Property Law

Equty

The rules of common law are very strict and sometimes lead to unfair results. To avoid some of these strict and unfair results, a second subsystem of law developed, known as equity. The origin of equity is also closely related to property law. In this way, a subsystem of law came into being, known as equity, after the justice done by the Lord Chancellor and the King to correct the harsh application of the rules of common law. Trust Moreover, this is the origin of trust as an institution in common law systems. If there is a trust, management powers and enjoyment rights relating to property are separated and divided between a manager (trustee) and one or more beneficiaries (beneficiary owners).

Co-ownership

The single right of ownership can be held by several persons together. In that case, we speak about "co-ownership." Notice that co-ownership is not an exception to the rule that there can be only one right of ownership on an object. Co-ownership is about more than one person holding this single right.

c) Termination

The first possibility is that the object on which the property right rests is destroyed or ceases to exist independently. The second possibility is that the property right on an object ends, even though the object itself continues to exist. Property rights can also be terminated by operation of law. This happens, for instance, if the title in a piece of land is lost because of prescription. Finally, in most legal systems, a property right can also be terminated by agreement between the parties involved in the right.

Land law

This is a feudal system of landholding. Under this system, the King could originally determine the content of the right he gave to others, especially the obligations that right holders had to undertake in return for this right to the land. English land law was the Law of Property Act of 1925. With this Act, the legislature sought to limit and standardise the available property rights in respect to land.

3) Property rights in Civil law and Common law Different forms of property rights

- primary property rights, as for example the right of ownership; - secondary property rights to use; - secondary property security rights; - secondary rights to acquire a property right.

The Rule of Accessority

1. the continued existence of the security right depends on the continued existence of the personal right that it secures, 2. if the personal right is transferred from the original creditor to a new creditor, the security rights goes with the claim.

The Consensual System

A consensual transfer system merely requires consensus to transfer a property right between the seller and the buyer. This means that the conclusion of the contract of sale will transfer the property right from the transferor to the transferee or acquirer.

Feudal system

A feudal system is not only a system of government but also a system of property law. In this system, a Lord (such as a King) grants feudal rights, known as a fee, to a vassal. A vassal might grant a further fee from his own fee to a subvassal, thereby creating a pyramid of landholding.

7) Creation, Transfer, and Termination of Property Rights a) Creation Occupation

A primary property right can originate when an object that previously belonged to no one is found and taken into possession by the finder. This is called occupation.

Creation

A property right can also come into existence when a new object is created out of a previously existing object. When sufficient labor has been invested in the new object, the person who provided the labor will become holder of a primary right over the new object.

The Principle of Specificity

A property right is a right on a good or on land, and it should be clear in respect of precisely which good or land the property right is created. If it is unclear on which object the property right rests, the droit de suite would be impossible. For instance, it is not possible that a jeweler can own "four golden rings" without it being clear precisely which rings are owned by the jeweler.

The Tradition System

A tradition system requires, besides a contract of sale, a special act to transfer the property right. A contract of sale in a tradition system therefore serves as the starting point for the transaction but in itself does not have effect in property law.

Property rights and Property law

Absolute rights in private law are called property rights, and property law is the branch of private law that governs these property rights.

5) Secondary property rights

All property rights that are not primary rights are secondary (or lesser) rights. They comprise permissions and/or competences (powers) that would normally belong to the holder of the primary right but that can be exercised by the holder of the secondary right instead of, or next to, the holder of the primary right.

Vindication

Because property rights are the most comprehensive rights, an owner can use his right against everyone else. Among others, this means that the owner of a good can vindicate this good. Vindication is a legal action in the civil law tradition by means of which a right holder can reclaim possession of the object of his right.

Unitary system

Civil law property systems are unitary: there is one system of property law that applies to land and goods alike. A unitary system means that the right of ownership is the same right of ownership regardless of whether it is held on a car or on a piece of land.

Tragedy of the Commons

Economic theory also gives us a good indication as to why there are property rights and therefore also why there is property law. A good illustration of why it is good to allow ownership of material objects, as a primary property right, is offered by the "tragedy of the commons."

Prescription

Finally, property right can also be acquired by possession, i.e. the exercise of factual power for oneself, for a long period of time. If after a long period of time the holder of primary right has not objected or taken legal action against the "adverse possession," the possessor will acquire a primary property right in the possessed thing by what is known as prescription.

