Topic 8 - property law Flashcards
The law of property
covers the legal relationship between persons and things eg “property” rights (or proprietary rights) are enforced against a thing or property object
not all property objects are tangible - meaning not all property objects can be touched or picked up
Difference between property rights and personal rights
personal rights allow you to only sue other people, personal rights are not enforced against a property (unlike property rights) eg phone (personal)
personal rights don’t survive insolvency however property rights do
property rights can be enforced against the whole world
What is property?
The word property can be used to refer to;
- the thing itself, that Is, the property object eg a car
- or a persons ownership right in that thing
Lessee
person who holds property under a lease contract entered into with the owner if the property
The ‘bundle of rights’ theory of ownership and property
1) to possess (physically control the property object)
2) to use and enjoy the property object
3) to exclude others from using and enjoying the property object
4) to transfer the property object (eg hire out, sell or gift the property object)
leases and licenses
leases tend to last for longer and give greater rights
it is possible to have possession of a property object without having property rights and it is possible to have property rights or ownership without having possession
Title
it can refer to full entitlement to all of the bundle rights, carrying with it all the benefits and burden of ownership
- the legal justification for a particular ownership right such as the right to transfer the property object
- the evidence of an ownership right
reasons it is hard to define Title
sometimes title is a residual right that is subject to someone else’s more immediately right eg if house has a bank mortgage (form of security), bank can sell house. If you don’t pay, but once mortgage is paid in full you can get full ownership
- although title is difficult to define precisely, the exact time that ‘title’ is transferred can be significant eg buying a car through a private sale but picking it up later
Default rule 1 relating to Title
1) under an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made
2) for the purposes of subsection (1) it is immaterial whether the time of payment or the time of delivery, or both is postponed
Default rule 2 relating to Title
3) if there is a contract for the state of specific goods, and seller is bound to do something to the goods for the purpose of putting the goods into a deliverable state the property in the goods does not pass to the buyer until
a) the thing is done and;
b the buyer has noticed that the thing is done
The nemo dat rule
the general common law rule relating to the transfer of personal property rights is known as the nemo dat rule
- no person can give a better title to goods than they have (common sense)
- seller never had any property rights to sell
- seller no longer had any property rights to sell
exceptions to the nemo dat rule
s153 says that contrary to the nemo dat rule a fraudulent 2nd sale by a seller still in possession can be valid
3 areas that real property is considered in
land
estates in land
interests in land
land
the property object
fixtures - things that are interested to be permanently attached to land or buildings
estates in land
= the extent of the right to use and enjoy the land
Includes freehold estates in fee simple
freehold life estates
leasehold estates
interests in land
easements (eg a right to walk or drive over, known as a “right of way”)
mortgages - (a property right in the land created by contract and given by a debtor to a creditor that allows the creditor to sell land and use the sale proceeds to repay the debt if the debtor does not pay
Personal property
all property that is not real property (realty)
two main subgroups of personal property
choses in possession
choses in action
choses in possession
tangible items
chattels or goods
eg timber in a backyard, book, car
where lawful and physically possible property rights can be enforced by taking possession
choses in action
intangible items (cant be touched)
eg an accountant recievable, copy right, a cheque
the only way to enforce rights is through legal action
two most important acts dealing with personal property
the contract and commercial law act
the personal property securities act
concepts relating to real property
state owns the land and individuals and corporations own estates or interests in land but this theory is of no practical consequence and it has been recommended to be abolished
security interests
a security interest is a property right that the secured party holds for the purpose of securing performance for an obligation. The property object that is given and taken as security is called “collateral”. A security interest is created by contract
why are security interests put in place?
security over property lets a lender exercise rights against the property if the borrower defaults (fails to pay) the lender can sell the property (collateral) and use money from the sale to reduce the debt owed, the surplus must be paid to the debtor
Mortgage
security interest over land is usually a mortgage
mortgages - (a property right in the land created by contract and given by a debtor to a creditor that allows the creditor to sell land and use the sale proceeds to repay the debt if the debtor does not pay
debtor
person etc who owes money
registration systems
allow for different types of interest to be registered in public register (which can include security interests)
two types of reigstration on regimes
title based reigsters
interest based reigsters
title based registers
records who owns or has title to the property object as well as those who have only interest in the property object
interest based registers
records only certain types of interest in the property object
A torrens system
all types of estates (eg who owns the free hold estate) and interest (eg mortgage end rights of way) can be recorded on the title and can be found by searching the computerised title
The doctrine of indefeasibility
means that once an estate or interest is registered in the title, it can only be defeated by other estates or interests that are registered on the title
exceptions of indefeasibility
the main exception is fraud committed by the person seeking to rely on the doctrine of indefeasibility ( but fraud committed by someone else is not an exception)
fraud definition
section 6 of the LTA (land transfer act) 2017 defined fraud as forgery or other dishonest conduct of an owner or agent of an owner in acquiring an estate or interest in land
can the registration of land be cancelled?
Yes. It can be cancelled by the high court after considering how the land was acquired, the length of time the parties have owned or occupied the land, the nature of any improvements made, the special characteristics of the land and its significance
The compensation principle
means that the state will provide compensation if a person suffers loss as a result of the doctrine of indefeasibility
The personal property securities act 1999
PPSA provides a statutory regime for registering security interests over personal property being an interest based register
- the regime does not tell us who owns personal property the regime discloses only if security interests have been registered against a particular persons interests in personal property (major problem with ppsa as someone could grant a security over something they do not own and the original owner can end up losing it)
