While not used in the United States anymore, allodial title has some deep roots in the real estate industry.
It is also a concept that has caused some confusion in recent years.
So let’s take a closer look at what you may need to know about this concept as a landowner.
1. What is allodial title?
Allodial title is a concept in some systems of property law.
It occurs when real property (i.e. land, buildings, and fixtures) is owned free and clear of any superior landlord and not subject to the feudal obligation.
Historically, it was distinguished as property held absolutely and not subject to a feudal relationship.
2. What is the history of holding land in allodium?
Allodium is land freely held.
That is, land that is without obligation of service to any overlord.
During the Middle Ages, most land was held by feudal tenure, and thus allodial land tenure was not significant during the period.
At the end of the 9th century, allodial-held land did increase in France due to the anarchy that accompanied the decline of the Carolingian monarchy.
However, this did not last long as much of the new property was brought into a feudal relationship.
In a feudal relationship, the holder of the land owes certain services to his lord and could not be considered in “absolute control” of his holdings.
These obligations were owed primarily in terms of military service, court service, incidents or taxes.
Eventually, French feudalism declined, and following the French Revolution in 1789, all land was under allodial title.
In England, there was also a large amount of allodial land before the Norman Conquest.
However, following this occurrence in 1066, allodial land disappeared under the new Norman rulers.
Until the 18th century, land ownership rested in the ability of a claimant to trace their claim back to a royal charter or grant of title.
By the end of the 18th century, the feudal system was largely gone from Great Britain, replaced with the allodial system we know today characterized by fee simple ownership, land registries and property taxation.
As a colony of England, the system of property ownership in the United States closely resembles that of Great Britain.
During the colonial period, all land in the territories could be traced back to a royal grant or charter.
Once the Revolutionary War ended these royal claims, land was converted to fee simple ownership.
As the United States grew in size, federal and state governments initially took over the role of landowner in newly acquired territories before ultimately distributing land to private individuals and entities through land grants or patents.
Today private ownership in much of the United States can be traced back to a government grant.
3. What is a fee simple estate?
Most property ownership in common law jurisdictions is “fee simple” which is simply a form of private property ownership.
Thus, if you buy a home from a seller in the United States, you will have “fee simple ownership” of the property.
Fee simple falls under the umbrella of “freehold” real estate.
We’ll explain more about freehold and leasehold estates in the next section.
In these scenarios, you take full and complete ownership of a piece of land and any buildings that sit on it.
If you buy a home, you not only own the home.
You also own the land and any outbuildings (sheds, garages, coach houses, etc.) that sit on it.
When you hold a property in fee simple, you have the right to do whatever you want with it (subject to local zoning and building laws).
You can make additions, build additional outbuildings, tear down the home, etc.
You can also sell the land and its buildings whenever you want or pass on the property to whomever you’d like to.
In the U.S., fee simple is the most common and highest form of real estate ownership.
That said, owners can still lose their properties, and government bodies and individuals can file liens against these properties if owners do not pay taxes or other obligations.
Stakeholders can also take back fee simple properties through the foreclosure process.
4. What is a freehold estate?
A freehold estate is a property that has an indeterminate duration of ownership.
You could hold it for a lifetime or an unlimited duration.
Real estate you purchase is typically a freehold estate.
This contrasts with leasehold ownership which lasts for a definite duration.
A leaseholder has no ability to transfer ownership of the property to others and can only hold it in his/her own interest.
However, if permitted by the lease, then he/she can transfer the lease to others.
Leasehold estates branch off into “estate for years,” “estate at will,” and “estate at sufferance.”
Here are quick definitions of each.
Estate for years: This lasts for a specified duration
Estate at will: This exists when a tenant can stay until either the tenant or the owner terminates the possession
Estate at sufferance: This exists when the tenant stays after the lease has expired, which allows the landlord to expel the tenant at any time
5. What are the different types of fee simple?
There are a few different types of fee simple estates depending on the different conditions created by the grantors.
We’ll talk you through the types below.
Fee Simple Absolute: This is a perpetual estate that is not conditioned by stipulated or restricted uses.
This type of estate may be freely passed on to heirs.
Not only is this type of estate the most common, but it is also the most desirable estate for residential real estate.
Fee Simple Defeasible: As long as the usage conforms to stated conditions, a defeasible fee estate is perpetual.
