What is Property Law

Oxford Journal of Legal Studies, Vol. 37, No. 3 (2017), pp. 588–617 doi:10.1093/ojls/gqw032 Published Advance Access February 4, 2017 What is Property Law? Eveline Ramaekers* Abstract—Property law scholars have been dealing with a number of key doctrinal questions concerning property law since the first time someone pointed at something and claimed: ‘This is mine!’ This scholarship has included questions such as: What are property rights? What kind of things can we have property rights in? What role can property law play in shaping our society? But one question that seems to have drawn less attention than the others is: What is property law? This article places the question of what property law is into the limelight. It tackles this question in four steps: (i) it asks why the question is a valid one in the first place; (ii) it presents an abstract model outlining the building blocks of property law; (iii) it discusses how to separate property law from other, adjacent fields of law; and (iv) it analyses the impact that developments in EU law have on the main question of what property law is. Keywords: property theory, EU property law, comparative property law 1. Introduction Property law scholars have been dealing with a number of key doctrinal questions concerning property law since the first time someone pointed at something and claimed: ‘This is mine!’1 This scholarship has included questions such as: What are property rights? What kind of things can we claim property rights in? What do we expect from rules governing property, ie what roles do property and property law play in shaping our society and what roles do we want them to play? But one big question that seems to have drawn less attention than the others is: What is property law? A deceivingly simple question, the answer to which, however, is likely to be complex. It is a difficult * Assistant Professor in Private Law, University of Amsterdam. Email: E.Ramaekers@uva.nl. I am grateful to Bram Akkermans, Susan Bright, Sjef van Erp, Graham Reynolds, Jan Smits and André van der Walt for their comments on earlier versions. Any errors remain my own. Dedication: This paper is dedicated to the memory of Professor André van der Walt, who inspired me to write it. He is sorely missed. 1 cf the words meum esse, used in Roman legal procedure by parties claiming that a certain object was theirs: G Inst 4.16; M Kaser, ‘The Concept of Roman Ownership’ [1964] Tydskrif vir hedendaagse Romeins-Hollandse reg 5, 7–8. ß The Author 2017. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com AUTUMN 2017 What is Property Law? 589 question to demarcate. The other questions just mentioned are all closely related and there is certainly some overlap between them. The question of what property law is, however, would seem to overarch or encompass all of these other questions, particularly the first two (ie what property rights are and what kind of things we can claim them in). With this article I wish to place the question of what property law is into the limelight, but before I explain why, it is important to have a closer look at the underlying premise of the question. By asking what property law is, we presume that there is such a thing as property law, that it is a field of law that can be separated from other areas of law, delimited and labelled ‘property law’. Lawyers are used to the law being subdivided in a number of categories, eg property law, criminal law, administrative law. Dividing the law into such categories serves a number of practical and legal purposes: we use these categories to structure legal education, when writing civil codes, when deciding which judge, chamber or court to assign a case to and, in conflict of laws situations, to decide what the appropriate connecting factor is to determine which forum has jurisdiction and what the applicable law is. At the same time, lawyers are aware that it is a bit of an illusion to try and draw hard lines between various areas of law, that all areas of law connect to other areas of law. The borders are clearly fluid and when we study law comparatively we see that there is not just one way of drawing the lines either, because other legal systems than our own draw the line between, say, property law and the law of obligations differently. What is more, the influence of European law on our national legal systems challenges the categories that we have created, since European law does not use the same categories that national law uses. Nevertheless, I would maintain that the question ‘What is property law?’ remains a valid one to ask because the categorisation of law is unavoidable for the practical and legal reasons just mentioned. So why do I want to investigate this question? First of all, this is an essential question for all property law scholars, but so far it does not seem to have received the attention it deserves, or at least not the same amount of attention that some of the other ‘big questions’ just mentioned have received. Secondly, it is a necessary and unavoidable question for anyone involved in creating or reforming an area of law.2 I was first confronted with the question of what property law is when trying to describe what European Union property law is.3 Systematising and developing EU property law is the primary aim of my 2 cf W Wiegand, ‘Sachenrecht im Obligationenrecht’ in P Caroni (ed), Das Obligationenrecht 1883–1983 (Haupt 1984) 109: ‘Ehe auf den Inhalt einzugehen ist, stellt sich die Frage, wieso diese heute im Sachenrecht geregelten und auch materiell dem Sachenrecht zugeordneten Rechtsprobleme in eine Kodifikation des Obligationenrechts aufgenommen wurden.’ (‘Before one can discuss the content, the question arises why these legal concepts, which are presently regulated by the law of property and which are also substantively allocated to the law of property, were included in a codification of the law of obligations’ translation ER.) 3 Similarly, Dr Wian Erlank was faced with this question when trying to describe what virtual property law is. Both EU property law and virtual property law are new areas of law and for neither of them is it entirely clear what ‘property law’ means. Researchers trying to develop these areas of law therefore inevitably find themselves 590 Oxford Journal of Legal Studies VOL. 37 research. Because European law is competence driven it is not categorised along the same lines as national law traditionally is, ie one would be hard pressed to find legal bases in the Lisbon Treaties granting the EU the competence to create criminal law, tort law, administrative law, property law etc. Rather, the legal bases in the Treaties concern specific topics, such as the creation and functioning of the internal market, competition, fisheries and consumer protection. Therefore, providing a description of ‘European property law’ meant searching all these different areas of EU law for rules regulating proprietary relationships. That is only possible if you know what you are looking for, ie you need to know what property law is before you can go look for it within EU law. The needle needs to be defined before diving into the haystack. The question ‘what is property law?’ therefore constitutes one of the main pillars on which my research is based. I have already touched on this question specifically in the context of EU law.4 I now wish to expand on that work by dealing with this question more generally. This will constitute the main part of this article. Towards the end I will return to the EU law context and discuss what my findings concerning the question ‘what is property law?’ mean for the question ‘what is EU property law?’ An entire book could probably be written on this topic, so this article sets out to provide only a big picture answer. It can therefore be seen as a research agenda that can and will be expanded on in future, as the question of what property law is will continue to resurface. The article will first of all provide an abstract model of what property law is and then apply the model to various examples drawn from national law. Secondly, it will investigate how to draw the lines between property law and other areas of law, particularly contract law.5 The relationship with contract law will receive particular attention for three reasons: (i) express agreements between parties seem to be the main instigator of property relationships; (ii) the dividing line between property and contract is often used in comparative legal debates to say that a certain jurisdiction’s property law is ‘narrower’ or ‘broader’ than that of another jurisdiction and it therefore pertains directly to our primary question of what property law is; and (iii) the dividing line between property and contract is often used by the European legislature to demarcate its own legislative competences, which in turn provides an indication of what the European legislature does and does not consider to be property law. This could provide some inspiration in answering the question of what property law is. confronted with the question, what is property law? See W Erlank, Property in Virtual Worlds (Stellenbosch University 2012) 211–308 <http://ssrn.com/abstract=2216481>. 4 E Ramaekers, European Union Property Law: From Fragments to a System (Intersentia 2013) ch 1, s 2. 5 The relationship between property law and other areas of law is the topic of section 3 of this article. AUTUMN 2017 What is Property Law? 591 Thirdly, I will describe the characteristics of EU property law and discuss how it is similar to or different from national property law. The conclusion will provide an overview of my findings. 2. What is Property Law? Every lawyer will have a conception of what property law is. They may have a quite detailed definition in mind, or they may simply think ‘I will know it when I see it’. Some may have extensively pondered the question,6 others may simply have accepted the dichotomy between property law and adjacent areas of law, such as contract or insolvency law, since their time as law students, because these areas of law were presented to them as related but distinct fields throughout their studies. Those who have studied comparative law will understand that the borders of the field called property law are not drawn in the same way by every jurisdiction. Some have tried to redraw the lines or even to dispense with them altogether. Below follows an overview of definitions and descriptions of property law that have been presented in both academic literature and legislation. When looking at these descriptions it will become clear that it can be difficult to separate the question ‘What is property law?’ from the question ‘What are property rights?’