(2a) LEGL 2700

Property

Legal right to exclude others from resources that are originally possessed or are acquired lawfully without force, theft, or fraud

__Absolute__ but __not infinite__

Property is ____ but __not ______

__ambiguous__

Property Boundaries can be ____

legislation and case law

We rely on __ __and__ ___ to explain the boundaries of property

the free market

Property is the foundation of ____

**Western Political Theory**

Government exists because there is not enough stuff to go around

1. State planning
2. Private property

Two Poles of **Western Political Theory**

State planning

* tell you exactly what you do, where you work, etc,


* Similar to communism

Private property

* lets you freely trade, use and acquire private property


* Similar to the US

achievement of prosperity; incentives

Property is central to society’s ____ and promotes ____

divisible

Property Makes resources easily ____

__divisible__

Property Enables entrepreneurs to use property to begin a business because property is ____

capital formation

Property Establishes conditions for ____

1. Real Property
2. Personal Property

**Two Divisions of Property**

Real Property

* Land and interests in land
* Mining rights, real estate, etc.

Personal Property

* All movable resources
* Two types:


1. Tangible – can physically touch
2. Intangible – securities, trademarks, intellectual property

Land ownership consists of more than surface of the property

Note about Property Boundaries in the Physical World

2-dimensional; 3-dimensional

Real Property is referred to in law as a ____ boundary (can be found in the Deed Room of your county), while in actuality it is ____

**Air rights**

* You can occupy and use it according to the laws in your area
* You can sell your air rights over your land, can be lucrative
* Example: drones

**Subsurface rights**

You can sell the things under your land, but you have to provide them access through your surface land

1. **Riparian rights**
2. **Prior appropriations doctrine**
3. **“Rule of Capture”**

**3 Subsurface rights**

**Riparian rights**

“water runs with the land”, water is not scarce, you cannot sell water rights, cannot be diverted or channeled,  typical of the east coast

**Prior appropriations doctrine**

“first in time, first in right”, water rights can be sold separately from the land, can be diverted or channeled, typical of the west coast

**“Rule of Capture”**

* land owners have the right to capture the water below their property, regardless of the effect on their neighboring properties, first to it gets it
* now you can capture oil and gas

**fixture**

an object of personal property that has become real property or become so associated/essential with the real property that it might as well be

Fixtures on land

* A **fixture** is an object of personal property that has become real property or become so associated/essential with the real property that it might as well be
* Example: carpet (as opposed to a rug), tree house, landscaping, light fixtures

make sure that its set in the contract

In order to avoid arguments over fixtures, ____

Coastal Oil & Gas Corp. v. Garza Energy Trust et al., 268 S.W.3d 1 (Tex. 2008)

* Investors bought a large plot of land, and had leased share 13 (terms were that the shareholder had to pay rent and provide royalties on the natural gas fracking to the investors)


* Coastal bought the land beside them, and they ruined share 13th’s supply
* Question: Were Coastal’s acts (fracking) protected by the “rule of capture”?
* The state rule that the “rule of capture” applied and that Coastal could carry on

Briggs v. Southwestern Energy Production Co., 224 A.3d 334 (Pa. 2020)

* Briggs sues saying that the energy company was trespassing by taking their natural gas under their land
* Does the “rule of capture” immunize an energy developer from liability in trespass where the developer uses hydraulic fracturing on the property it owns or leases, and such activities allow it to obtain oil or gas that migrates from beneath the surface of another person’s land?
* PA court rules in favor of the energy company under the “rule of capture”

1. **Fee simple**
2. **Life estate**
3. **Leasehold estate**
4. **Concurrent Ownership**

4 Types of Ownership

**Fee simple**

Represents the maximum estate allowed under law

1. *Fee Simple Absolute*
2. *Fee Simple Defeasible/Subject to Condition Subsequent/Subject to Executory Interest*

