Giving Thanks For Your Land’s Title
This Thanksgiving season, as we gather with family and reflect on the values of gratitude and community, it's also an ideal time to consider the foundational elements that protect our homes and property. The American land title insurance system—one that ensures and insures property rights, secures ownership, and brings peace of mind to millions—has a rich history from British Crown to New World Congress. From early colonial deeds to the establishment of land registries, the journey of land title and deeds is a testament to our evolving pursuit of secure and equitable property ownership. Just as Thanksgiving invites us to appreciate our heritage and all that has been passed down, understanding the history of land titles reminds us of the legal and social framework that continues to safeguard our homes, families and communities today. Alas, this framework once looked very different.
Pilgrims and Colonists: Land Title Before the American Revolution
In the colonial era, land ownership in America was primarily governed by English common law and royal charters. The British Crown jockeyed with the other courts of Europe to divvy up the new world and establish footholds across the new continents. Traditionally these crowns did so by granting large tracts of land to individuals, companies, or groups, who then parceled it out to settlers. The notable systems and practices included were:
- The Headright System: Implemented in colonies like Virginia and Maryland, this system granted settlers a certain amount of land (typically 50 acres) for each person whose passage they financed to America. This encouraged colonization and the expansion of settlements.
- Proprietary Grants: Land was granted to individuals or groups (proprietors) who had full governing rights, such as William Penn in Pennsylvania. These proprietors could sell or lease land to settlers.
A common issue with these very early systems was the lack of Standardized Surveys. Land descriptions were often based on natural landmarks like rivers or mountains ranges, leading to overlapping claims and disputes due to ambiguous boundaries. Another issue that it's important to acknowledge is that during this period, the rights and land claims of Native American tribes were largely ignored or overridden, leading to conflicts and long-term repercussions.
The 13 Colonies: Land Title After the American Revolution
Following independence, the new United States government needed to manage vast western territories acquired from the British, and later France, Spain, Mexico and Russia. Establishing clear policies for land distribution was crucial for economic development and westward expansion. The Key legislative acts included:
- The Land Ordinance of 1785: This act established a standardized system for surveying land, dividing territories into six-mile-square townships, which were further subdivided into 36 sections of one square mile (640 acres) each. This grid system facilitated the organized sale and distribution of land, laying the groundwork for future land policies.
- The Northwest Ordinance of 1787: Building on the Land Ordinance, this act provided a framework for governing the Northwest Territory (areas that would become Ohio, Indiana, Illinois, Michigan, and Wisconsin). It set precedents for the creation of new states and included provisions for civil liberties and education.
- The Preemption Act of 1841: As settlers moved west, many occupied public lands without legal title (squatters). This act allowed them to purchase up to 160 acres at a minimum price before the land was offered for public sale, recognizing their improvements and encouraging lawful settlement.
One of the most significant pieces of legislation passed regarding Land Title was The Homestead Act of 1862. Signed into law by President Abraham Lincoln on May 20, 1862, the Homestead Act was a transformative piece of legislation that democratized land ownership. Key features of the Act included:
- Eligibility: Any adult citizen, or intended citizen, who had never borne arms against the U.S. government, including freed slaves and single women, could apply.
- Land Grants: Applicants could claim up to 160 acres of public land.
- The Requirements were somewhat basic in included: Residency - Claimants had to reside on the land for at least five years.
- Improvement - They were required to build a dwelling and cultivate the land.
- Filing Fees - A small registration fee was required to process the claim.
- Title Acquisition: After meeting the requirements, homesteaders received a deed to the land from the government.
An Impactful Act Indeed
The Homestead Act played a transformative role in America’s westward expansion. It spoke to millions of downtrodden Americans who saw their fortunes to be made by “Going West”. It fueled economic growth by cultivating millions of acres of new farmland, which strengthened the agricultural economy and established farming as central to American life. Socially, the act broadened access to the “American Dream” by offering land ownership opportunities to immigrants, freed slaves, and women, allowing them a path to independence and stability.
However, and we hinted to earlier, this progress came at a steep cost for Native American communities. By facilitating westward expansion under the ideology of manifest destiny, the act led to the displacement of tens of thousands from their ancestral lands, disrupting their communities and traditions. The Homestead Act thus embodies both the promise of opportunity and the profound human costs of America’s expansion.
A Royal Decree to Systematic Process
As American pilgrims and colonists established themselves and thrived, they started pushing westward. Land Title in America evolved beyond its early days, when the crown parceled out land to reward loyalists and settle debts via a royal decree. Throughout the early 19th century, the system gradually became more standardized and reliable. The establishment of the Public Land Survey System introduced uniformity in land descriptions, reducing disputes and improving record-keeping. A developing legal framework provided clearer processes for land acquisition and ownership, fostering greater confidence in property transactions. On 28 March 1876, a group of Philadelphia conveyancers met to incorporate the first entity we would recognize as a true title insurance company named “The Real Estate Title Insurance Company of Philadelphia”. The first policy was sold to an aunt of one of the founders, valued at $1,500, on 24 June 1876 for her mortgage on a home on 718 North 43rd St. in Philadelphia. Over the next half century or so, the company went through dozens of consolidations, mergers, and changes. In the 1950’s, the remnants of what was originally the first title company was sold off to Commonwealth Land Title Insurance Company which today is a subsidiary of Fidelity National Financial. Fast forward to today, the modern Land Title Insurance industry eventually evolved as a response to persistent issues with land claims and title defects, thus adding a new layer of security for property owners and lenders.
What Does It All Mean?
Looking back and understanding the historical context and original processes that contributed to today’s land title and ownership concepts may lead to one’s greater appreciation for the systems in place today. The Land Title Insurance industry continues to enshrine basic principles such as Security, by ensuring that real estate transactions are protected against title defects and claims. Clarity, by providing clear documentation and information to all parties involved. Trust, by building confidence in the real estate market through reliable services.
This Thanksgiving season, as we remember the perseverance of the Pilgrims and the foundational moments that helped build the greatest nation in history, we recognize the importance of secure land ownership in fostering personal and community growth. As professional recruiters supporting the land title insurance industry and really the entire “built world” ecosystem, we are fortunate to support the legacy which began with those early settlers.
From all of us at Anderson|Biro Executive Search, please have a safe and Happy Thanksgiving and may your holidays be filled with peace, love, prosperity and pumpkin pie!