. The latter question has produced a wide variety of answers, from Hohfeld’s description of property rights as multital rights7 to Honoré’s bundle of rights8 to Smith’s characterisation of property rights as modules connected by interfaces.9 In addition, there is a lot to be said in response to the question ‘What is property?’. Provided that one interprets the word ‘property’ as pertaining to the ‘things’ (objects, assets, etc) in which one can have property rights,10 answers to the question of what property is could include that there is a difference between tangible and intangible property,11 between personal and fungible property,12 between property resting on one’s own labour and property resting on the labour of 6 See eg C von Bar and U Drobnig, ‘Study on Property Law and Non-contractual Liability Law as They Relate to Contract Law’, European Commission, DG Health and Consumer Protection (2002) SANCO B51000/02/000574. 7 WN Hohfeld, ‘Fundamental Legal Conceptions as Applied in Judicial Reasoning’ (1916–1917) 26 Yale LJ 710–770. 8 AM Honoré, ‘Ownership’ in AG Guest (ed), Oxford Essays in Jurisprudence (OUP 1961) 107–47. The seeds of the bundle of rights theory were already present in Hohfeld’s work, but he does not describe property rights in so many words as bundles of rights. Rather, he regards them as aggregates of jural relations (Hohfeld, 96–97). Honoré, in his work on ‘Ownership’, provided the meat to the bones of the bundle of rights theory: ‘[N]ot until more than forty years later, when Honoré produced Ownership, was there a work that was widely recognized as providing the elaboration which gave the bundle of rights thesis the substance it required’, JE Penner, ‘The Bundle of Rights Picture of Property’ (1995–1996) 43 UCLA L Rev 711, 731. 9 HE Smith, ‘Property as the Law of Things’ (2012) 125 Harv L Rev 1691, 1691–726. 10 The term ‘property’ in a legal sense can be ambiguous and often its meaning needs to be discerned from the context. It can mean things or objects, property rights or property law. 11 JHM van Erp and B Akkermans (eds), Cases, Materials and Text on Property Law (Hart Publishing 2012) Chapter 1 S II.C Property Law. 12 MJ Radin, ‘Property and Personhood’ in MJ Radin, Reinterpreting Property (University of Chicago Press 1993) 37. 592 Oxford Journal of Legal Studies VOL. 37 others,13 or between property for use and property for power.14 Yet the fact that certain property is objectively treated differently, for instance because it receives stronger than average protection,15 or is subjectively deemed to be worthy of stronger protection than other kinds of property does not make the rules that protect this property any more or less proprietary. What it does is tell us something about the question of what property law should do, what we expect it to do or want it to do.16 Nevertheless, although these questions of what property is, what property rights are and what we feel property law should do have resulted in a rich and interesting academic debate, they are not immediately relevant to the present discussion and will not be dealt with further. The emphasis of this article lies on the question stated in the title: what is property law? There are quite a few descriptions of what property law is, though they vary in length and detail, and do not necessarily explain where the borders between property law and other areas of law are or how to draw them. Sagaert points out that the traditional dichotomy between property law and the law of obligations is no longer sufficient intoday’s complex society, leading to the appearance of ever more hybrid rights that have both personal and proprietary characteristics.17 Based on this observation, he proposes to dispense with the traditional in rem/in personam categories and to focus instead on what he calls the active and passive sides of any ‘patrimonial right’ (vermogensrecht), the active side being the side of the right holder and the passive side being that of the duty holder.18 If the right in question is accessory to another thing or object, on either the active or passive side, any transfer of that object automatically implies the transfer of the right as well under the maxim accessorium sequitur principale. This leads Sagaert to conclude that there are four types of patrimonial rights: (i) those which are not accessory to any object at all, whether on the active or the passive side; (ii) those which are accessory to an object on both sides; (iii) those which are accessory to an object on the active side; and (iv) those which are accessory to an object on the passive side. Van Erp argues along similar lines, stating that the boundaries between property law and contract law are becoming more and more fuzzy.19 Whereas the distinction between property and contract could traditionally be seen as a 13 K Marx and F Engels, The Communist Manifesto (Penguin Books edn 1979) 96. LT Hobhouse, ‘The Historical Evolution of Property, in Fact and in Idea’ in LT Hobhouse, Property: Its Duties and Rights (2nd edn, Macmillan 1922) 9–11. 15 As is often the case with, eg, family homes. 16 A topic recently discussed in detail by JW Singer, ‘Property as the Law of Democracy’ (2014) 63 Duke LJ 1287. I answered the question of what I think property law should be as far as EU property law is concerned in Ramaekers (n 4) ch 6, pt II. 17 V Sagaert, ‘Het goederenrecht als open systeem van verbintenissen? Poging tot een nieuwe kwalificatie van de vermogensrechten’ (2005) 42(3) Tijdschrift voor Privaatrecht 983. 18 ibid s E. 19 JHM van Erp, ‘Contract and Property Law: Distinct, but not Separate’ (2013) 9(4) European Review of Contract Law 307, 326. 14 AUTUMN 2017 What is Property Law? 593 binary one, with proprietary arrangements having binding force on third parties but contractual arrangements not having such force, these two areas of law now operate more on a sliding scale.20 At one end of the spectrum are rights with no third party effects at all; at the other end are rights with full third party effect. In between we find a number of arrangements with some, but not full, third party effect. One example would be the security arrangements under German law that accompany the Grundschuld, a non-accessory mortgage.21 Such security arrangements prevent the lender from enforcing his mortgage right if there is no actual debt.22 German legislation has made these arrangements enforceable against third party acquirers of the mortgage right.23 Gray writes that property is about control over access, that it is a power relationship—namely, the power to exclude.24 The limits on property are therefore not fixed by the ‘thinglikeness’ of particular resources, but by the physical, legal and moral criteria of excludability.25 According to Gray, rooting the concept of property in the test of excludability casts severe doubt on the dichotomy between contract and property and, rather than trying to define the quantum step that elevates contract to property, we should recognise that there exists a spectrum of ‘propertiness’:26 [In this spectrum] obligations which derive their moral force from discrete acts of affirmative consent shade gradually and almost imperceptibly into obligations whose social persuasiveness rests upon the collective acceptance of sustained acts of assertive control.27 Gretton, after a lengthy and impressively detailed discussion of the Gaian Schema of corporeals and incorporeals and the questions of what our relationship to each is and whether or not that relationship is one of ownership, points out that there is a body of law that bridges both the law of things and the law of obligations.28 In this area of law we find the law of limited rights, the principle of numerus clausus and the law of ranking, all of which apply to both limited personal rights and limited real rights (limited here in the sense of less than full ownership).29 He refers to the Dutch civil code as an example of this overlapping area of law: Book 3 of the Dutch civil code concerns the General 20 ibid. The fact that the Grundschuld is non-accessory means that it is a security right which is not linked to the underlying loan, meaning that it continues to exist even if the borrower has paid off their debt: § 1191 et seq of the German civil code. 22 van Erp (n 19) 320. 23 The Limitation of Risks Statute, or Risikobegrenzungsgesetz. 24 K Gray, ‘Property in Thin Air’ (1991) 50/2 CLJ 252, 294. 25 ibid 299. 26 Gray (n 24) 302. 27 Gray (n 24) 303. 28 GL Gretton, ‘Ownership and its Objects’ (2007) 71(4) Rabels Zeitschrift für ausländisches und internationales Privatrecht 802–51, 847. 29 ibid 847–848. 21 594 Oxford Journal of Legal Studies VOL. 37 Principles of Patrimonial Law and applies as an overarching law to both Book 5 on the Law of Things and Book 6 on the Law of Obligations. Henry Smith has described property law as the ‘law of modular things’.30 He bases his ‘architectural theory of property’31 on information costs and explains how ‘using modularity to manage complexity’32 can reduce information costs for people trying to discover the existence and content of property rights. He summarises his theory as follows: Property organizes this world into lumpy packages of legal relations—legal things—by setting boundaries around useful attributes that tend to be strong complements. The law of property in effect encapsulates these lumpy packages, or modules, semitransparently from other modules and the outside world generally [reference omitted]. Thus, property defines things using an exclusion strategy of ‘keep off’ or ‘don’t touch’ and then enriches the system of domains of owner control with interfaces using governance strategies [reference omitted]. These strategies zoom in on relations between neighbors in the case of land, and between owners (and their things) and other parties in the case of both land and personal property.33 The Ius Commune Casebook on Property Law states that ‘[i]n the most general terms, the law of property is the law dealing with things. These things may either be tangible (corporeal) or intangible (incorporeal)’.34 This general description is then further elaborated and an explanation is provided as to why property rights are different from other rights: [T]hese . . . rights to objects [ie property rights] are different from other rights as they are created in respect to an object and not vis-à-vis specific other persons. Property rights, to put it differently, have effect against third parties by their nature. Personal rights, which are rights arising from a contract, and even though they also concern an object (the ‘performance’ of that contract), are generally only binding between two or more specific parties. This is something that is shared universally between systems of property law.35 This description focuses on a distinction between types of rights. Implicitly, it suggests that the body of rules governing rights to objects (or things) is property law and that rules governing other (personal) rights belong to the law of obligations. The Restatement (First) of Property (1936), produced by the American Law Institute, provides the following description in its introductory note: The word ‘property’ is used sometimes to denote the thing with respect to which legal relations between persons exist and sometimes to denote the legal relations. The 30 31 32 33 34 35 HE Smith, ‘Property as the Law of Things’ (2012) 125 Harv L Rev 1691, 1694. ibid. ibid. Smith (2012) Harv L Rev, 1693–1694. van Erp and Akkermans (n 11) 31. van Erp and Akkermans (n 11) 37–8. AUTUMN 2017 What is Property Law? 595 former of these two usages . . . does not occur in this Restatement. When it is desired to indicate the thing with regard to which legal relations exist, it will be referred to either specifically as ‘the land,’ ‘the automobile,’ ‘the share of stock,’ or, generically, as ‘the subject matter of property’ or ‘the thing.’ The word ‘property’ is used in this Restatement to denote legal relations between persons with respect to a thing. The thing may be an object having physical existence or it may be any kind of an intangible such as a patent right or a chose in action. The broader meanings of the word ‘property,’ which include any relationship having an exchange value, are not used. The Restatement then goes on to describe four types of legal relations between persons with respect to a thing—right, privilege, power and immunity— following the Hohfeldian classification.36 This description of ‘property’ (or property law) is similar to that found in the Casebook in that it focuses on the nature of the legal relation (or right), but it differs from the Casebook’s definition in that it defines property as a legal relation between persons with respect to a thing, whereas the Casebook describes property rights as legal relations between a person and a thing. German law separates property law from the law of obligations by focusing more on the nature of objects (or things) than on the nature of various rights, in contrast to the descriptions in the Casebook and the Restatement. It employs the so-called Trennungsprinzip (principle of separation) to indicate a strict separation between the law of obligations and property law and is therefore one of the legal systems that most clearly and explicitly draws the line between these two areas of law.37 German property law applies only to tangible property,38 both movable and immovable, although it makes an exception for the right of pledge (Pfandrecht), which can also be created in relation to a right (Pfandrecht an Rechten),39 displaying a slightly inconsistent approach as to whether or not intangibles belong to the realm of property law or contract law. Spanish law provides a stark contrast to German law and its Trennungsprinzip, and not just because it includes a far wider range of ‘things’ within property law than German law does.40 Primarily, the contrast flows from the fact that Spanish law operates a numerus apertus instead of a numerus clausus of property rights.41 36 See also JB Baron, ‘The Contested Commitments of Property’ (2009–2010) 61 Hastings LJ 917, 933. van Erp and Akkermans (n 11) 34. 38 Ownership only includes ownership of Sachen (§903 German civil code), which according to §90 of the civil code means ‘Sachen im Sinne des Gesetzes sind nur körperliche Gegenstände’ (‘Objects as it is used in this law can only be corporeal objects’). Translation from N Kornet and S Hardt, Selected National, European and International Provisions from Public and Private Law: The Maastricht Collection (3rd edn, Europa Law Publishing 2013). 39 §§1273–96 German civil code. 40 Both tangible and intangible things are governed by property law; see arts 334–7 of the Spanish civil code, an English translation of which can be found at <http://www.elra.eu/wp-content/uploads/file/Spanish_Civil_ Code_(Código_Civil)%5B1%5D.pdf>. 41 B Akkermans, The Principle of Numerus Clausus in European Property Law (Intersentia 2008) 7; R Sánchez Aristi and N Moralejo Imbernón, Property and Trust Law in Spain (2nd edn, Wolters Kluwer Law & Business 2014) 54. 37 596 Oxford Journal of Legal Studies VOL. 37 This means that private individuals may create new property rights themselves, provided they ‘satisfy an actual and socially valid need and that they respect the characteristics of these kinds of rights’.42 For immovable property, it is the Land Registry, in which property rights on immovables must be registered in order to have third party effect, that applies this test to new types of property rights that parties wish to create. The law of England and Wales is not particularly straightforward on what it considers to be property law. Some definitions focus on the nature of things to define what property law is, similar to German law. Furthermore, what civil lawyers might call property law is subdivided, in English law, into land law and personal property law, evidencing the focus on the nature of various things. McFarlane writes: Property law is about rights to use things. ‘Things’ are objects that can be physically located in a particular place: such as land, bikes . . . Property law deals with two very common but impossibly difficult questions: (i) who is entitled to use a thing?; and (ii) how are they entitled to use it?43 Lawson and Rudden present quite a different description of property law. It is possibly also the most detailed description of what property law is that I have encountered so far, focusing explicitly on what property law is, rather than on what property (ie things/objects) is or what property rights are. They describe property law as follows: [T]he function of the law relating to private property is to provide us with a bag of tools with which to achieve our wishes. [I]t says what counts as property, that is to say what can be the object of its powers and protections. . . . The law of property also determines the types of interests which will be treated as proprietary, that is as being more than merely personal, familial, or contractual, and it spells out the consequences of a finding that a particular interest is proprietary. It says what we can do with these interests . . . [I]n conjunction with other branches of law—especially the law of obligations—property law protects the rights of the holders of these interests . . . [I]t deals with the transfer of property and the repackaging of proprietary interests whether inter vivos or on death. . . . It is these formalities and structures which most concern the law of property. . . . [O]ne of the main difficulties the student of property law encounters at the very threshold is the presence of abstractions rather than physical objects. . . . Property lawyers take surprisingly little interest in land or ships or machinery or animals as such, but a great deal in abstract notions such as the ‘fee simple’ in land, trust funds, stocks and shares, security interests, title and documents of title.44 My own previous research on the development of European property law led me to develop an abstract model of property law that would fit the 42 43 44 Sánchez Aristi and Moralejo Imbernón (ibid) 54. B McFarlane, The Structure of Property Law (Hart Publishing 2008) 4. FH Lawson and B Rudden, The Law of Property (3rd rev edn, OUP 2002) 4–5. AUTUMN 2017 What is Property Law? 597 characteristics of any property law system. This model of property law had to be able to incorporate the elements that property law systems share in general, without having to study the specifics of the property laws of each of the 28 Member States of the EU. In other words, the model had to be of a transsystemic nature.45 Such a model is presented in the next section. With this model all the different elements that make up a system of property law can be construed. The model contains a description of what I believe to be the constitutive elements of a system of property law and it provides a method of visualising property rights that feature within a system of property law. I designed the images that are presented in Figures 1–6 as a way to make this model of property law visually accessible, as an alternative to a mere textual explanation of the model. These images are not meant to say anything about the similarities and differences between property law systems; their only purpose is to show how different property rights can be visualised. They are intended to provide additional clarity, but they are of course based on my personal preferences for simplification through visualisation and may not appeal to everyone in the same way. The underlying theory is therefore self-contained and not dependent on the images. The textual explanation of the model is complete in and of itself, though intended to be supported by the images shown below. Once I have described the model, which shows what property law is, I will continue with the question of how property law relates to and can be separated from adjacent areas of law. 3. A Model of Property Law—The System-Cube This model shows a standardised system of property law and is not dependent upon a specific national definition.46 The model is not meant to explain where property rights come from or what their function is, but only what they look like, what their characteristics are. It is also intended to show which rules are part of property law, but not what the content of those rules should be. In this sense, the model is descriptive rather than normative. The model shows that any system of property law can be opened up to reveal its constitutive elements. Each separate property right that one encounters within the system is made up of a particular assembly of building blocks and is governed by a regulatory framework. The model visualises this internal structure of property 45 JHM van Erp, ‘Teaching Law in Europe: From an Intra-systemic, via a Trans-systemic to a Supra-systemic Approach’ in AW Heringa and B Akkermans (eds), Educating European Lawyers (Intersentia 2011) 81: ‘Transsystemic analysis uses the functional method to discover how legal traditions solve particular problems, discovering the underlying values, policy choices, leading principles, concepts, ground rules and more specific technical rules. Through trans-systemic analysis the groundwork (perhaps one could say: the matrix) of legal systems can be found.’ See also S van Praagh, ‘Preface—Navigating the Transsystemic: A Course Syllabus’ (2005) 50 McGill LJ 701. 46 This model was first developed in Ramaekers (n 4) 20–38. 598 Oxford Journal of Legal Studies VOL. 37 law. It consists of a core and a regulatory framework surrounding that core. The core represents the building blocks that make up property rights. The regulatory framework around it—which I have called the operating system— consists of the rules governing these property rights. Together, these two component parts (ie core and surrounding framework) represent property law. The core by itself only depicts property rights. The examples below focus on the core only (without the surrounding framework of operating rules) because they depict various property rights and their characteristics. The core visualises the three dimensions of property rights. The first dimension consists of the objects, the things that can be the object of property rights. Depending on the legal system, these may be only tangible or may include intangibles as well. The second dimension consists of the content of the various property rights, ie ownership, title or fee simple, and other, limited, property rights which one can have in relation to the objects. Whereas ownership is unlimited in content, in that an owner can in principle do whatever she wishes with her object unless it is contrary to the law, other property rights are more limited. A leaseholder in English law is allowed to use the freeholder’s land, but not to sell the freehold to a third party. The third dimension of property rights is the dimension of time. Property rights, as well as the objects on which they rest, can be unlimited or limited in time. For instance, ownership is unlimited in time, but a security right is usually limited to the time during which the underlying claim that it secures is being repaid.47 There is a constant interplay between the three dimensions of property rights. Under German law, one can only have a right of ownership in tangible objects, yet intangibles (eg a claim on a debtor) can be transferred and be burdened with limited property rights, such as a usufruct.48 Under Dutch law, emission rights cannot be pledged, even though other intangible objects usually can.49 The core of the model, consisting of property rights, is governed by a set of operating rules. Previously, I concluded that the operating system contains rules on creation, transfer, registration and destruction.50 These rules are part of the operating system because they each regulate a different stage in the life of a property right. Any time you want to do anything with a property right you will need rules from one or more of these categories to do so. In other words, without an operating system, property rights would exist in a vacuum. The rules in these four categories inform people how particular property rights can be acquired or passed on to someone else and what these rights can and cannot 47 cf Birks’s description of estates in land (in English law) as slices of time: P Birks, ‘Before we Begin: Five Keys to Land Law’ in S Bright and J Dewar (eds), Land Law: Themes and Perspectives (OUP 1998) 457–86. 48 § 1068(1) German civil code. 49 See art 16.42(3) of the Dutch Wet Milieubeheer (Law on Environmental Management). Emission rights are a new kind of object, introduced by European law: Directive 2003/87/EC Establishing a Scheme for Greenhouse Gas Emission Allowance Trading [2003] OJ L275/32. 50 Ramaekers (n 4) 22–23. AUTUMN 2017 What is Property Law? 599 be used for. They also tell us how a property right may be lost or brought to an end. This initial description of the operating system can, however, be elaborated. The creation and transfer of property rights are just two ways in which property rights can be acquired. Although they are the primary means and therefore essential elements of the operating system, there are other modes of acquisition. Acquisition can be either original or derivative. Original acquisition means that someone receives ‘a right which did not previously exist, which originates in the hands of the new owner or holder of the right’.51 Derivative acquisition means that someone receives ‘a right which previously belonged to someone else’.52 Each type of acquisition—original and derivative—contains further subtypes. Original acquisition can occur through creation or through occupatio, where someone takes possession of an abandoned, ownerless object (ie a res nullius), thereby becoming its owner. Cases where rights arise as of necessity—for instance, easements of necessity53—also concern original acquisition. Derivative acquisition occurs primarily through the transfer of property rights, either through an ordinary transfer or through gift or succession. Acquisitive prescription (or adverse possession) could also be seen as a type of derivative acquisition, in that the adverse possessor acquires the title previously held by the now dispossessed owner. There is, however, some discussion as to whether adverse possession is really a form of derivative acquisition or whether it is actually a form of original acquisition in that the title previously held by the dispossessed owner is extinguished and a new title arises in the hands of the adverse possessor.54 If we elaborate on the operating system in this way, we can see that it contains rules on acquisition (with its subcategories of original and derivative acquisition), registration and destruction. Although registration requirements are sometimes constitutive for the valid creation or transfer of property rights, in which case they would be part of the rules on acquisition, this is not always the case.55 It is therefore appropriate to treat them as a separate category. The operating system also contains rules relating to the third party effect of property rights. One of the distinguishing features of property rights is that they can be invoked erga omnes,56 whereas personal rights can only be invoked against one or several specific persons, based on contract or tort law. Operating 51 van Erp and Akkermans (n 11) 617. van Erp and Akkermans (n 11) 617. 53 B McFarlane, N Hopkins and S Nield, Land Law: Text, Cases and Materials (OUP 2012) ch 25, s 3.2.1. 54 van Erp and Akkermans (n 11) 738. 55 That registration is not always constitutive for the valid creation and transfer of property rights can be seen, eg, in ch 1 of the English Land Registration Act 2002, which distinguishes between voluntary registration and compulsory registration. It can also be seen in French law, where registration is necessary to ensure a third party effect of the creation or transfer of a property right, but it is not constitutive for the valid creation or transfer of a property right as such—without registration, the creation or transfer still has effet relatif (relative effect, ie as between the parties only); see van Erp and Akkermans (n 11) 900–2. 56 van Erp and Akkermans (n 11) 39. 52 600 Oxford Journal of Legal Studies VOL. 37 Figure 1. The System-Cube, Visualising the System of Property Law rules concerning the third party effect of property rights are therefore, for instance, rules that determine if and when a property right can be invoked against a third party or whether a third party transferee is protected against the invalidity of a previous transfer. These four categories (acquisition, registration, destruction and third party effect) constitute the absolute minimum of operating rules necessary to regulate the core of the system of property law, ie the property rights. Beyond these four categories lies a large grey area of rules that could be part of the operating system, but do not necessarily have to be part of it. These are, for instance, rules of insolvency law, succession law or constitutional law. How property law relates to these adjacent areas of law forms the topic of the next section. The core of the model plus the operating system together form the system of property law. This model shows the building blocks out of which property rights are made. The full model, ie the core of property rights and the operating system that governs those rights, are visualised in Figure 1. The model follows the démembrement (or subtraction) theory of limited property rights. This method stems from the French legal tradition and takes as a starting point that the right of ownership contains a number of powers, AUTUMN 2017 What is Property Law? 601 which can be divided into specific parts. These parts can be transferred to another person, in whose hands they form a limited property right. The limited property right thus consists of fragments of the right of ownership out of which it was created.57 A few examples will serve to show how this model can be applied to various national property rights. The whole cube will hereafter be called the SystemCube, whereas the individual smaller cubes of which it is made up will be called the minor cubes. Each of the minor cubes will be given its own designation. The three minor cubs in the bottom front row represent various kinds of objects (immovable, movable, intangible; or land, choses in possession, choses in action). The cubes behind each of these three (forming the dimension of depth) represent the content of a property right: the more cubes there are in this dimension, the more extensive the property right is (ie the more rights and powers it grants). On top of each minor cube at the bottom of the System-Cube are stacked two more minor cubes, representing the dimension of time. Two minor cubes on top of the rights cubes indicate that the right is in principle unlimited in time. Take one away from the top and the right is limited in time. The same is true for the time cubes placed on top of the objects cubes: take one away from the top and the object is limited in time. By taking away, or leaving in place, one or more of the minor cubes in any of the three dimensions, it is possible to visualise what the characteristics of a given property right are. It is irrelevant how many minor cubes one starts with to make up the whole System-Cube: the principal idea always remains the same. The images in Figures 1–6 make use of a System-Cube of 3  33 minor cubes, because I believe this provides a clear but not overly complex visualisation of the building blocks that make up property rights. It would, however, be perfectly possible to use more (or fewer), depending on how detailed a visualisation the user would like. A. Security Rights in Relation to Tangible Objects A security right created in relation to a tangible object reduces the width of the System-Cube, because intangibles are left out; it reduces the depth of the cube, because a security right is less extensive than full ownership; and the height above the rights cubes is reduced, because security rights only exist for the duration of the claim that they are meant to secure. A security right in relation to a tangible object can therefore be visualised by the System-Cube as in Figure 2. 