2 Types of **Fee simple**

*Fee Simple Absolute*

involves no limitations or conditions attached; owner has maximum legal rights and powers to possess use, and transfer land

*Fee Simple Defeasible/Subject to Condition Subsequent/Subject to Executory Interest*

may have a condition attached to its transfer

**Life estate**

* grants ownership in land for the lifetime of a specified person (or remainder)


* example: “O Kenneth for life, then A & B”
* You only want to buy from A & B, if Kenneth is dead

**Leasehold estate**

property rights granted to tenants by a landlord

**Concurrent Ownership**

more than one person can own the same property, undivided (multiple people own it collectively), example: shares of an organization

1. *Tenancy in Common (TIC)*
2. *Joint Tenancy [with right of survivorship] (JTWROS)*

2 Types of **Concurrent Ownership**

*Tenancy in Common (TIC)*

multiple people, can own jointly or in proportions

*Joint Tenancy [with right of survivorship] (JTWROS)*

only 2 people, own 50/50, when 1 dies the other gets it (overwrites your will/matters of the estate\*\*)

1. **Easements**
2. **Bailments**

2 Specialty Applications of Property

right to cross over land, places a particular usage of land over your right of exclusive ownership

**Easements**

1. Easement by reservation
2. Natural easement
3. Negative easement
4. Easement by prescription
5. Utility easement

Types of **Easements**

Easement by reservation

or by grant, when you sell the property to someone else, and/or you reserve some for yourself

Natural easement

allows owner to get from their land to the nearest public road, if a subservient property is landlocked the dominant property has to provide some way for them to get to the main road

Negative easement

prevents adjoining landowner from doing anything that affects their neighbor, ex: negative easement to build only one story so they don’t mess up your view

Easement by prescription

don't own the property nor right to pass, one person has passed through the others property without proper procedure, but they have done it for so long so they are allowed a prescription

passing through your neighbor’s front yard to catch a bus for seven years, then you earn an easement of prescription

Example of Easement by prescription

Utility easement

given in writing to a utility company, usually in deed

**Bailments**

* Temporary, intentional change of possession, not of ownership
* goods placed into another’s possession to be returned in the future or disposed of as instructed by bailor, intentional possession to another person with the understanding that they will either return it or dispose of it according to the bailor

Bailor

Owner of the object

Bailee

Possessor of the object

coat check (bailor is you, bailee is the coat checker)

Example of a Bailment

1. Bailment that benefits the bailor
2. Benefit of the bailee

Bailment Benefits/Liabilities

Bailment that benefits the bailor

having a lamborghini housed at a friend’s while on vacation, want it back unharmed

Benefit of the bailee

letting your roommate borrow your computer, want it back unharmed

Mutual benefit bailment

paying a storage keeper to keep your storage, shipping something through the mail, staying at a hotel

All of these benefits/liabilities are limited by contracts

Note about bailments benefits/liabilities

1. Acquiring Resources Through Exchange
2. Acquiring Resources Through Possession
3. Acquiring Resources Through Confusion
4. Acquiring Resources Through Accession
5. Acquiring Resources Through Gift

5 Legal Ways to Acquire Resources

Acquiring Resources Through Exchange (contracts)

* the most common way to legally acquire/exchange resources

**Contract rules**

Control the way owners make agreements to exchange resources in the property‐based legal system

* Allow owners to commit legally to future exchange of resources
* Enable an owner to sue another if agreements in the future are broken by one of the owners
* Example: trading money for a good

1. **Rule of first possession**
2. **Adverse Possession**

2 ways of Acquiring Resources Through Possession

**Rule of first possession**

First person to reduce previously unowned things to possession becomes their owner (meteor lands on your land, it's yours)

1. Legally abandoned items
2. **Lost Items**
3. **Mislaid Items**

3 Types of Items you can Acquire through Possession

Legally abandoned items

catching a baseball, you become the first to possess it

**Lost Items**

things that are lost can gain a new owner, personal property that was unintentionally left, the first person to find it (reduce it to possession) gets it (example: a wallet on the floor)

