Buying property with allodial rights – Here’s what you need to know

The Norwegian allodial right, is a unique legal arrangement in Norway that grants certain heirs the preferential right to take over a farm property when the owner sells it or passes away. This right ensures that agricultural properties remain within the family, preventing them from being purchased by developers for other purposes. It contributes to stability for both the family and the agricultural sector. Let’s take a closer look at what allodial rights are, what requirements apply, and what you need to consider if you're planning to buy a property subject to such rights.

What is an allodial right?

Allodial rights is a traditional right in modern times. The allodial right gives relatives the right to claim the property if it is sold to someone without allodial rights or to someone with a lower priority. This makes the allodial right a family right. According to the Allodial Act, those with allodial rights must be offered the opportunity to take over the property before it is transferred to others, known as the offer rule.

Historical background

The allodial right has deep roots in Norwegian history, mentioned as far back as the Viking Age. It is enshrined in the Constitution and cannot be abolished without a constitutional amendment, which is a comprehensive process. The Allodial Act of 1974 is the current law, but it has undergone many changes over the past 50 years, including gender equality in the allodial succession in more recent times.

Requirements for claiming allodial right

To claim allodial rights, the property must meet certain criteria:

• Size: The property must consist of at least 35 acres of cultivated land or 500 acres of productive forest.
• Ownership duration: The property must have been in the family's ownership for at least 20 years, known as the allodial period.
• Residence requirement: The person who takes over must reside on the farm within one year and remain there for at least five years.
• Operation requirement: The property must be operated, either by the owner themselves or through leasing.

Also read: Norwegian property tax for residence and commercial properties

Allodial succession

The allodial right is granted to close relatives, prioritized by age. It is the owner's children and any grandchildren who have allodial rights. Siblings may also have allodial rights if one of their parents owns the farm with established allodial rights.

Possible conflicts and solutions

Allodial rights can lead to family conflicts, especially regarding who should take over the farm. The best solution is often for the parties to agree on a valuation, which can be tax advantageous. If one does not wish to exercise the allodial right, a formal waiver can be issued.

Allodial right in case law

Allodial rights are a comprehensive legal area with many decisions from the Supreme Court. It is important to be aware that the allodial right is a latent right that is only triggered if the farm is sold to someone with lesser or no allodial rights.

Also read: Understanding property concession in Norway: What you need to know

Are you planning to buy a property with allodial rights?

The allodial right is an important part of Norwegian cultural heritage that ensures agricultural properties remain within the family. Although it can lead to conflicts, there are solutions that can make the process of selling and purchasing such properties smoother. For those facing challenges related to allodial rights, especially buyers looking to acquire property, which is part of the allodial rights scheme, paying attention to this fact is crucial.

Getting legal assistance early in the process can be crucial to ensuring a smooth and secure transfer for all parties involved. Magnus Legal has extensive experience with the purchase and sale of agricultural properties, and we are happy to assist you in carrying out the transaction efficiently and correctly.