57 The other possibility is to see limited property rights not so much as derived from the powers of the owner but as a limitation of those powers. Such a limitation entails that those powers that accumulate in the limited property right are not taken away from the person with the more extensive property right, but that this person can, temporarily, simply not make use of those powers. This is the so-called limitation model. See Akkermans (n 41) 116 and 415. 602 Oxford Journal of Legal Studies VOL. 37 Figure 2. A Security Right in Relation to a Tangible Object B. Right of Ownership of Emission Rights Emission rights are new objects of property rights introduced through European legislation.58 Directive 2003/78/EC59 establishes a Union-wide trading scheme in so-called greenhouse gas emission allowances. Article 3 defines an emission allowance as ‘an allowance to emit one tonne of carbon dioxide equivalent during a specified period, which . . . shall be transferable in accordance with the provisions of this Directive’. Emission rights differ somewhat from other intangible objects in that they are used up: once the greenhouse gasses have been emitted, the rights expire. Visualising ownership of emission rights through the System-Cube is therefore done in the following way: the width is reduced, because emission rights constitute an intangible object; the depth is not reduced, because we are talking about the right of ownership, the most extensive property right; the height is reduced, but not above the rights cubes as in the previous examples, because the right of ownership is unlimited in time. The height is reduced above the object cube, since emission rights are inherently limited in time. They are depleted, used up. This provides Figure 3. 58 Dutch law, for instance, treats them as vermogensrechten (patrimonial rights) because they represent a certain value and are transferable; see B Akkermans, ‘The European Union Development of European Property Law’ (2011) Maastricht European Private Law Institute (M-EPLI) Working Paper 27/2011, 8; JS Kortmann, ‘De overdracht van CO2-emissierechten nader beschouwd’ (2005) 8 Nederlands Juristenblad 392, 393. 59 [2003] OJ L275/32. AUTUMN 2017 What is Property Law? 603 Figure 3. Right of Ownership of Emission Rights This example may raise the question how it is possible to have ownership (which is thought of as ‘for eternity’ or ‘perpetual’) of an intangible thing with a limited lifespan. This question essentially comes down to whether the nature of the thing can affect the nature of the right in the thing. There is no definitive answer to this question, only theories going in various directions. As we have already seen,60 some legal systems accept that one can have ownership of both tangible and intangible objects (eg the French droit de propriété). Others state that one can only have ownership of tangible objects (eg the German Eigentum and the Dutch eigendom). These jurisdictions have a unified system of property law in that there is a single set of rules that applies to everything deemed to be property. Then there are jurisdictions, such as English law, which have a fragmented system of property law in that there are separate sets of rules for different kinds of property, eg land law for land (ie tangible immovable property) and personal property law for choses in possession and choses in action (ie tangible and intangible movable property). The more you move from one end of the spectrum (eg French law) to the other (eg English law), the 60 See section 3. 604 Oxford Journal of Legal Studies VOL. 37 more likely you will find the view that the nature of the thing does affect the nature of the right in the thing. I find myself more on the ‘French’ end of the spectrum, ie that the nature of the thing has only a very limited, if any, effect on the nature of the right in the thing. First of all, as we will see below,61 EU law is very similar to French law in that it accepts that all things, whether tangible or intangible, movable or immovable, can be the object of ‘perpetual’ rights (ownership, in EU law) as long as they represent some economic value.62 EU law has thus bypassed the international debate on whether or not intangibles can be owned. Secondly, if the nature of the thing had such an immediate impact on the nature of the right in the thing, it would lead to the conclusion that there could never be a perpetual or eternal right, since nothing exists in perpetuity. Objects perish all the time: as you are reading this article, you may be holding a sandwich that may not make it until the end of the article, but that does not mean that you do not, at present, consider yourself the owner of your sandwich. Even land has a limited life, to which the residents near the cliffs of Dover or the coast of Norfolk can surely attest. Nevertheless, someone holding a fee simple absolute in possession in a plot of land in these areas would be considered to be holding a perpetual right in land. To return to the original example of emission rights: it is perfectly possible for someone owning an emission right to think of themselves as holding a perpetual right to an intangible thing which has a limited life. The lifespan of the right is a separate issue from the lifespan of the object. Often, the right does not last as long as the object. With emission rights, the opposite happens to be true. C. Restrictive Covenants As a result of historical developments, English law consists of two subsystems: common law and equity.63 A consequence of this division is the existence of legal as well as of equitable property rights.64 This division into subsystems does not prevent the application of the System-Cube. The depth of the Cube represents the range of property rights. The content of the right determines just how deep that dimension is. There is no reason why this range of property rights cannot contain both the legal and the equitable rights. Whether a person holds a property right at law or in equity does not change the content of the right as such, although it may mean that different operating rules apply to the property right.65 Rules on third party effects, for instance, may apply 61 See below, section 5. Ramaekers (n 4) ch 4, ss 4.2, 5.7 and 5.8. PS Davies and G Virgo, Equity & Trusts—Text, Cases and Materials (OUP 2013) 3–23; Lawson and Rudden (n 44) 10–11. 64 M Dixon, Modern Land Law (9th edn, Routledge 2014) 10; Akkermans (n 41) 336; A Clarke and P Kohler, Property Law—Commentary and Materials (CUP 2005) 403 et seq. 65 Dixon (n 64) 10–26. 62 63 AUTUMN 2017 What is Property Law? 605 differently depending on whether a person holds a property right at law or in equity. Equitable property rights cannot generally be invoked against a bona fide purchaser for value without notice, whereas legal property rights usually can, although certain registration requirements may have to be met. However, a change in the operating rules does not change the parameters of the SystemCube. English property rights, regardless of whether they are legal or equitable property rights, can therefore be visualised through the System-Cube like any other property right. There is one exception, however, and that is restrictive covenants.66 These only exist in equity.67 A restrictive covenant is an agreement between parties that restricts the holder of an estate in land in his use of the land. 68 The most important aspect for present purposes is that restrictive covenants must be negative in the sense that they can only entail an obligation for the holder of the servient tenement not to use his property in a certain way.69 It cannot contain a positive obligation for the holder of the servient tenement to do something with or on the property, 70 nor can it contain a right for the holder of the dominant tenement to do something with or on the servient tenement. This makes it somewhat difficult to visualise a restrictive covenant through the System-Cube, because it has no content for the ‘active side’, ie the right holder of the dominant tenement, in the sense that the latter can do something with or on the servient tenement. Restrictive covenants do not grant a right to the freeholder of the dominant tenement to use or take something from the servient tenement and therefore have a ‘negative’ content for the freeholder of the dominant tenement. They do, however, make an addition to the freehold of the dominant tenement.71 For instance, if a restrictive covenant is created to prevent the owner of the servient tenement from developing the land, then that essentially adds the development value of the servient tenement to the dominant tenement.72 Therefore, while the System-Cube cannot visualise the content of a restrictive covenant as such—since it has only a negative content—it can visualise the fact that a restrictive covenant forms an addition to the freehold of the dominant tenement. The result would be as in Figure 4. The minor cube in the front, marked with horizontal stripes, represents the dominant tenement, which is an immovable object. The two minor cubes behind it marked with an ? represent the freehold of the dominant tenement. 66 This section pertains only to freehold covenants, not to leasehold covenants. Law of Property Act 1925, s 1; Dixon (n 64) 340. Tulk v Moxhay (1848) 2 Ph 774. 69 Rhone v Stephens [1994] UKHL 3. See also McFarlane, Hopkins and Nield (n 53) 928–32. 70 Unless it is made as part of a lease: Akkermans (n 41) 364. 71 cf McFarlane, Hopkins and Nield (n 53) 923 and 926. 72 Lawson and Rudden (n 44) 156–7. 