Property law in the United States

Last updated October 31, 2023

Property lawin the United States is the area of law that governs the various forms of ownership in real property (land and buildings) and personal property, including intangible property such as intellectual property. Property refers to legally protected claims to resources, such as land and personal property.^[1] Property can be exchanged through contract law, and if property is violated, one could sue under tort law to protect it.^[1]

Interstate diversity

United States property law is primarily an area of state law, although there are also federal laws (for example, on patents and copyright) and some local laws as well (on areas such as zoning and tenancy). Property law in the states generally originates from the common law and has been heavily modified by a variety of statutes in each state. The Restatements on Property give an overview of certain areas of property law in the United States.

All three Restatements of Property to date have been far less influential than the Restatements of Contract and Torts. The project promptly went off the rails when Harry Bigelow ended up restating Wesley Newcomb Hohfeld's ideas (e.g., the bundle of rights) instead of American property law, and his successors lacked the brilliance needed for such an ambitious project.^[2] As of 2014, the Restatement's failure to address basic doctrines like adverse possession and real estate transfers had never been corrected over 75 years, three Restatements series, and 17 volumes.^[2] In the 1970s, the Uniform Law Commission's project to standardize state real property law was a spectacular failure.^[3]^[4]^[5]

Theory of property rights

Definition of property rights

There are two main views on the right to property in the United States, the traditional view and the bundle of rights view.^[6] The traditionalists believe that there is a core, inherent meaning in the concept of property, while the bundle of rights view states that the property owner only has bundle of permissible uses over the property.^[1] The two views exist on a spectrum and the difference may be a matter of focus and emphasis.^[1]

William Blackstone, in his Commentaries on the Laws of England, wrote that the essential core of property is the right to exclude.^[7] That is, the owner of property must be able to exclude others from the thing in question, even though the right to exclude is subject to limitations.^[8] By implication, the owner can use the thing, unless another restriction, such as zoning law, prevents it.^[1] Other traditionalists argue that three main rights define property: the right to exclusion, use and transfer.^[9]

An alternative view of property, favored by legal realists, is that property simply denotes a bundle of rights defined by law and social policy.^[1] Which rights are included in the bundle known as property rights, and which bundles are preferred to which others, is simply a matter of policy.^[1] Therefore, a government can prevent the building of a factory on a piece of land, through zoning law or criminal law, without damaging the concept of property.^[1] The "bundle of rights" view was prominent in academia in the 20th century and remains influential today in American law.^[1]

Acquisition of property

First Possession

Under American law, the first possessor of a property generally acquires the property.^[1] The first possessor is the first person who intends to assert control over the object and in fact exercises significant control over the object.^[10] A seminal case on first possession is Pierson v. Post.^[11] Post was a hunter who was chasing a fox through a vacant land, when Pierson, knowing it was being chased by another, killed the fox and took it away. The issue before the court is whether Post exercised enough control over the fox, a wild animal, to become first possessor.

The majority of the court cited the Justinian Code and various jurists, before concluding that possession required certain control.^[10] With wild animals, the majority held, only one who mortally wound or seize the animal can acquire possession, merely giving chase is not sufficient.^[10] The dissenting opinion would require only a reasonable prospect of capture, close pursuit in the case would satisfy the rule. The dissent cited jurists as well as the custom among hunters.^[10]

The majority and the dissent also differs in their view of the policy implications of the ruling. The majority would prefer a clear rule, easy for all to understand and allowing individuals to settle disputes with that rule.^[10] The dissent raises the issue of incentives, arguing that the "reasonable prospect" rule would incentivize hunters to hunt foxes, which are considered pests.^[10]

Adverse possession

Theories of adverse possession are summarized in an article by Thomas W. Merrill.^[12]

Types of estates

Estates and future interests

Land ownership in American law is highly complex, based on feudal categories inherited from English law.^[13] Although feudalism is no longer relevant in the modern United States, the law in most states have not been simplified to reflect modern circumstances.^[13] However, new types of land ownership is generally disallowed, under the numerus clausus principle, unless they are introduced by legislation.^[13]