Summary: Primary property rights

Generally, the right of ownership (in civil law) or the fee simple or title (in English law) is the most extensive right to use a thing or an object. It grants the holder of the right the most extensive entitlement to use it.

Accession

However, if land and bricks with different owners are joined to build a house, the owner of the land will become the owner of the house. This happens by operation of the principle of accession: that which belongs to the land becomes part of the land.

b) Transfer

If a property right is transferred, two requirements must be met. The easiest one is that it must be clear between the transferor and the transferee that the former has lost the property right and that the latter has acquired it.

The Principle of Publicity

If property rights potentially affect everyone, it is important that everyone can know who has which property right. Property rights should, in principle, be publicly knowable. In respect to land, publicity is realized through a land registry. In movable ojbects, Happily, movable objects are most of the time—but certainly not always—owned by the person who actually has them in his possession. Therefore, when a person holds factual control over an object, this is a signal to the world that this person is exercising a property right. In the case of movable objects, publicity of ownership takes the form of possession. When a property right in a movable object is transferred, this is usually also done by transfer of possession. In that way, it is made public that the property relations have changed.

Droit de Suite

If the object of a right falls into the hands of a person who does not hold the right, the right holder can exercise his right against that person.

Reservation

In a situation of a contract of sale, the seller may reserve or retain his primary right until the payment of the purchase price. This is known as a reservation of ownership (civil law) or retention of title (common law). Such a reservation or retention is a very effective security right. It is created by a clause in the contract of sale whereby the seller suspends the transfer of the primary right until the condition, i.e. the payment of the purchase price, is fulfilled. If the buyer does not pay, the seller can use his right to claim his property back. Because the seller has retained his property right.

Mixing

In case of mixing of two or more objects, a new primary right will arise. Depending on the type of mixing, the new primary right will be shared by the parties previously holding primary rights on the objects that mixed or by one single party.

Property Agreement

In order for the property right to be transferred, the parties must fulfill the requirements imposed by property law.

Personal property law, Title

In personal property law, the primary right is called "title." Title, short for "entitlement," is the right of exclusive possession to a chattel. If Thomas holds title to a book, he, and he alone, is entitled to control what happens to the book. There is a complication, however, and this has to do with the so-called relativity of title. Relativity of title means that it is possible that more than one person is entitled to the same chattel. If several persons who are all entitled to the same good all claim possession over the good, the person with the stronger entitlement will receive possession. The comparison between two titles is always relative: the one title is stronger than the other.

Vindication

In the civil law tradition, each property right generally has its own action protecting it. The right of ownership, for instance, is protected by the action that is known as vindication. Vindication means that the owner is restored in factual power over the object that he owns.

One Right of Ownership

In the civil law tradition, there can be only one right of ownership in respect to an object. If one person holds the right of ownership of a good, then all other persons are not owners.

Prior Tempore Rule

It determines that older property rights trump newer rights. This is very important in case there is a conflict between several property rights, such as when there is more than one hypothec on one piece of land.

b) Property law in Common law Fragmented System

It has two kinds of property law, one for land, land law, and another for "what is not land," personal property law. This division essentially follows the distinction between immovable objects (land) and movable objects (chattels or goods). It is the reason why the common law system of property law is called "fragmented."

Fiducia Cum Creditore

It is technique to transfer the right of ownership for security purposes. This technique, in civil law known as a transfer of ownership for security purposes or fiducia cum creditore, uses the primary right as the most valuable right to secure the payment of a claim.

Paritas Creditorum

It is, for instance, not the case that the older claim prevails over the younger one. In Latin this is called paritas creditorum: equality of creditors. It is the function of the legal institution of insolvency to secure a correct division of money if a debtor cannot pay all of his debts. A consequence of this principle of equality is that the chance that a creditor will receive his money depends on the claims of other creditors. Most creditors do not find that a comfortable situation and may therefore be unwilling to allow credit.

French Revolution

On 11 August 1789, the feudal system was abolished, and only in 1804 was it replaced by a unitary system of property law in the newly made French Civil Code. This Code was an antifeudal document that abolished, for example, all positive duties in property law.

a) Property law in Civil law Ownership

Ownership is a property right that a person has in respect to some object. This is an immaterial relation between the person and the object, without the need for any physical equivalent. Although the right of ownership is defined differently by the various civil law systems, these systems share the idea that the right of ownership is the most comprehensive right. Ex: Jean can own a book even if he lent the book to Louise, or if the book was stolen from him.