67 68 606 Oxford Journal of Legal Studies VOL. 37 Figure 4. A Restrictive Covenant on Land Neither the object nor the freehold is limited in time, which is why no time cubes have been removed. The column of minor cubes at the back represents the restrictive covenant that is attached to the freehold of the dominant tenement. It is also unlimited in time. D. A Few Words on Limitations Property rights are subject to a variety of limitations. Some of these are internal to the operating system, in the sense that the operating system itself limits rather than facilitates the use of property rights. Rules on third party effects can limit the use of property rights in that they prohibit their exigibility against certain parties in certain circumstances. Other limitations are external to the operating system in that they flow from another area of law, are self-imposed, or are factual or physical. One example of a limitation flowing from another area of law would be environmental law restricting the use of land for certain purposes. Leasehold covenants agreed upon between landlord and tenant could constitute self-imposed limitations, limiting the landlord in her use of her fee simple estate and/or limiting the tenant in her use of her lease. Factual or physical limitations could arise, for instance, from the nature of an object itself. An owner of emission trading rights is not allowed, under Dutch law, to pledge them.73 This is a result of the nature of emission rights: once they are used 73 At art16.42(3), the Dutch law implementing the Directive states: ‘In derogation from article 228 of book 3 of the Civil Code a right of pledge cannot be created on an emission right’ [translation ER]. AUTUMN 2017 What is Property Law? 607 they dissipate and can no longer be used as collateral for a security right. All these limitations, both those that are internal to the operating system and those that are external to it, are to be separated from limitations that are inherent to the property right itself. For instance, the holder of a right of pledge or a charge is allowed to seize the pledged or charged object and sell it, but she is not allowed to use it for herself. This is because a pledge or charge is inherently limited to these powers—it is in the nature of a pledge or charge that it only conveys the powers of possession and sale. Similarly with a right of way: it grants the holder the right to cross over another person’s land, but it does not include the right to plant a tree on that person’s land, or to walk into that person’s home and watch television on their sofa. 4. The Border between Property Law and Adjacent Areas of Law Having set out what property law is and how it might be represented visually, the next question to be addressed is how to define the border between property law and adjacent areas of law. As indicated previously,74 the rules currently included in the operating system are the bare minimum necessary to allow property rights to function. Without rules on acquisition, we would be unable to create or transfer property rights; without rules on extinction or destruction, we might be stuck with property rights which no longer serve any useful purpose; and without rules on third party effects, the whole point of property rights—that we can rely on them erga omne—would be negated. These operating rules are therefore without a doubt part of property law. Then there are various areas of law, the rules of which are undoubtedly not part of property law, such as criminal law or immigration law. However, in between the heart of property law and these clearly non-property law rules lies a large grey area of rules that could be, but do not necessarily have to be, part of property law. These rules are found in areas of law that are closely adjacent to property law but are nevertheless considered to be separate. These are primarily contract law, tort law, certain areas of public law—particularly environmental law and zoning law—constitutional law, insolvency law and succession law. Each of these areas of law has a specific relationship to property law: (a) contract law is the generator or enabler of property law—the majority of proprietary relationships are founded on a contractual agreement: for instance, a usufruct, easement or charge will exist because parties have decided to create one, and every time a sale of goods takes place (which is likely to be billions of times a day) ownership passes from one person to the next;75 74 Section 2. This is, of course, not to say that proprietary relationships cannot arise outside the realm of contracts, such as through necessity, adverse possession, marriage or succession, but those will be in the minority. 75 608 Oxford Journal of Legal Studies VOL. 37 (b) tort law is the enforcer of property law, for instance through the tort of trespass; this is not to say that property law is without enforcement mechanisms of its own—we only need to point out the reivindicatio—but tort law adds to property law’s arsenal for enforcement of property rights;76 (c) insolvency law is the mediator of property law—it attempts to achieve a balance between various property (and contractual) rights in case the party against whom these rights are claimed has gone insolvent and possesses insufficient property to satisfy all claims; (d) succession law is a facilitator of property law—it provides a mechanism through which property can be transferred either automatically or in accordance with someone’s last will in the very specific case of distribution of property upon death; (e) public law (environmental law, zoning law . . .) often acts as a limiter or constrainer—it places limits on what people may do with their property rights in order to protect other interests than merely those of the right holder, such as clean air or soil, or the even distribution of businesses and private homes within a given area; (f) constitutional law functions on the one hand as a protector of property rights, but it also shapes property rights. It protects property rights through provisions such as article 1 of Protocol 1 to the European Convention on Human Rights and through various national constitutions.77 It shapes property rights through, for instance, article 17 of the Charter of Fundamental Rights of the European Union78 which defines the right to property as ‘the right to own, use, dispose of and bequeath his or her lawfully acquired possessions’.79 These relationships between property law and adjacent areas of law can be depicted as in Figure 5. This image is property-law-centric for the purposes of this article, but it would of course be possible to centre a different area of law and draw a similar image depicting its interactions with other areas of law.80 76 It might be said that criminal law can also act as an enforcer of property law, but that would not be entirely correct since a criminal procedure could only lead to a fine or a prison sentence. It would not deal with the return, replacement or repair of any property stolen and/or damaged. 77 Eg art 14 of the German Constitution, s 25 of the South African Constitution, the Takings Clause of the Fifth Amendment of the US Constitution. 78 [2000] OJ C364/01. 79 cf national definitions of ownership: art 544 of the French civil code: ‘La propriété est le droit de jouir et disposer des choses de la manière la plus absolue, pourvu qu’on n’en fasse pas un usage prohibé par les lois ou par les règlements’ (‘Ownership is the right to enjoy and dispose of objects [choses] in the most absolute manner, provided they are not used in a way prohibited by statutes or regulations’); §903 of the German civil code: ‘Der Eigentümer einer Sache kann, soweit nicht das Gesetz oder Rechte Dritter entgegenstehen, mit der Sache nach Belieben verfahren und andere von jeder Einriwking ausschließen’ (‘The owner of an object can, when this is not contrary to the law or the rights of third parties, do with the object what he wishes and exclude others from exercising influence’). Both translations from Kornet and Hardt (n 38). 80 If one were to do so, then of course the role of those areas of law would be more than that of, say, mediator or facilitator, but in the present context they have been given those descriptions from a property-law-centric point of view. AUTUMN 2017 What is Property Law? 609 Figure 5. Property Law and Adjacent Areas of Law Now that we have seen how property law interacts with adjacent areas of law, we can consider the question of how to draw the line between property law and other areas. Of particular contention has always been the separation between property law and contract law. It is often said that, for instance, German property law is ‘narrower’ than French property law because German property law only applies to physical tangible objects,81 whereas French property law also applies to intangibles.82 It is said that, in German law, intangibles fall solely within the realm of contract law. It is then concluded that German law and French law draw the border between property law and contract law 81 See n 38. French civil code, art 516: ‘Tous les biens sont meubles ou immeubles’ (‘All things are movable or immovable’); art 526: ‘Sont immeubles, par l’objet auquel ils s’appliquent: L’usufruit des choses immobilières; Les servitudes ou services fonciers; Les actions qui tendent à revendiquer un immeuble’ (‘Immovable are, through the object to which they apply: the right of usufruct of immovable objects; servitudes or easements; actions to revindicate an immovable’), translations from Kornet and Hardt (n 38); art 529: ‘Sont meubles par la détermination de la loi les obligations et actions qui ont pour objet des sommes exigibles ou des effets mobiliers, les actions ou intérêts dans les compagnies de finance, de commerce ou d’industrie, encore que des immeubles dépendant de ces entreprises appartiennent aux compagnies. Ces actions ou intérêts sont réputés meubles à l’égard de chaque associé seulement, tant que dure la société. Sont aussi meubles par la détermination de la loi les rentes perpétuelles ou viagères, soit sur l’Etat, soit sur des particuliers’ (‘Obligations and actions having as their object sums due or movable effects, shares, or interests in financial, commercial, or industrial concerns, even where immovables depending on these enterprises belong to the concerns, are movables by operation of law. Those shares or interests shall be deemed movables with regard to each shareholder only, as long as the concern lasts. Perpetual or life annuities, either from the State or private individuals, are also movables by operation of law’), translation from <http://legifrance.gouv.fr/Traductions/en-English/Legifrance-translations>. 