In most states, full ownership of land is known as fee simple, fee simple absolute, or fee.^[14] Fee simple refers to a present interest in the land, which continues indefinitely into the future.^[14] One other type of ownership is the defeasible fee, which is like fee simple, except that it can end upon some event occurring.^[14] The defeasible fee is sometimes seen with property donated to charity for a specific use, where the grantor specifies that the ownership may end if the property is no longer used in a certain way.^[14]

Another type of present interest is the life estate, by which the grantor gives the life tenant full rights during the life tenant's life.^[14] But after his death, the estate will either go back to the grantor (known as a reversion) or to another person (known as a remainder).^[14] Remainders can be vested or conditional, based on conditions of the remainder.^[14] Remainders are "vested" when the condition of the remainder is fulfilled, even if the possession has not yet been transferred.^[14] For example, in a grant "to A for life, then to B if he graduates high school by age 18", the remainder to B vests when B graduates high school by age 18, although the possession will not transfer until A dies.^[14] There is also the executory interest, which is a future interest that cuts off a preceding interest when a condition is met.^[14]

The focus on vesting is important in many states because contingent remainders (and certain other future interests) are invalidated if they might vest after the period defined by the Rule Against Perpetuities (RAP).^[14] The Rule Against Perpetuities traditionally requires an interest to vest "if at all, not later than twenty-one years after some life in being at the creation of the interest."^[15] Any future interest not conforming to the Rule Against Perpetuities is traditionally invalid.^[14] Many states have reformed the RAP with "wait-and-see statutes" or abolished it all together.^[14]

Co-ownership

Under the common law, real estate can be jointly owned at a given time.^[16] In most states, in a tenancy in common, co-tenants each have a theoretical right to possess the whole property.^[16] Co-tenants must also share rents received from third-parties, as well as upkeep expenses and taxes.^[16] However, if they cannot work out how to divide the use of the property, one co-tenant can prevent another from taking possession, but must be liable to the ousted tenant for the rent.^[16]

Related Research Articles

Property law is the area of law that governs the various forms of ownership in real property (land) and personal property. Property refers to legally protected claims to resources, such as land and personal property, including intellectual property. Property can be exchanged through contract law, and if property is violated, one could sue under tort law to protect it.

The rule against perpetuities is a legal rule in common law that prevents people from using legal instruments to exert control over the ownership of private property for a time long beyond the lives of people living at the time the instrument was written. Specifically, the rule forbids a person from creating future interests in property that would vest beyond 21 years after the lifetimes of those living at the time of creation of the interest, often expressed as a "life in being plus twenty-one years". In essence, the rule prevents a person from putting qualifications and criteria in a deed or a will that would continue to affect the ownership of property long after he or she has died, a concept often referred to as control by the "dead hand" or "mortmain".

In property law, title is an intangible construct representing a bundle of rights in (to) a piece of property in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document, such as a deed, that serves as evidence of ownership. Conveyance of the document may be required in order to transfer ownership in the property to another person. Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, possession and title may each be transferred independently of the other. For real property, land registration and recording provide public notice of ownership information.

In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. A "fee" is a vested, inheritable, present possessory interest in land. A "fee simple" is real property held without limit of time under common law, whereas the highest possible form of ownership is a "fee simple absolute," which is without limitations on the land's use.

In English common law, fee tail or entail, or tailzie in Scots law, is a form of trust, established by deed or settlement, that restricts the sale or inheritance of an estate in real property and prevents that property from being sold, devised by will, or otherwise alienated by the tenant-in-possession, and instead causes it to pass automatically, by operation of law, to an heir determined by the settlement deed. The terms fee tail and tailzie are from Medieval Latin feodum talliatum, which means "cut(-short) fee". Fee tail deeds are in contrast to "fee simple" deeds, possessors of which have an unrestricted title to the property, and are empowered to bequeath or dispose of it as they wish. Equivalent legal concepts exist or formerly existed in many other European countries and elsewhere; in Scots law tailzie was codified in an Act of 1685 which in 1896 was given a short title as an Entail Act.

