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.
Historically, it was distinguished as property held absolutely and not subject to a feudal relationship.
True allodial title is rare in the common law world, such as the U.K., the U.S., Canada, Australia, New Zealand, or the Republic of Ireland, and is often reserved for governments.
In these countries, it is far more common to hold title in fee simple.
2. What is the history of holding European 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 this period.
However, at the end of the 9th century, allodial land increased in France due to the anarchy that accompanied the decline of the Carolingian monarchy.
This did not last long, however, 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.
By the 12th and 13th centuries, the only appreciable amount of allodial land remaining was limited to peasant holdings in the southwest.
In Germany, there were large allodial estates held by nobles, especially in Saxony.
In England, there was also a large amount of allodial land before the Norman Conquest.
Following this occurrence in 1066, allodial land disappeared under new rulers.
While allodial land was freely held, it wasn’t always free of restrictions entirely.
If the holder of the allodial title chose to have feudal tenants, then they would owe certain obligations and could not be considered in “absolute control” of their holding.
These obligations were owed primarily in terms of protections.
Eventually, French feudalism declined, and following the French Revolution in 1789, all land was under allodial title.
In England, no land is referred to as “allodial,” but an estate in fee simple aligns with the practice of absolute ownership.
3. What is a fee simple estate?
Most property ownership in common law jurisdictions is “fee simple.”
Fee simple refers to how people own real estate.
In most cases, if you buy a home from a seller in the United States, you will have what is known as “fee simple ownership” of this 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.
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, not allodial title, 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 still file liens against these properties if owners violate the law.
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
- There are also two different types of fee simple defeasible: determinable and condition subsequent
- Determinable: The deed to the determinable estate has usage limitations. If the restrictions are violated, then the estate automatically reverts to the grantor or heirs.
- Condition subsequent: If any condition is violated, then the previous owner may repossess the property.
Fee Simple Subject to Condition Subsequent: A fee simple interest in a property that can be terminated at the will of a future interest holder upon the occurrence or non-occurrence of an event or condition.
6. What’s the difference between fee simple and leasehold ownership?
While fee simple is the most common type of residential real estate in America, there is a small percentage of homes held in leasehold ownership.
Under this model, 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?
No, in the U.S. the land is subject to eminent domain by federal state and local governments.
It is also subject to the imposition of taxes by state and/or local governments.
As a result, there is no land under true allodial title.
You may sometimes hear about people attempting to gain allodial title on their property.
In these cases, property owners are often advised to file a deed of allodial title with the local registry office or to 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 recognized 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 increased property taxes.
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.
Additionally, allodial titles were subject to exemptions from seizure in debt or bankruptcy under homestead laws.
With that said, the property could be seized if it was used in a criminal enterprise.
Unfortunately, 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.
That said, some institutional property ownership can be called allodial as the property is granted for certain uses while being held absolutely and cannot be alienated in most circumstances.
An example of this is the way that universities and colleges hold property.
Furthermore, in many states, the property that churches hold for worship purposes is similar in status to allodial title.
A final example is Native American reservations, which share similarities with allodial titles.
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.
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 allodial title status is ideal because you cannot lose it.
However, it isn’t perfect in all circumstances.
Theoretically, allodial titles cannot be lost, but they also cannot be transferred or encumbered without losing their allodial status.
For example, if the original property owner died and left ownership to more than one heir, then the property would lose its allodial status altogether.
Additionally, an allodial title property would likely not be able to be mortgaged as liens could not be attached to the property.
This also makes 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, a contractor may be hesitant 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.
Additional ResourcesIf you are looking to buy affordable land, you can check out our Listings page. And before you buy land, make sure you check out Gokce Land Due Diligence Program. If you are looking to sell land, visit our page on how to Sell Your Land.
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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.