Allodial title
From Freepedia
Allodial title is a concept in some systems of property law. It describes a situation where real property (i.e., land, buildings and fixtures) is owned free and clear of any encumbrances, including liens, mortgages and tax obligations. Allodial title is inalienable, in that it cannot be taken by any operation of law for any reason whatsoever. True allodial title is rare, with most property ownership in the common law world — primarily, the United Kingdom, the United States, Canada, Australia and New Zealand — is described more properly as being in fee simple. In particular, in the nations recognising Elizabeth II as sovereign, land is said to be "held of the Crown." In common legal use, allodial title is used to distinguish absolute ownership of land by individuals from feudal ownership, where property ownership is dependent on relationship to a lord or the sovereign. Webster's first dictionary says allodium is "land which is absolute property of the owner, real estate held in absolute independence, without being subject to any rent, service, or acknowledgement to a superior. It is thus opposed to feud. In England, there is no allodial land, all land being held of the king; but in the United States most lands are allodial."
Property owned under allodial title is referred to as allodial land or allodium.
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Legal concept
Under early British common law, all land was held to belong to the sovereign. Any other interest in real property had to flow from a grant of land from the sovereign, usually in return for feudal obligations, such as agreeing to supply military assistance to the king on demand, or payment in lieu of military assistance. In England, the sovereign would generally give large land grants to Dukes, who would themselves grant land to lower nobles, down to the lowest type of person with actual title in land, the Esquires. The majority of the population were usually tenants or serfs of the Esquires, Knights and Lords.
However, as the sovereign's demands for military assistance or taxes in lieu grew, minor nobility, particularly those at the level of baron, found themselves increasingly in fear of losing their lands. This was particularly a problem during the reign of King John "Lackland", who was particularly notorious for seizing large estates and taking their income directly into the crown's treasury. Indeed, this was one of the major complaints that was addressed in Magna Carta. As a result of Magna Carta, legal protections were put in place that prevented the sovereign from seizing land without cause, usually treason against the sovereign.
In addition, the Catholic Church in England wanted exemption from taxation from their own estates, and protection from seizure by the Crown. This was of particular importance in the case of nobility who died without sons, who had the opportunity to will their estates to the Church, whereas in the absence of testamentary instructions, the estate would have reverted to the Crown automatically.
These rights, which eventually could be relied upon by even the smallest property owners, guaranteed ownership in fee simple, or free of any obligations to a noble or the sovereign. To distinguish it from feudal title, and to allow for situations like land used for religious or educational purposes which could be held free of crown tax, the term "allodial", from the Germanic for "all one's own", was used.
Development of equitable title
As late as the Tudor period, in order to avoid estate taxes, a legal loophole was exploited where land was willed to a trustee for the use of the beneficiary. However, trustees often abused this privilege, and heirs found that the courts of common law would refuse to recognize the "use" clause, and would instead grant title in law to the trustee. However, the courts of equity, which were developed by the sovereign to deal with obvious injustices in the common law courts, ruled that the heirs were entitled to the use of the property, and gave them title in equity. As rulings of equity courts ranked above those of common law courts, this gave heirs the use of the land, but not title to it in the common law.
However, this distinction between common law and equity title helped develop forms of security based on the distinction, now known as the mortgage. Enjoyment of the property during the period where the mortgage was in good standing could be assured through the equity courts, while the right to foreclose on the property to merge the common law and equity title were guaranteed in the common law courts.
Proof of ownership
Until the 18th century, almost all common law property ownership depended on proving a link of possession from a royal grant of title to the property owner. Although the feudal system was rapidly disappearing from England in the 18th century, to be replaced with a system of taxation, in theory the feudal chain of title still existed, although it was a formality.
However, proving ownership in absence of the documents was an impossibility, and forgeries of crown grants were common and difficult to detect. Moreover, it was nearly impossible to determine if land was subject to common law encumbrances (i.e. mortgages). This led to the establishment in the 18th century of land registry systems, where a central office in each county was responsible for the filing of land deed, mortgages, liens and other evidence of ownership, transfer or encumbrance. Under land registry, deeds and charges were not recognized unless they were filed, and persons who filed were given priority over previous transactions that had not been filed. Moreover, under statutes of limitation, only documents that had been filed in the past 40 years had to be consulted to determine the chain of ownership.
By the time of the American Revolutionary War in 1774, this was essentially the land system in place in the thirteen American colonies.
The Treaty of Paris
Prior to 1774, all land in the American colonies could also be traced to royal grants, usually one grant creating each colony. However, when the colonies won the Revolutionary War, they did not want to create a feudal system. As a result in the Treaty of Paris (1783), which ended formal hostilities and recognized American independence, England agreed to give up any Crown rights to the land, and agreed that all land in the American colonies was held in allodial title. Essentially, this recognized that no person holding land in the new United States owed any allegiance or duty to any English noble.
