Week 1 - Property law

What is property law?

area of law that deals with legal relationship between a person and a thing

Law of obligations

• legal relationship between persons

• only binding on the parties

• few formalities

• freedom of contract

Property law vs law of obligations

Property law

• real rights against the whole world (erga omnes)

• follow set principles

• can be enforced broadly, even against 3rd party individuals

Law of obligations

• personal rights against specific persons (inter parties)

• transferred through assignment or delegation

• rights enforced through claims against specific individuals

DCFR book 8 (topic, primary asset type, key focus)

topic

• acquisition and loss of ownership of goods

primary asset type

• Tangible movable property (goods)

key focus

• Transfer of title, good-faith acquisition, protection of ownership (vindicatio)

DCFR book 9 (topic, primary asset type, key focus)

topic

• proprietary security rights in movable assets

primary asset type

• Movable assets, claims, rights

key focus

• Encumbrances to secure debt (pledges, retention of title, security assignments

DCFR book 10 (topic, primary asset type, key focus)

key focus

• trusts

primary asset type

• any asset assigned to a trust fund

key focus

• segregation of assets held by a trustee for beneficiaries or specific purposes

principles of property law (7)

1. Droit de suite

2. Right of separation

3. Nemo plus principle

4. Principle of priority

5. Principle of specificity

6. Principle of publicity

7. Numerus clausus

Droit de suite principle

the real right (right in rem) attaches to the property itself, even after the property has been transferred, the creditor can invoke their real right

right in rem

• real right

• an absolute legal right that attaches directly to a specific asset or object, rather than to a person

• It gives the rights holder direct control or authority over the property, which can be enforced against anyone in the world (erga omnes)

right in personam

• personal right

• is a relative legal claim that entitles one person (the creditor) to demand a specific performance, act, or omission from another specific person (the debtor)

• a personal right attaches to a relationship between persons (inter parties)

Right of separation

• the right of separation allows the transferee to claim their property back from a transferor’s bankruptcy estate if they are the rightful owner

Nemo plus principle

you cannot transfer more property rights than you have

principle of priority

older right is the stronger right

principle of specificity

• a real right can only exist over a specific, individually identified, and existing object

• You cannot hold a real right over a vague category, an unseparated quantity, or future property that does not yet exist

principle of publicity

requires property rights to be publically registered or disclosed

numerus clausus

• parties can only create real rights (in rem) that are explicitly recognized and defined by law

• Unlike contract law, where parties enjoy freedom of contract

what are the 2 dimensions of numerus clausus

1. typenzwang

2. typenfixierung

typenzwang

Parties are strictly forced to choose from an exhaustive list of recognized property rights created by statute

typenfixierung

The internal content, rules, and boundaries of each recognized property right are fixed by law.

types of transfer systems

• Consensual transfer system

• Traditional transfer system

Consensual transfer system

• Ownership passes the moment the contract of sale is concluded

• contract itself transfers ownership of the buyer

• without requiring any physical delivery (traditio) or registration

solo consensu

• the principle that consensus about the contract suffices to pass ownership

what 2 roles does a contract serve in a consensual system?

1. it creates the obligation (causa)

2. transfers the real right (ownership) at the exact moment the agreement is reached

Traditional system

• transfer of ownership in principle requires transfer of the possession of the thing (delivery)

• a separate legal act is required to transfer ownership (contract)

traditio

transfer of possession

Ownership

right over a thing (property right)

DCFR ownership (art.)

art. VIII - 1:202

• ownership is the most comprehensive right a person can have over property

• exclusive right to use, modify, destroy, dispose of and recover

France ownerhsip defintion (art.)

• art. 544 FCC

• right to enjoy and dispose of things in the most absolute manner

Common law definition of ownership (+case)

• no clear definition

• because there is a more relative approach

• armory v delamirie

armory v delamirie

facts

• chimney sweeper C found a jewel in the chimney

• C asked jeweler J how much it is worth

• J took the jewel

• C took him to court

question

• C found the jewel

• can he claim ownership

reasoning

• C is able to claim ownership

• but C does not have an absolute right to the jewel, that belongs to an unknown person

Possession vs Ownership

• civil law systems draw a strict, fundamental distinction between ownership (legal right) and possession (factual state)

Possession

• factual power or physical control excercised over a thing

• represents physical control rather than a legal title

ownership

• most comprehensive legal right a person can have over a thing

• gives the owner absolute right to use property

DCFR possession (art)

art. VIII - 1:205

types of possession in DCFR (which art)

1. Possession by-owner possessor (art. VIII - 1:206)

2. Possession by limited right possessor (art. VIII - 1:207)

3. Possession through a posession agent (art. VIII - 1:208)

Possession by owner possessor DCFR (defintion + elements + art)

a) has physical control over a good

b) with intent to exercise ownership for oneself

*hence there is no need to be the actual legal owner)

• art. VIII - 1:206

Possession by limited right possessor

a) physical control over a good

b) with the intent to recognize limited real right

• holder acknowledges that someone else is the ultimate owner

• but claims a specific limited real right over a good against everyone

• art. VIII - 1:207

Possession agent

a) physical control over a good on behalf of someone else

b) under their direction or personal contact

• holding the item for another person (an owner-possessor or a limited right possessor) and recognizing that persons possessory status

Noorlander v Ligvoet

Issue

• N and L are neighbours

• they agreed that L can dump horse shit on N’s property

• N did not like this and wanted it to stop

Question 1

• can the obligation be enforced?

Solution 1

• Yes, since N has agreed to allow L to do so

• But this is enforceable under contract law (law of obligations), not under property law

Issue 2

• ownership of N’s property is transferred to the daughter

• L continued to throw horse shit on N’s property

• daughter took L to court

Question 2

• Can daughter’s absolute right be acted upon

Solution 2

• Yes,

• contract law is only binding between N and L (inter-parties)