**Mislaid Items**

personal property that was intentionally set down then forgot about it, so the premisses owner gets it, a lost and found(example:a wallet on the restaurant table)

**Adverse Possession**

(not easement by prescription) provides ownership of land (squatter’s rights) (you will have to pay taxes for it) under state statute when possession qualifies

1. Open and notorious – must be obvious
2. Actual and exclusive – must be occupied exclusively by the person seeking adverse possession, not with the owner
3. Continuous – usually a 7 to 20 year period
4. Wrongful – can not be gained if the owner has granted permission for you to stay on it
5. For a prescribed period of time

5 aspects of adverse possession:

Intent

In adverse possession ____ does not matter, you just have to be there without permission

move for quiet title

You do not automatically gain adverse possession, you have to ____

False: You CANNOT adversely select government owned land

True/False: Government land can be subjected to adverse possession

Happens most in suburbia, property lines are overstepped by fencing and can move to quiet title

Where adverse possession happens most

Favoring adverse possession promotes the best usage of land and punishes those who do not properly use their land

Why our legal system promotes adverse possession

Acquiring Resources Through Confusion (Doctrine of Confusion)

Occurs when fungible goods are mixed together (example: 2 gallons of gasoline that are mixed together, you can't separate my gallon from yours)

* The rules for untangling depend on the circumstances of the tangling. How did the goods become tangled in the first place? Was it an honest mistake? Was it purposeful?

Owners hold a proportional share of the confused goods if the confusion occurs

When the tangling is by honest mistake

boundaries to the concept of property

Doctrine of confusion illustrates importance of ____

Accession

* Something that is added (often through the transformation of raw materials


* Example: Building your own furniture

Acquiring Resources Through Accession

If someone steals your raw materials, you can reacquire what the raw materials have been added to

Law of accession

When people apply efforts to any raw materials and change its nature into finished products, they own the finished products

Acquiring Resources Through Gift

Donor who owns something gives it to a donee, who becomes the new owner

1. Intends to make the gift
2. Delivers the gift by physical transfer to the donee (deed/keys to a house count for property)

Gift does not take place until the donor:

Testamentary gift

Made through a will (cannot deliver it physically, but the will counts as delivery)

Title

Ownership represented by a physical document registered with the state for certain resources (example: cars)

1. type of deed
2. registration statutes

Two protections in Property Registration

type of deed

protect the buyer of the property

registration statutes

protect the buyer and lenders of the property, information filed about the property so that everyone is aware of all of the issues of the property

Deed

Document of title that transfers ownership of land

1. Warranty deed
2. Special warranty deed
3. Quitclaim deed

Types of Deeds

Warranty deed

best one, promises that the guarantee receives the guarantor’s full ownership of the land

Special warranty deed

a step down from a warranty deed, specifies that there are certain legal claims against the land

Quitclaim deed

most sus one, quitting any claim guarantor has against the land, make no guarantees

The buyer provides security interest that the lender can foreclose upon if the buyer fails payments

Property and Security Interests

secured; unsecured

* Mortgage is ____ and house can be foreclosed upon
* Credit cards are ____ and your stuff is not foreclosed upon

Security Interests

Two principal types are mortgages and secured transactions

Security Interests in Land

* Mortgage
* Deeds of Trust
* Land Sales Contract – land paid for in installments

Deeds of Trust

involves three parties: lender, borrower and neutral third-party trustee

Article 9

Secure interests under ____ of the Uniform Commercial Code

**Recording statutes**

* Mortgagor is lender, mortgagee is borrower
* Mortgages and deeds of trust – involves three parties: lender, borrower and neutral third-party trustee, must be registered in a recording office
* Provide notice of the security interest to potential buyers and lenders of the land

**Foreclosure**

Creditor must go through the court system to ensure that procedures are properly followed