Apart from land that was formally owned at the time of the Revolutionary War, most American landholders can trace their title back to grants by the federal or state goverments of land obtained by purchase (Louisiana), treaty (the Ohio Valley), conquest (New Mexico, Arizona, and California), or annexation (Texas). However, in reality, previous grants prior to those territories becoming U.S. possessions were recognized. In fact, in Dartmouth College v. Woodward, the United States Supreme Court ruled a New Hampshire law that attempted to revoke the land grant to Dartmouth College from King George III was unconstitutional.
Many state constitutions (Wisconsin, Minnesota, New York) refer to allodial title, but only to clearly distinguish it from feudal title, which appears to be illegal throughout the United States. Clearly, the United States Constitution does not recognize the concept that land ownership is absolute, as the Fifth Amendment in the Bill of Rights clearly gives the government the right of eminent domain. The right to tax Real estate is preserved in the Constitution though it is a right reserved for the states. In addition, the government powers of police power, and escheat have been retained in the American legal system.
Misuse of concept of allodial title
Many anti-tax and anti-government groups are convinced that the references to allodial title in state constitutions and the Treaty of Paris give property owners absolute, inalienable title to their property. These people generally fall into several broad groups:
1. Anti-tax crusaders. This group denies the right of municipal and state governments to tax property on the basis that allodial title cannot be alienated by failure to pay those taxes. However, most private property is not held in true allodial title.
2. Mortgagees. Persons who have overextended themselves and face foreclosure often try to create an allodial title. As allodial title cannot be alienated by seizure by a creditor, they claim the foreclosure by the mortgagee is illegal. However, by its nature, allodial title cannot be mortgaged in the first place, and an attempt to create allodial title on land that is subject to encumbrance by debt is impossible. Actually a contract can be created by an owner of allodial property with a mortgagee resulting in the transfer of title under certain circumstances such as default on a loan, thus that land falls out of the allodial title domain as it is essentiall jointly owned and governed by contract by both the mortgagee and mortgagor. Once the mortgagee releases the contract as satisfied in full, the ownership reverts entirely back to the owner. There was time when one was considered a fool to mortgage allodial land and thus give up allodial ownership as among other penalties the owner often lost the right of a freeholder to vote.
3. Anti-Zoning groups. Persons who own agricultural land that faces re-zoning due to encroaching urbanization often claim that zoning laws that control agricultural use of property are illegal as it constitutes an encumbrance on allodial title. They claim that only the law of nuisance applies to persons holding allodial title. However, the U.S. Supreme Court court has upheld the constitutionality of zoning laws on a very broad basis, even though such laws all post-date the 1787 Constitution.
Schemes to obtain allodial title usually advise property owners to file a deed of allodial title with the local registry office, or to publish a notice of allodial title in a local newspaper. However, neither these or any other method is recognised by US courts, and attempts to assert an alloidal title in US courts may be classified as a "frivolous claim".
Limited allodial title
Two states, Nevada and Texas, have created limited allodial title provisions in order to protect property owners from the burden of highly increased property tax burdens which often occur when unincorporated land becomes part of a town or city.
Nevada allows persons who own and live in single family residences to obtain allodial title on land they own if the land is free of mortgage and tax arrears. Nevada accepts a payment based on an actuarial calculation of the present value of the future property taxes payable given the age of the youngest person who holds title to the property. Once this amount is paid, a certificate of allodial title is granted. Property taxes owing are paid by the state treasurer from the funds paid to obtain the certificate. Allodial title is subject to exemptions from seizure in debt or bankrupty under homestead laws, and the taxes are paid by the state treasurer as long as the original owner remains in the home. However, like the barons under Magna Carta, Nevada law still allows the seizure of property if it is used in a criminal enterprise.
Other institutional property ownership can also be called allodial, in that property granted for certain uses is held absolutely and cannot be alienated in most circumstances. For example, property held by universities and colleges for educational purposes can be described as having allodial title. In most states, property held by churches for the purpose of worship also has status similar to allodial title. American Indian reservations also share some similarity with allodial title. However, in all these cases, it is also clear that if the title ceases to be used for the purposes for which it was granted, it reverts to the state or the federal government.
Difficulties with allodial title
Although allodial title cannot be lost in most circumstances, that also means that it cannot be transferred or encumbered without losing its allodial status. As such, when a property owner dies and leaves ownership to more than one heir, the allodial status of the property is lost. Allodial title cannot be mortgaged. Moreover, as liens can't attach to allodial title, it is difficult to have improvements made to a property as once incorporated, they become part of the allodial title and become exempt from lien or seizure of the property to pay a contractor's bill.
Allodial title cannot not be taken away against the will of the owner (title holder) as the owner is sovereign over the allodial property. However, an allodial owner can contractually give up allodial ownership and that allodial ownership can be restored or sold or passed on to an single heir. Allodial title cannot be taken away by fraud, only by legitimate contract.
See also
External links
- Allodial title resources
- Court case where mortgage holder did not have allodial title recognized by court and sanctions were applied at quatloos.com
- Nevada Allodial Title
