Introduction – What is Property
A. Social relationships between people with respect to things in which people have different sets of rights which are given to you.
B. A bundle of rights. Not having one of the rights does not eliminate “property” (example, bankruptcy – right to sell, but not gift)
1. Right to possess demupt
2. Right to exclude
3. Right to transfer – right to gift/sell
4. Right to use
5. Right to modify
6. Right to destroy
C. We don’t necessarily know how property came to be & don’t care.
D. Types of Property:
1. Real – land and items attached to the land.
2. Personal – everything else
1. Tangible: physical incorporation
2. Intangible: Intellectual property, securities, contract rights.
E. Rights associated with property ownership:
1. Right to possess and use
2. Transfer property rights (Alienability): lease and sale
3. Right to exclude others
4. Ownership is the power over persons not merely things
F. Limitations on rights:
1. Stability of title
3. Productive use
4. Interest in providing habitable housing
5. Zoning laws, usage laws, covenants
7. Necessity and emergency
G. Steps of Property:
1. Why property?
2. What is property?
3. How do we acquire property?
4. How do we control our property?
5. How do we transfer/share property?
6. How do we as property owners control or influence other property owners?
7. How do we as a society control or influence other property owners?
I. First Possession: Acquisition of Property by Discovery and Capture.
A. Theories of acquiring property:
1. First in time, First in right (Occupancy Theory)
The first person to take possession an un-owned thing owns it. A prior possessor prevails over a subsequent possessor.
a. Preserves the peace – Prevents fights to push off first occupier.
b. Efficiency – Right to have until one with a superior right shows up. Avoid wrangling until then.
c. Need for initial allocation – lets private ordering do it without government involvement.
d. Acquisition by capture may seem archaic, but similar rules apply to acquisition of natural resources like oil, gas, and water.
2. Labor theory – John Locke – Natural Rights
a. If one mixes labor to land, the addition of the labor to the land gives one property rights in the land.
b. Only works if you are the first to use the land.
c. Law of accession: The acquisition of title to personal property by bestowing labor on raw materials to convert it to another thing.
ent use of what we have.
2. Incentive Benefits (dynamic) – Incentive to improve the property (efficient use of resources) – Encourage investments that lead to higher productivity. Society benefits – Nice homes produce more tax revenue, attractive neighborhoods.
C. Why do we forbid Trespass?
1. Violates property rights and interferes with the benefits of property.
2. Promotes less incentive to invest in and conserve the land if trespass is allowed, and it would lead to overinvestment in self protection.
3. What if I can argue that I can put someone’s house to a higher use than they can? If I could, I could buy it or a substitute. Courts are poorly equipped to make these judgments. We don’t want overinvestment in home protection measures.
4. A trespasser does not have rights as against owner, but has rights as against everyone else.
5. Owner cannot himself trespass in order to retrieve the animal, must bring judicial action.
6. Reasons for disfavoring: Courts are poorly equipped to make judgments; we do not want overinvestment in home protection measures, cost of self-help is higher, you can but it or substitute it.