In common law and statutory law, a life estate is the ownership of immovable property for the duration of a person's life. In legal terms, it is an estate in real property that ends at death, when the property rights may revert to the original owner or to another person. The owner of a life estate is called a "life tenant". The person who will take over the rights upon death is said to have a "remainder" interest and is known as a "remainderman".

An estate in land is, in the law of England and Wales, an interest in real property that is or may become possessory. It is a type of personal property and encompasses land ownership, rental and other arrangements that give people the right to use land. This is distinct from sovereignty over the land, which includes the right to government and taxation.

Adverse possession, sometimes colloquially described as "squatter's rights", is a legal principle in the Anglo-American common law under which a person who does not have legal title to a piece of property—usually land —may acquire legal ownership based on continuous possession or occupation of the property without the permission (licence) of its legal owner.

In law, vesting is the point in time when the rights and interests arising from legal ownership of a property are acquired by some person. Vesting creates an immediately secured right of present or future deployment. One has a vested right to an asset that cannot be taken away by any third party, even though one may not yet possess the asset. When the right, interest, or title to the present or future possession of a legal estate can be transferred to any other party, it is termed a vested interest.

The bundle of rights is a metaphor to explain the complexities of property ownership. Law school professors of introductory property law courses frequently use this conceptualization to describe "full" property ownership as a partition of various entitlements of different stakeholders.

Seisin denotes the legal possession of a feudal fiefdom or fee, that is to say an estate in land. It was used in the form of "the son and heir of X has obtained seisin of his inheritance", and thus is effectively a term concerned with conveyancing in the feudal era. The person holding such estate is said to be "seized of it", a phrase which commonly appears in inquisitions post mortem. The monarch alone "held" all the land of England by his allodial right and all his subjects were merely his tenants under various contracts of feudal tenure.

In property law of the United Kingdom and the United States and other common law countries, a remainder is a future interest given to a person that is capable of becoming possessory upon the natural end of a prior estate created by the same instrument. Thus, the prior estate must be one that is capable of ending naturally, for example upon the expiration of a term of years or the death of a life tenant. A future interest following a fee simple absolute cannot be a remainder because of the preceding infinite duration.

<span title="Anglo-Norman-language text"><i lang="xno">Cestui que</i></span> Concept in English law regarding beneficiaries

Cestui que is a shortened version of "cestui a que use le feoffment fuit fait", literally, "the person for whose use/benefit the feoffment was made"; in modern terms, it corresponds to a beneficiary. It is a Law French phrase of medieval English invention, which appears in the legal phrases cestui que trust, cestui que use, or cestui que vie. In contemporary English the phrase is also commonly pronounced "setty-kay" or "sesty-kay". According to Roebuck, Cestui que use is pronounced. Cestui que use and cestui que trust are often interchangeable. In some medieval documents it is seen as cestui a que. In formal legal discourse it is often used to refer to the relative novelty of a trust itself, before that English term became acceptable.

A defeasible estate is created when a grantor transfers land conditionally. Upon the happening of the event or condition stated by the grantor, the transfer may be void or at least subject to annulment. Historically, the common law has frowned on the use of defeasible estates as it interferes with the owners' enjoyment of their property and as such has made it difficult to create a valid future interest. Unless a defeasible estate is clearly intended, modern courts will construe the language against this type of estate. Three types of defeasible estates are the fee simple determinable, the fee simple subject to an executory limitation or interest, and the fee simple subject to a condition subsequent. A life estate may also be defeasible.

In property law and real estate, a future interest is a legal right to property ownership that does not include the right to present possession or enjoyment of the property. Future interests are created on the formation of a defeasible estate; that is, an estate with a condition or event triggering transfer of possessory ownership. A common example is the landlord-tenant relationship. The landlord may own a house, but has no general right to enter it while it is being rented. The conditions triggering the transfer of possession, first to the tenant then back to the landlord, are usually detailed in a lease.

A reversion in property law is a future interest that is retained by the grantor after the conveyance of an estate of a lesser quantum that he has. Once the lesser estate comes to an end, the property automatically reverts back to the grantor.

