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Monday, February 17, 2014

Pomeroy on Why Property Is So Hard

Pomeroy_CChad Pomeroy (St. Mary's) has posted Why Is Property So Hard? (Rutgers Law Review) on SSRN.  Here's the abstract:

This paper seeks to flesh out the heterogeneity and inherent difficulty of property law and to analyze it in depth. Part I begins this examination by setting up a taxonomy for property law and then describing the heterogeneity inherent in that context and the costs associated with that variability. Real estate law has continually evolved throughout American history — changing from a small, local business to a large, national one, spanning jurisdictional lines and limits — and it is the haphazard and varied nature of this evolution that has created this difficulty and cost. This is notable when contrasted with the homogeneity and relative stability of other areas of the law. And it is particularly notable when contrasted with one particular area of property law itself: when it comes to property form, property law is remarkably stable and predictable, and a closer examination of this exception to property’s broader heterogeneity leads to an enlightening analysis of the underlying reasons for the larger heterogeneity that is the focus of this article.

Part II undertakes just that sort of examination, examining property form in terms of the numerus clausus. This theory, which means “closed number,” was first discussed by European scholars and has more recently been propounded by Thomas Merrill and Henry Smith to describe and explain the fact that the wider variability of property law does not extend to common law restrictions on property types. In particular, they argue that the numerus clausus drives the standardization of property types by implementing an informational cost-benefit analysis that focuses on whether a new property type would provide helpful information to interested parties, the unique benefit of which exceeds the marginal informational costs thereof.

Part III applies an informational burdens analysis to property law generally by demonstrating its application to vesting, co-ownership, and third party property rights heterogeneity. Part IV then builds upon this construction to explain why this has not yet occurred in our system by focusing on the significant roll-back costs that would result from attempting to change established real property practices and laws. Any such attempt would upset settled expectation based upon prior precedent and hundreds of years of recorded documents, creating much higher costs than those usually associated with legal innovation.

The Article concludes that our property system is dangerously inefficient and costly and that the numerus clausus analysis provides a potentially adequate vehicle for addressing this problem, while acknowledging the very real costs associated with any such attempt.

http://lawprofessors.typepad.com/property/2014/02/pomeroy-on-why-property-is-so-hard.html

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