property

what is property?

the legal right to possess, control, use, and transfer resources, as well as the legal right to exclude others from our resources (rights give property value)

property is the oldest

area of the law

think of property as a

bundle of rights

the property bundle of rights include

1. right to possess

2. right to use

3. right to control/exclude

4. power to transfer

5. power to devise or bequeath

6. right to gain income

7. immunity from damage

8. immunity from expropriation

right to possess

to keep or own the property

right to use

to use/don’t use the property as you see fit

right to control/exclude

to determine who else can and cannot use the property

power to transfer

to sell or give the property to someone else

power to devise or bequeath

to leave it to someone in your will

right to gain income

to receive income generated from the property

immunity from damage

to not have your property damaged by others

immunity from expropriation

to prevent others from taking it from you against your will

all property rights are limited

none are absolute

classifications of property

1. real property v. personal property

2. tangible property v. intangible property

3. public property v. private property

real property

land (could be seas, oceans, and rivers as well) and all things firmly attached to it, as well as legal interests in the same

personal property

everything else… hamburgers, running shoes, stock in a corperation. etc.

ownership of “land” includes

• surface of the property

• air above the property

• subsurface below property

limits exist to air and subsurface rights

fixture

personal property that has become real property

• by attachment to the land or its buildings

• because its use has become closely associated with the use to which the land is put

tangible property

property that has a physical existence (hammers, cars, iphones, clothes)

intangible property

property that has no physical existence (rights under a patent or copyright)

public property

property owned by the government or some unit of the government

private property

property owned by an individual, a group of individuals, a corporation, or other business entity

interests in real property

the bundle of rights and the powers of land ownership are called an estate

four common estates:

• fee simple

• life estate

• leasehold estate

• easements

estate

type of interest in real property

fee simple

maximum estate allowed by law. owner has all legal rights and powers to use, possess, and transfer the land

fee simple is absolute

no conditions or limitations are placed on the owners rights (cleanest, most complete way to own property)

fee simple defeasible

may have a condition attached to the transfer of the land (some rights, but they can be taken away)

life estate

ownership in land for the lifetime of specified person

• person with a life estate has a present interest in the land

ex language “to jennifer jones for her life”

• absent other arrangements by the grantor, upon the death of the person with a life estate, ownership of the land reverts back to grantor

• under these circumstances, during the life estate, the grantor has a reversion interest in the land

• during the life estate, a reversion interest is a future interest in the land

• rather than retain a reversion interest, the grantor may make arrangements for the land to pass to a third party upon the death of the person with a life estate

• under these circumstances, during the life estate, the third party has a remainder interest in the land

• during the life estate, a remainder interest is a future interest in the land

leasehold estate

• property right granted by a landlord to its tenant(s).

• holders of a leasehold estate (tenants) have a qualified right to possess, use, and transfer the land

• tenant cannot waste the land, which means they cannot do something that substantially reduces the value of the land

an affirmative easement is…

the right to make a certain use of another persons property

• a right of passage across land owned by someone else

a negative easement (very rare)

prevents another landowner from making certain uses of its own property

easements may be acquired by…

• grant

• reservation

• prescription

• necessity

grant

written grant that gives a person the right to use some part of the land in some way

reservation

owner sells land and in the deed reserves the right to use some part of the land in some way

prescription

someone conducts an open and continuous use of another persons land over a long period of time and the owner fails to stop that use

necessity

someone must be allowed to use land he does not own out of necessity (there is no other way to get to the land that person does own)

concurrent ownership

personal and real property interests can have concurrent owners

• they do not own a specific identified piece of the property

• each concurrent owner has an undivided interest in the entire property

types of concurrent owners

• tenants in common

• joint tenants with right of survivorship

tenants in common

1. tenants in common can own different percentages of the resource

2. when a tenant in common dies, the ownership interest of that tenant passes to his/her estate

3. can recieve ownership at different times!

joint tenants with right of survivorship

1. joint tenants own equal percentages of the resource

2. when a JTWRS dies, the ownership interest of that tenant automatically passes to the other joint tenants, not to the estate of the deceased

3. get ownership at the same time!

bailment

occurs when an owner (the “bailor”) delivers its personal property to another person (“the bailee”) who has a duty to later return or otherwise dispose of the personal property according to the directions of the owner

• a bailment is an express or implies contract between the bailee and bailor

bailments examples

• you lease a piece of equipment

• you store your car in a friends garage

• you hold your date purse when they go to the bathroom

bailment in simple terms

using, holding, or storing, someone elses property

types of bailments

• for the sole benefit of the bailor

• for the sole benefit of the bailee

• for the mutual benefit of both parties

the bailee has a

duty of care with respect to the bailors personal property

• the care required to satisfy that duty of care depends on the nataure of the bailment

mutual benefit bailment DOC

resonable care

sole benefit of bailor DOC

lower duty of care

sole benefit of bailee DOC

higher duty of care

how do you come to “own” property?

