What is property? - sidenote: businesses are an exchange of property
Legal right to exclude (meaning your property has a legal fence) others from resources that are originally possessed or are acquired without force, theft, fraud (legally).
What is known as a legal fence?
The legal right to exclude others from property.
Is property absolute and infinite?
Absolute but NOT infinite (you can’t produce or make drugs/ make or do illegal things even within your home).
Can property boundaries be ambiguous?
Yes (think about fences and property lines).
What is the foundation of the free (private) market?
Property — people have protections in place that incentivize purchase and investment in resources.
Case example: Does taking and selling a home to satisfy a debt to the government and keeping the surplus value as a windfall violate the 5th amendment taking clause?
The government said it counts as a taking but you have to return net proceeds from the sale back to the owner.
What frameworks handle the problem of limited resources?
State makes major decisions (Communist countries) and Private Property System; most societies have mixed frameworks.
What can the state do under a state-controlled framework?
State can direct people in how, when, where and assumes rights over people’s resources, efforts, and talents.
What does the Private Property System do?
State recognizes and enforces an individual’s rights to acquire, possess, use, and transfer scarce resources; people determine distribution.
If the goal is to increase the amount of limited resources, which framework is better?
Private Property System.
What is real property?
Land and interest in land (includes buildings).
What is personal property?
All moveable resources, divided into tangible and intangible.
What is tangible property?
Physically touch it.
What is intangible property?
Nonphysical stuff (intellectual property).
What does land ownership consist of beyond the surface?
More than surface or the property — includes air rights and subsurface rights.
What are air rights?
Owner of real property possesses the air above the land to a certain extent TO THE EXTENT THAT YOU STILL/CAN OCCUPY AND USE.
Can air rights be sold to another for development?
Yes. Think of NYC — you may purchase air rights to build up or prevent obstruction of view.
What are subsurface rights?
Landowner owns the liquids, gases, rocks, and minerals beneath the land and can sell them separately.
What is the Rule of Capture?
If it naturally flows from your place to theirs, the other person if able to keep and sell it; does NOT apply if machinery used touches the other person’s property or causes physical intrusion.
Case Example Briggs v. Southwestern Energy Production Co.: can you use machinery to pull over gas from one property to another?
Yes, the rule of capture allows extraction of natural gas from an adjacent property using hydraulic fracturing BECAUSE THERE IS NO PHYSICAL INTRUSION.
What is a fixture?
Personal property that has converted into real property by attaching the object to the real property; becomes one with the real property.
What happens to fixtures when the real property is sold?
The fixture has to stay with the house.
What is a Fee Simple estate?
Maximum estate allowed under law (includes fee simple absolute and fee simple defeasible).
What is Fee Simple Absolute?
Example wording: ‘To Juanita’ (no conditions).