After-acquired property clause

What does After-acquired property clause mean in American Law?

The definition of After-acquired property clause in the law of the United States, as defined by the lexicographer Arthur Leff in his legal dictionary is:

In many mortgage instruments there is a provision whereby the lien of the mortgage is made to apply not only to property then owned by the mortgagor, but to all, or all of some specified type of, property acquired by the mortgagor after the date of the mortgage. This has the advantage not only of providing additional security to the

mortgagee as the originally mortgaged property depreciates, but also obviates any question about whether improvements or additions to the property are covered by the mortgage. As one can imagine, this can be misleading to other later creditors, especially when chattels are the subject of the mortgage and special statutory provisions sometimes exist with respect to these clauses. Cf. add-on clause.

Meaning of After-acquired-property Clause

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