• production

• purchase

• gift

• possession

production

a person owns the property she makes unless she has agreed to do the work for another person (in which case, the other person owns it)

purchase

a person obtains ownership by buying the goods (only to the extent that the seller was able to sell)

gift

no purchase, the donor gives the property to the donee

gift requires

• donor intends to make the gift

• donor delivers the gift

• donee accepts the gift

possession

can you obtain ownership merely by possessing property?

• is possession 9/10 of the law as the saying goes? can be 0/10 or 10/10, depends

different types of property

• never owned

• abandoned

• lost

• mislaid

• real property owned by another

rule of first possession

the first person to possess perviously un-owned things becomes the owner.

ex: meteorite

FINDERS KEEPERS

abandoned property

owner intentionally placed the property out of his possession with the intent to relinquish ownership of it

• intent measured by assessment of all the circumentants

• the first person to possess abandoned property owns it!

( rule of first possesssion )

lost property

owner did not intend to relinquish possession of the property

• the finder of lost property becomes its owner by possessing the item and following a statutory precedure

not the first rule of possession

BEST RIGHTS & SECOND BEST RIGHTS

owners finder

prior to the expiration of the statutory period for the original owner to claim the property (lost property)

• the original owner has superior rights to the property than the finder

• the finder has better rights than anyone else

mislaid property

• owner intentionally placed property somewhere, but then accidentally left it there, not intending to relinquish ownership.

• finder has no rights in the property EVER!

• person in possession of the real property on which the personal property was mislaid has the right to hold the property for the true owner and has better rights to it than anyone other than the original owner

adverse possession

a person in possession of land owned by someone else may acquire valid title by using the land for a set number of years set by statute (20 yrs)

• only applies to land, NOT personal property

for adverse possession, possession of land must be

• open and notorious

• actual and exclusive

• continuous

• without permission

• for the prescribed period of time

title

• term used to refer to ownership of property

• also refers to the document used to register ownership with the state

ex) a car title

deed

document of title that transfers ownership of land (ONLY LAND)

types of deeds

• warranty deed

• special warranty deed

• quitclaim deed

warranty deed

guarantees that the property is free of encumbrandes (anyone claiming that they can use part/all of the land)

special warranty deed

specifies certain legal claims against the land, but guarantees no other claims exist

quitclaim deed

no guarantee other than the seller surrenders all claim to the land

what are security interests?

when a lender obtains an interest in property in exchange for extending credit

how do security interests work?

if the borrower defaults on a debt, the lender can seize/sell the object of the security interest to satisfy the debt

mortgage

to provide security for a loan, the property owner grants the lender a security interest in the property owner’s house and land

mortgage involved two parties

1. the lender

2. the property owner (the borrower)

every state has either the

title theory v. lien theory

kansas has the

lien theory

title theory

• protects the lender

• lender holds the title throughout the loan period

• repossessing land is much easier

lien theory

• protects the borrower

• title stays w the borrower

• issue is the bank has to go through a lot more when foreclosing

deed of trust

to provide security for a loan, the property owner executes a deed of trust, which conveys to a trustee the title to the property owner’s land and house. the trustee holds the title for the benefit of the lender until the loan is repaid.

security interests in land

• mortgage

• deed of trust

parties involved in a deed of trust

• the lender

• the trustee

• the property owner

secured transaction

involves a creditor who has sold something on credit or made a loan to a debtor who agrees to give the creditor a security interest in a valuable object (collateral)

collateral can be

anything of value

examples of collateral in a business setting

• equipment

• inventory

• accounts receivable

• “after-acquired” property

attachment of a security interest

a security interest becomes effective when it “attaches”

attachment takes place when

1. the secured party has given value

2. debtor owns the collateral, and

3. written security agreement containing a reasonable description of the collateral is signed by the debtor