Possession

Possession is not the same as ownership; it is a factual relation between a person and an object. A person who possesses an object exercises factual control over this object. Usually, ownership and possession coincide so that the owner is also the possessor of a thing. Example of a possessor who is not the owner is a thief.

Detentorship

Possession must be distinguished from detentorship. A detentor also exercises factual control over a good but not on behalf of himself; he recognizes the right of the owner. This difference is relevant in respect to the possibilities to retrieve an object if it has been taken. The possessor can generally retrieve an object with a possessory action, but a detentor cannot. Examples of detention are when a person has borrowed or leased a good.

4) Primary rights to use and for security Limitations

Primary right to ownership does not mean that the holder may do everything; there are limitations. For instance, the holder of a primary right of a monument cannot alter it without permission from the (local) government: monuments are normally under control of the State to ensure that they keep their valuable state. Other examples are that the purpose for which a building is used may not be changed from commercial to residential (to change a building from a shop into an apartment building) without a special permit and that the person entitled to a piece of land can only build on it with a building permit.

Property Law as a Cornerstone of (Private) Law

Property law forms the basis for other areas of the law as well. When a person holds an entitlement to property, this invites the application of other areas of law, including the law of taxation, succession, and marriage.

2) Why property rights? Freedom of Ownership

Property rights actually facilitate the free circulation of goods by enabling these goods to change owners. A free market economy functions on the basis of what is known as the freedom of ownership. The existence of property rights therefore ensures the free circulation of goods. Property law firmly establishes the presumption that all objects and things are freely transferable unless explicitly prohibited.

Erga Omnes

Property rights are not directed at any particular person, but because they pertain to an object, they have effect erga omnes. The expression erga omnes means that property rights are rights with effect against everyone.

Specific Protection

Property rights enjoy a special form of protection by the law. This special protection takes the form of specific enforceability, meaning that the duties that follow from the right can be enforced as such.

6) Principles of Property law The Principle of Numerus Clausus

Property rights exist in land or goods and are not merely directed toward one or more concrete persons; they can, in principle, be invoked against everyone. For this reason, it is undesirable that natural and legal persons can make up such strong rights by themselves, if only because they would thereby bind other persons who were not involved in creating these property rights. The principle of numerus clausus therefore means that parties themselves are restricted in their freedom to create new types of property rights.

1) Property rights Relative (personal) and absolute (property) rights

Rights against a particular person are called personal rights or relative rights. Rights that are not against a particular person are called absolute (property) rights.

Secondary Rights to Use

Secondary rights to use are property rights that entitle the holder to use the object for a limited duration of time. Example: The right of servitude. A right of servitude can be created on one piece of land for the benefit of another piece of land. A typical example is the right of way, which allows the owner of the one piece of land to walk (or drive) over the other piece of land, usually that of the neighbor. Such a right is, for example, useful to reach a nearby road, or to ensure an escape route in case of fire. The right of servitude limits the ownership of the land on which the servitude runs. The owner is normally allowed to exclude everyone else from his land, but now agrees to no longer exclude the right holder of the servitude when he or she is exercising his or her right. The right of servitude is created on the land. The effect of this is that when the right of ownership of the land is sold and transferred to someone else, the new owner is still bound by the right of servitude.

Usufruct

The best example is the right of usufruct. A right of usufruct is the right to use and enjoy an object that is owned by someone else. The secondary right of usufruct therefore comprises the permission to use and enjoy the object of the owner, who no longer holds this permission himself. The owner now holds "bare ownership," signaling that he has given away his permission to use and enjoy the object.

The Nemo Dat Rule

The nemo dat rule holds that nobody can transfer a property right that he did not have himself inthe first place. A person who owns a thing can transfer the full ownership of it, but the holder of a mere right of usufruct may be able to transfer the right of usufruct but cannot transfer the full ownership of the object.

Competence to dispose

The nemo dat rule is implemented in the requirement that a person transferring a property right must have the competence to dispose of that right. When the competence to dispose is lacking, this person cannot transfer the right to someone else.

Personal Security

When one person undertakes the liability for someone else's debts.

Property Security

When the goods of a person, usually of the debtor himself, can be sold off to pay the debt. Well-known forms of property security are mortgage (hypothec) and pledge.