Conversion is an intentional tort consisting of "taking with the intent of exercising over the chattel an ownership inconsistent with the real owner's right of possession". In England and Wales, it is a tort of strict liability. Its equivalents in criminal law include larceny or theft and criminal conversion. In those jurisdictions that recognise it, criminal conversion is a lesser crime than theft/larceny.

The Rule in Shelley's Case is a rule of law that may apply to certain future interests in real property and trusts created in common law jurisdictions. It was applied as early as 1366 in The Provost of Beverly's Case but in its present form is derived from Shelley's Case (1581), in which counsel stated the rule as follows:

when the ancestor by any gift or conveyance takes an estate of freehold, and in the same gift or conveyance an estate is limited either mediately or immediately to his heirs in fee simple or in fee tail; that always in such cases, "the heirs" are words of limitation of the estate, not words of purchase.

In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, refers to parcels of land and any associated structures which are the property of a person. In order for a structure to be considered part of the real property, it must be integrated with or affixed to the land. Examples include crops, buildings, machinery, wells, dams, ponds, mines, canals, and roads. The term is historic, arising from the now-discontinued form of action, which distinguished between real property disputes and personal property disputes. Personal property, or personalty, was, and continues to be, all property that is not real property.

Possession in Scots law occurs when an individual physically holds property with the intent to use it. Possession is traditionally viewed as a state of fact, rather than real right and is not the same concept as ownership in Scots law. It is now said that certain possessors may additionally have the separate real right of ius possidendi. Like much of Scots property law, the principles of the law of possession mainly derive from Roman law.

References

1 2 3 4 5 6 7 8 9 10 Merrill, Thomas W.; Smith, Henry E. (2010). Property. New York: Oxford University Press. ISBN 978-0-19-971808-5. OCLC 656424368.
1 2 Merrill, Thomas W.; Smith, Henry E. (January 2014). "Why Restate the Bundle?: The Disintegration of the Restatement of Property". Brooklyn Law Review. 79 (2): 681–708.
↑ Marion W. Benfield, Jr., Wasted Days and Wasted Nights: Why the Land Acts Failed, 20 Nova L. Rev. 1037, 1037–41 (1996).
↑ Ronald Benton Brown, Whatever Happened to the Uniform Land Transactions Act? 20 Nova L. Rev. 1017 (1996);
↑ Peter B. Maggs, The Uniform Simplification of Land Transfers Act and the Politics and Economics of Law Reform, 20 Nova L. Rev. 1091, 1091–92 (1996).
↑ Smith, Henry E. (2002). "Exclusion Versus Governance: Two Strategies for Delineating Property Rights". J. Legal Stud. 31: S453. doi:10.1086/344529.
↑ Blackstone, William (1766). Commentaries on the Laws of England, Volume 2: Of the Rights of Things. Chicago. ISBN 978-0-226-16294-2. OCLC 913869367.
↑ Penner, James E. (1997). The Idea of Property in Law. Oxford: Clarendon Press. ISBN 0-19-826029-6. OCLC 35620409.
↑ Epstein, Richard Allen (1985). Takings: Private Property and the Power of Eminent Domain. Cambridge, Mass.: Harvard University Press. ISBN 0-674-86728-9. OCLC 12079263.
1 2 3 4 5 6 Merrill & Smith 2010, pp. 17–23.
↑ 3 Cai. R. 175 (N.Y. Sup. Ct. 1805).
↑ Merrill, Thomas W. (1985). "Property Rules, Liability Rules, and Adverse Possession". Nw. U. L. Rev. 79: 1122.
1 2 3 Merrill & Smith 2010, pp. 95–98.
1 2 3 4 5 6 7 8 9 10 11 12 13 Merrill & Smith 2010, pp. 99–113.
↑ John Chipman Gray, Rule Against Perpetuities §201 (Roland Gray ed., 4th ed. 1942).
1 2 3 4 Merrill & Smith 2010, pp. 114–115.

Bibliography

Smith, Henry E.; Merrill, Thomas W. (2009). Property. The Oxford Introductions to U.S. Law. ISBN 978-0195314762.