82 610 Oxford Journal of Legal Studies VOL. 37 differently.83 This conclusion is, however, questionable, and not just because there is an internal inconsistency in German law in that ownership of intangibles is rejected, though it is possible to hold other property rights, such as a right of pledge, in an intangible.84 If the abstract description of these two areas of law is that property law is the ‘law of things’ and contract law is the ‘law of persons’, meaning that property law governs person–thing relationships and contract law governs person–person relationships, then allocation of a specific rule to either the realm of property law or the realm of contract law depends on whether that rule regulates a person–thing relationship or a person–person relationship. Tinkering with the term ‘things’ so as to include or exclude intangibles does not mean that person–thing rules are suddenly no longer person–thing rules but have become person–person rules; all it means is that the scope of application of the person–thing rules is perhaps more limited in legal systems that exclude intangibles from the definition of things than it is in legal systems that include intangibles in the definition of things. A rule stating how an easement can be extinguished is still a rule of property law (or a person–thing rule), even though it is limited to a certain category of property or ‘thing’, namely land, and does not apply to cars or shares. In other words, the only difference caused by the (partial) removal of intangibles from the realm of property law is that, to refer back to the System-Cube model, there is one type of object fewer in relation to which (some) property rights can be held. This does not, however, make the property rights or the operating rules within the system as such any less proprietary. 5. What is EU Property Law? Having discussed the broader question of what property law is, I will now focus on the more specific question of what EU property law is. The following sections will discuss how the nature of EU law affects its definition of property law and how it draws the line between property and contract law. They will also explain how EU (property) law impacts our national conceptions of property law. We will see that EU property law is not only generated very differently from national property law, but also that its fragmented state can cause difficulties for the more systematised national property laws. A. Competing Conceptions of Property Law The premise of the question ‘What is property law?’ is that there is an area of law called property law or that such an area of law can be distinguished from 83 JHM van Erp, ‘DCFR and Property Law: The Need for Consistency and Coherence’ in R Schulze (ed), Common Frame of Reference and Existing EC Contract Law (2nd rev edn, Sellier. European Law Publishers 2009) 262–3. 84 The same inconsistency is present in Dutch law: van Erp and Akkermans (n 11) 382. AUTUMN 2017 What is Property Law? 611 other areas of law.85 If one accepts this premise, it is entirely appropriate to ask the question of what property law is. Within our own domestic systems of law we are very much used to categorising the law along the lines of public and private law, with further subdivisions such as constitutional and administrative law, and property, tort and contract law. At the same time, a comparison of national private law systems shows that these categories are not set in stone: English law distinguishes between land law, trusts and personal property, whereas civil law systems would generally treat all of these under the single heading of property law. The Dutch civil code, although it contains separate books on property law (goederenrecht) and the law of obligations (verbintenissenrecht), also contains a book on ‘patrimonial law’ (vermogensrecht), which acts as an overarching structure for the books on property and obligations. Hence, all property law is patrimonial law, but not all patrimonial law is property law. Similarly the German civil code: Book 1 is called General Part (Allgemeiner Teil) and provides an overarching structure. It is followed by Book 2 on the Law of Obligation Relationships (Recht der Schuldverhältnisse) and Book 3 on Property Law (Sachenrecht). Still, despite these variations in the traditional categories of private law, they are still recognisable as property law, contract law, etc. Not so with EU law. EU law is unique in the sense that it does not follow these national categories of law. It is competence-driven, meaning that it regulates certain topics, such as competition, agriculture or free movement. The only legal basis to be found in the Treaties that explicitly refers to a category of law that we would recognise from the perspective of national law is article 81(2)(c) of the Treaty on the Functioning of the European Union (TFEU), which gives the European legislature the competence to regulate matters concerning conflict of laws. There are no legal bases for property law, contract law, tort law, etc. There would also be no point in defining the EU’s legal bases in this way, because each Member State has a different conception of what these areas of law entail. The consequence of this competence-driven legislation is that it produces rules which some national lawyers might call property law, whereas others might call them contract law, insolvency law or environmental law. Therefore, while the question ‘What is property law?’ may be a valid one in a domestic context, it is in a way irrelevant in the European context. The fact that national conceptions of property law vary does not really pose a problem for EU law given that it is generally not concerned with such categorisation. Conversely, the nature of EU law may cause problems for national conceptions of property law. EU law takes supremacy over national law in case the two conflict.86 What, then, would happen to the national conceptions of property law if there 85 86 See the introduction. Case 6/64 Costa v ENEL ECLI:EU:C:1964:66. 612 Oxford Journal of Legal Studies VOL. 37 were an EU conception of property law? The answer to this question depends on how a European-autonomous definition of property law (and of property concepts such as ownership, transfer, immovable) were to be formed. It might be formed completely independently of the national conceptions, in which case there might be more of a discrepancy between the European and national definitions. However, the CJEU often draws inspiration from a comparison of the national legal systems in order to form a European definition.87 Where this is the case, there may be more overlap with national definitions and therefore fewer problems. It must be pointed out, though, that the CJEU will not necessarily adopt the highest common denominator amongst the legal systems of the Member States. If a definition is found among a minority of Member States that fits better within the overall framework of EU law, the CJEU might adopt that one.88 After all, the EU’s raison d’être is different from that of a state and it will adopt concepts in line with its aims. The extent of the impact of EU law on national property law is therefore not necessarily different for civil law systems than for common law systems, even though common law systems are in the minority within the EU. B. Drawing the Line between EU Property Law and Other Areas of EU Private Law Occasionally, the European legislature has tried to press its laws into the moulds of national categories of law, but with dubious consequences. It has been very active in the development of European contract law, particularly contracts for the sale of goods and consumer contracts. Two measures that have resulted from this process should be mentioned: the Consumer Credit Directive89 and the Consumer Rights Directive.90 It was decided for each that they should only regulate contractual aspects and not proprietary aspects.91 For the Consumer Credit Directive, this means that any aspects of a credit agreement for residential property that are governed by property law and land registration are not covered by the directive and remain to be regulated by national law.92 For the Consumer Rights Directive, this means that it has chosen for the passing of risk to occur upon delivery of the goods and not upon the time of conclusion of the contract,93 which seems to be in line with a traditional system of transfer rather than a consensual one and may cause difficulties for those national legal systems that follow a consensual system and 87 Ramaekers (n 4) ch 1, s 2.1.1. Ramaekers (n 4) ch 1, s 2.1.1. Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property [2014] OJ L60/34. 90 Directive 2011/83/EU on consumer rights [2011] OJ L304/64. 91 Preamble to Directive 2014/17/EU on consumer credit agreements, Recital 9; Preamble to Directive 2011/ 83/EU on consumer rights, Recital 51. 92 Preamble to Directive 2014/17/EU, Recital 9. 93 Directive 2011/83/EU on consumer rights, art 20. 88 89 AUTUMN 2017 What is Property Law? 613 do not make this distinction between delivery and transfer.94 At the same time, and seemingly contradictorily, the Consumer Rights Directive also purports to leave the determination of the conditions for the transfer of the ownership of the goods subject to national law.95 Both these measures seem to be unsuccessful attempts to fit European law into national categories of law. As with all other European legislation—to the extent that it requires implementing measures by the Member States—the Member States will decide themselves whether the European measure is incorporated into what they consider to be property law or contract law. There therefore does not seem to be much point in European law trying to label itself along the lines of national categories, other than trying to make it look more recognisable to national lawyers, perhaps. C. Changes to National Property Law Even when European law is not trying to market itself as, for example, contract or property law, it can nevertheless cause the boundaries between various areas of law to fade and it may change the nature of what we think property law (or any other area of law) is. The application of internal market law may mean that certain rules of property law will have to be altered or will no longer be allowed to exist whenever they directly or indirectly, actually or potentially hinder free movement within the internal market.96 Directives may be implemented in such a way that their various elements are dispersed throughout different parts of national civil codes, making them ever more interconnected on the one hand, but also blurring the lines between the various parts of the civil codes on the other hand. If we were to express this impact that EU (property) law has on national property law through the System-Cube model presented in section 2 of this article, we would see that almost all aspects of property law are touched upon in some way. To start with, EU law maintains its own, European-autonomous definition of ‘rights in rem’. It held in Lieber v Göbel that ‘[t]he difference between a right in rem and a right in personam is that the former, existing in an item of property, has effect against the whole world, whereas the latter can only be claimed against the debtor’.97 Furthermore, it has developed its own classification of objects.98 It distinguishes between immovable, movable and intangible 94 LPW van Vliet, Transfer of Movables in German, French, English and Dutch Law (Ars Aequi Libri 2000) 23. Preamble to Directive 2011/83/EU on consumer rights, Recital 51. Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837, [5]; B Akkermans and E Ramaekers, ‘Free Movement of Goods and Property Law’ (2013) 19 European Law Journal 237, 240–8. 97 Case C-292/93 Norbert Lieber v Willi S Göbel and Siegrid Göbel [1994] ECR I-2535, [14]. This definition was repeated in Case C-115/88 Reichert [1990] ECR I-27, [11] and in Case C-294/92 Webb v Webb [1994] ECR I-1733, [15]. 98 On CJEU case law concerning the classification of objects, see E Ramaekers, ‘Classification of Objects by the European Court of Justice’ (2014) 39(4) European Law Review 447. 95 96 614 Oxford Journal of Legal Studies VOL. 37 property,99 and accepts that all three are capable of forming the subject of property rights. It has even introduced a number of intangible objects that can be the subject of ‘rights in rem’ itself, such as the Community Trade Mark,100 the Community Design101 and the Greenhouse Gas Emission Allowance.102 It has also dealt elaborately with the question of what an immovable is in the context of the VAT Directive103 in cases on, amongst others, caravans and mobile homes,104 prefabricated buildings105 and houseboats.106 EU law’s influence on what I have called the operating system of property law has been less extensive. It does not really provide any rules on how property rights might be created or transferred, although it does recognise that a power to dispose is a prerequisite for the creation and transfer of property rights.107 The Regulation on the Community Trade Mark provides one—and to my knowledge the only—example where registration plays a crucial role, in that a Community Trade Mark cannot be invoked against third parties unless it has been registered.108 Rules concerning third party effects of property rights feature a bit more prominently. The Community Trade Mark Regulation establishes a ranking.109 The Insolvency Regulation grants property effect to retention of title clauses—they can be invoked against third parties.110 The Directive on the return of stolen cultural objects restricts the scope of national third party protection rules.111 Under this directive stolen cultural objects can be retrieved from parties who acquired them in good faith where otherwise those parties would be protected exactly because they were in good faith. Finally, several CJEU judgments on mortgage enforcement procedures have altered the balance between debtor and creditor, weakening the powers of the mortgagee.112 According to the Court, national courts must be able to provide interim measures that will suspend mortgage enforcement proceedings while the (un)fairness of clauses in the mortgage loan agreement is assessed, thereby allowing the debtor to retain ownership of the property in the meantime. Enabling national courts to assess the fairness of terms in the loan agreement in turn allows them to strike out these terms if they find them to be in violation 99 See eg art 3 of Directive 2005/60/EC on the prevention of terrorist financing [2005] OJ L309/15: ‘(3) ‘‘property’’ means assets of every kind, whether corporeal or incorporeal, movable or immovable, tangible or intangible, and legal documents or instruments in any form including electronic or digital, evidencing title to or an interest in such assets’. 100 Regulation 207/2009/EC on the Community Trade Mark (codified version) [2009] OJ L78/1, art 19. 101 Regulation 6/2002/EC on Community Designs [2002] OJ L3/1, art 29. 102 Directive 2003/87/EC Establishing a Scheme for Greenhouse Gas Emission [2003] OJ L275/32, art 3. 103 Directive 2006/112/EC on Value Added Tax [2006] OJ L347/1. 104 Case C-60/96 Commission v France [1997] ECR I-3827. 105 Case C-315/00 Maierhofer [2003] ECR I-586. 106 Case C-532/11 Leichenich v Peffekoven [2012] ECR I-720. 107 Case C-117/06 Möllendorf [2007] ECR I-8361; Ramaekers (n 4) 159–60. 108 Regulation 207/2009/EC on the Community Trade Mark, arts 17(6) and 23(1). 109 art 29(2). 110 Regulation 1346/2000/EC on insolvency proceedings, art 7(1) and (2). 111 Directive 93/7/EEC on the return of stolen cultural objects, art 5. 112 See Case C-415/11 Mohamed Aziz v Catalunyacaixa EU:C:2013:164; Case C-169/14 Morcillo & Garcı́a EU:C:2014:1388; Case C-34/13 Kušionová EU:C:2014:2189. AUTUMN 2017 What is Property Law? 615 of the directive, thereby altering the relationship between debtor and creditor. Consequently, rights in the property held by the debtor, creditor and possibly third parties such as a tenant are directly affected by the CJEU’s intervention in national mortgage enforcement proceedings. It is unfortunate that there is hardly any sort of operating system to be found in European law. If European-autonomous property rights were to be (further) developed through legislation or case law, they would exist in a vacuum because there would be no rules telling us how to create them, transfer them, etc.113 That vacuum would be filled by the Member States’ own operating systems. This could mean that a European property right created according to the law of one Member State might not be recognised by another Member State that applies a different set of criteria to the creation of property rights. This, in turn, would make the existence of European-autonomous property rights,114 which ought to operate in the same way in all Member States, rather pointless. In light of the above, the European version of the core of the System-Cube, depicting the European system of property rights, looks like Figure 6. The dotted lines indicate the areas that have not yet been filled in or are insufficiently defined by the European acquis to draw any definite conclusions. All in all, the impact of EU law on national property law has so far been modest, although the CJEU’s case law on the VAT Directive has already led to situations in which an object had to be considered immovable for the purposes of EU law, even though it would have been considered movable under national property law.115 The fact that Member States can no longer always determine Figure 6. EU Property Law 113 See section 3. I drafted a proposal for the creation of European-autonomous property rights previously: Ramaekers (n 4) ch 6, s 5. 115 Ramaekers (n 98) 464. 114 616 Oxford Journal of Legal Studies VOL. 37 whether an object is movable or immovable solely on the basis of their own national law if a given situation falls within the scope of EU law seems remarkable. 6. Conclusion So what, in the end, is property law? And what is European property law? EU law itself does not present us with an answer to that question that would be similar to the definitions of property law described in section 1. EU property law is currently not a mature, coherent system, nor is it based on any clear policy.116 It is therefore too soon to be able to discuss its theoretical underpinnings in the same way as we can with national systems of property law. As the System-Cube showed, there are still quite a few holes to fill in. The only part of EU property law that is quite well established is that concerning the definition of ‘things’. European legislation adopts a wide definition of things (objects, assets, etc) in which one can have property rights. As we saw earlier,117 immovable, movable and intangible objects are all included, the determining factor being that they need to have some economic value. What is less clear and needs more research is the extent to which EU law has adopted its own definitions of individual property rights, eg ownership or lease. A European-autonomous operating system is still mostly lacking. Furthermore, the competence-driven nature of EU law makes attempts to draw the line between EU property law and other areas of EU private law rather futile, since categories such as property law, contract law and tort law are national categories that are not generally employed in EU law.118 To return, then, to the primary question of this article, property law is a system consisting of a core of property rights surrounded by a framework of rules—the operating system—that regulate the acquisition, registration, destruction and third party effects of those property rights. These rules are essential to a system of property law; without them, property rights would exist in a vacuum in that it would not be possible to use them in any way. The operating rules are to property rights what the operating system on your tablet is to your apps. Beyond these four categories of operating rules there is a grey area of rules that could be, but do not necessarily have to be, part of property law, such as contract law, succession or insolvency law. It is within this grey area that we see the differences between national systems of property law emerge, with some systems, for example, relegating intangibles to the realm of contract law whereas others include them within property law. 116 For a more detailed description of the current state of EU property law, see E Ramaekers, ‘The Development of EU Property Law’ (2015) 23(3) European Review of Private Law 433. 117 See above section 3.B. 118 And as we have seen, when the European legislature does try to press EU law into these categories the results can be dubious—see above, section 4.B. AUTUMN 2017 What is Property Law? 617 Within this grey area we also find rules that limit property law pur sang: environmental law and zoning law, for instance, may limit us in our use of our property. In addition, limitations are inherent to the system of property law itself. Sometimes they flow from the operating system, eg where a property right is only exigible between parties to a transfer but not against a third party without registration. Limitations are often also part of a property right itself. A usufruct, for instance, gives its holder the right to use and enjoy the property, but not to transfer ownership of the property to a third party. The System-Cube model of property law presented in this article was originally developed in order to research the existence and content of EU property law. It is therefore primarily based on comparative research into European legal systems. Future research will investigate to what extent it can be applied to non-European systems of property law and to property ‘entitlements’119 that have developed outside the realm of private law.120 119 As opposed to the traditional property rights a private lawyer would expect to find within the numerus clausus. 120 eg rights to land or to intangibles such as pensions, which have been developed in constitutional and human rights law. Copyright of Oxford Journal of Legal Studies is the property of Oxford University Press / USA and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.