A (Very) Brief History of American Real Estate Law

A (Very) Brief History of American Real Estate Law
  • Americans have always had a desire to own real property as a gateway to increased wealth.
  • The British enacted a debt recovery act in the colonies that formed the basis of creditor rights acts still in existence today.
  • Those two interests have formed the backbone of state property law throughout the US.

Happy Fourth of July. I hope everyone had a great long weekend with friends and family. And that you were able to celebrate the great fortune of being able to live in this wonderful country. We most certainly have our faults here in the US, but even with those, it is still a great place.

The Fourth of July is my favorite holiday. I love the warm weather and the friends and the burgers and fireworks and everything associated with it – though my dog may disagree. So with that in mind, I decided to celebrate the Fourth in the most boring way possible – by researching and writing about the history of American property law. So that’s what this week’s entry is all about.

How Real Property Law Developed

It should come as no surprise, but United States property law developed directly from the British property law. As a result, owning land was seen as a god given right for some people in the new area. But the British also wanted to be able to recover on debts in the new land. As a result, in the mid 1700s, Parliament enacted a debt recovery act that shielded little of the colonists land from the debtors. This was a very significant act and lead to the creation of a lot of real property law in the US.

But unlike in Britain, land was very plentiful in the US. And despite the debt recover act, many of the founders saw pushing westward as a great benefit for the US. As a result, Americans saw land ownership as route to prosperity. Indeed, in 1774, Thomas Jefferson wrote –

“It is time for us to lay this matter before his majesty, and to declare that he has no right to grant lands of himself. From the nature and purpose of civil institutions, all the lands within the limits which any particular society has circumscribed around itself are assumed by that society, and subject to their allotment only. This may be done by themselves assembled collectively, or by their legislature, to whom they have delegated sovereign authority; and if they are allotted in either of these ways, each individual may appropriate to himself such lands as he finds vacant, and occupancy will give him a title.”

Post-Revolution Real Property Ownership

Once the revolution happened and the USA became its own independent country, property rights were generally left to the states to figure out. But there was still this core belief among residents that property ownership was a god given right and a way to prosperity. In addition, at the time, all states but one required property ownership to be able to vote. As a result, many early Americans owned real property.

States, though, also knew they wanted to attract creditors to invest in their area. For those investors to feel comfortable investing in these new states, they wanted to know that their investment would be protected. As a result, most states enacted some sort of debt recovery act based on the British form that was enacted in the colonies. These acts were pretty strict back then – not much real property could be protected from the creditors.

This is really the basis of how property law has developed in the US. These two competing interests – the desire for property ownership and creditor protection – has driven much of the real property law development in the states.

And it continues to this day. Americans still want to own real property. Its still seen as a path to wealth. And creditors still want to be protected. So while property owners are now usually able to exempt a homestead, for example, from the creditors grasp, creditors can go after other types of property. These two interests – property ownership and creditors rights – have been the backbone of real property law development throughout the country.

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