclusion), and the impact of tax liens on title. These issues frequently appear in MBE questions and can affect the rights of buyers, sellers, and third parties.
Estoppel by Deed (After-Acquired Title)
When a grantor conveys land by warranty deed before actually owning it, and later acquires title, the doctrine of estoppel by deed may operate to automatically vest title in the grantee.
Key Term: Estoppel by Deed If a grantor purports to convey land by warranty deed before acquiring title, and later acquires title, the title automatically passes to the grantee as against the grantor and those claiming under the grantor, by operation of law.
This doctrine applies only to warranty deeds or deeds with covenants of title, not to quitclaim deeds. The grantor is "estopped" from denying the validity of the original conveyance.
Worked Example 1.1
Seller conveys Blackacre to Buyer by general warranty deed, but Seller does not own Blackacre at the time. One year later, Seller acquires title to Blackacre from the true owner. Who owns Blackacre?
Answer: Buyer automatically acquires title to Blackacre as soon as Seller obtains it, under estoppel by deed. Seller cannot claim ownership.
Exam Warning (Estoppel by Deed)
If the grantor used a quitclaim deed, estoppel by deed does not apply. The grantee gets no automatic benefit from after-acquired title.
Issue Preclusion (Estoppel by Judgment)
A prior final judgment on title to land can preclude relitigation of the same issue between the same parties (or their privies). This is known as issue preclusion or collateral estoppel.
Key Term: Issue Preclusion (Collateral Estoppel) Once a court has finally determined an issue of fact or law essential to a judgment, the same parties (or their privies) cannot relitigate that issue in a later lawsuit.
This doctrine prevents wasteful litigation and protects the stability of titles. It applies whether the prior judgment was in state or federal court.
Worked Example 1.2
A court rules in a quiet title action that Owner does not have title to Greenacre. In a later suit between Owner and the same party over Greenacre, Owner claims title again. Is Owner allowed to relitigate?
Answer: No. Issue preclusion bars Owner from relitigating title to Greenacre against the same party, since the issue was actually litigated and necessary to the first judgment.
Revision Tip
Always check the parties and the issues in the prior judgment. Issue preclusion applies only if the same issue was actually litigated and necessary to the outcome.
Tax Liens and Title
Tax liens are statutory liens imposed by government for unpaid property taxes. They can attach to real property and may have priority over other interests.
Key Term: Tax Lien A statutory lien imposed by law for unpaid property taxes, which attaches to real property and may be enforced by sale or foreclosure.
Tax liens usually have "super-priority," meaning they take precedence over most other liens, including mortgages, regardless of recording. A foreclosure sale for unpaid taxes can wipe out junior and even senior interests, unless the statute provides otherwise.
Worked Example 1.3
Homeowner fails to pay property taxes. The county records a tax lien and later forecloses, selling the property to Purchaser. There is an earlier-recorded mortgage on the property. What happens to the mortgage?
Answer: The tax lien has priority. The foreclosure sale extinguishes the mortgage, unless the statute protects the mortgagee.
Exam Warning (Tax Liens)
On the MBE, always check for statutory language. Some states give tax liens absolute priority, while others may protect certain prior interests. Do not assume the common law rule applies without checking the facts.
Key Point Checklist
This article has covered the following key knowledge points:
- Estoppel by deed applies when a grantor conveys by warranty deed before acquiring title; after-acquired title passes automatically to the grantee.
- Quitclaim deeds do not trigger estoppel by deed.
- Issue preclusion (collateral estoppel) bars relitigation of title issues already decided by a final judgment between the same parties or their privies.
- Tax liens are statutory liens for unpaid property taxes and usually have priority over other interests, often extinguishing mortgages and other liens at foreclosure.
- Always check the recording act and statutory language for priority rules and exceptions.
Key Terms and Concepts
- Estoppel by Deed
- Issue Preclusion (Collateral Estoppel)
- Tax Lien