Here are the essential characteristics:
- The property must be used for a certain purpose or under certain conditions
- If the use changes or if prohibited conditions are present, the estate reverts to the previous grantor of the estate.
An example of fee simple defeasible would be the sale of a family farm in which the sale is conditioned on the property retaining its agricultural use.
In this case, if the new owner decided to develop the property into a commercial building, the land would revert back to the previous owners.
6. What’s the difference between fee simple and leasehold ownership?
In the U.S., fee simple ownership is typically what you get when purchase a home.
A leasehold, on the other hand, is what you get when you rent a property.
It is when one party owns the land while the other has the right to use this land for a set number of years.
If you decide to enter into leasehold ownership, then you’ll have to pay a fee to rent the land.
During this time, you have the right to use any home on the land.
However, when the lease ends, both the land and the home will revert to the previous owner (unless a new lease is negotiated before the old one expires).
7. Does allodial title exist in the United States?
The United States does have an allodial system of property ownership.
This is to say land rights are not governed by feudal relationships and the right to own land as well as sell, exchange or lease it at will is enshrined in law.
However, allodial title has also been defined as ownership free from all obligations or restrictions imposed by any government, entity or individual – i.e. “sovereign title”.
By this definition, no, there is no allodial title available to private individuals in the U.S.
This is because the land is subject to eminent domain by federal state and local governments.
It is also subject to the imposition of taxes and land use regulations by state and/or local governments.
Still, you may sometimes hear about people attempting to gain “true allodial title” on their property.
In these cases, property owners are often advised to file a deed of allodial title or a declaration of land patent with the local registry office or publish a notice of allodial title in a local newspaper.
Unfortunately, neither of these methods is a recognized way for landowners to assert allodial title and are unlikely to be accepted by courts.
8. What are the limited allodial title provisions in Nevada and Texas?
Both Nevada and Texas created limited allodial title provisions to protect property owners from property tax increases.
In Nevada, one could obtain an allodial title if the property was not mortgaged, had no liens and was the owner’s primary residence.
To obtain allodial title, you would pay a lump sum to the state equal to the projected future tax payments (i.e. you “buy out” your tax obligation), after which you would no longer be required to make property taxes payments.
With that said, the property was still subject to local building and zoning laws, the right of eminent domain and the ability to be seized if it was used in a criminal enterprise.
However, after June 13, 2005, the Nevada Legislature prohibited applications by property owners for allodial title.
Today, obtaining an allodial title in Texas is no longer an option either.
9. What is eminent domain?
Eminent domain is defined as the power of state, provincial, or national government to take private property for public use.
The power of eminent domain doesn’t include the power to take or transfer ownership of private property from one owner to another without a valid public purpose.
The government must also provide just compensation to the property owner of the land seized.
Common uses of property taken by eminent domain include roads, government buildings, and public utilities.
For example, railroads were often given the right of eminent domain to obtain land or easements to build and connect rail networks.
10. What are the problems with allodial title?
Most people think “true allodial title” is ideal because you cannot lose it.
However, it isn’t perfect in all circumstances.
Theoretically, allodial titles cannot be lost or encumbred, but they also cannot be transferred, sold or given away without losing their allodial status.
This is because they are not alienable.
Furthermore, an allodial title property would likely not be able to be mortgaged as liens could not be attached to the property.
This would also make it difficult to improve the land.
Once incorporated, the improvements would become part of the allodial title and become exempt from lien or seizure of the property to pay a contractor’s bill.
Thus, it would be hard to find a contractor willing to work with you.
11. What is a life estate?
A life estate is the ownership of immovable property for the duration of a person’s life.
The owner of this type of estate is called a life tenant.
This life tenant shares the ownership of the property with another individual who will automatically receive the title to the property upon their death.
In the United States, life estates are created by homeowners to ensure the next generation in their family receives a home while avoiding probate.
This process is typically done in estate planning.
It’s not the same as an allodial title and is often done for convenience purposes.
If you’re buying land or a house in the U.S., it’s more than likely that you’ll end up with a fee simple model of ownership as this is the most common arrangement in the country.
That said, it never hurts to understand how all the different real estate concepts — including allodial title — connect.
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Disclaimer: we are not lawyers, accountants or financial advisors and the information in this article is for informational purposes only. This article is based on our own research and experience and we do our best to keep it accurate and up-to-date, but it may contain errors. Please be sure to consult a legal or financial professional before making any investment decisions.