PropertyProf Blog

The Man Who Sold the Moon

The New York Times profiles Dennis Hope, who has "built a thriving business by “selling” land plots in space, on places like the moon, Mars and Venus. Of course, he has no legal authority to do so. How does he get away with this? He told me that, back when he was a ventriloquist in the days before he “owned” the moon, his dummy taught him a valuable lesson: you can say anything you want to anybody as long as you smile."

Steve Clowney

Lehavi on The Corporation as a Nexus of Property

Amnon Lehavi (Radzyner School of Law - Israel) has posted The Corporation as a Nexus of Property on SSRN.  Here's the abstract:

The study of property is thriving. Having been long dominated by a disintegrative approach building on the bundle of rights concept, property scholarship is reintroducing essentialist models, with the right to exclude featuring prominently as property’s core.

While the new essentialism school studies various resources, from land to intellectual property, largely missing from its accounts is the most prominent source of wealth: the business corporation. Whereas corporate law theory is increasingly looking beyond the “nexus of contracts” model to illuminate the firm’s proprietary foundations, property theory has yet to fit the business corporation into its newly integrative framework.

The Article argues that this deficiency is not merely a coincidence. In many ways, the business corporation undermines the paradigms of current property theory. To start with, the underlying notion of divorce of ownership from control in the business corporation seems antagonistic to the owner’s right to exclude in property. In addition, while property theory recognizes the need to pool together resources and overcome collective action problems, conventional models of property governance, such as residential community associations, seem alienated from the power relations and vertical authority within the business firm. Specifically, the setting of a majority shareholder enjoying a control premium alongside owing fiduciary duties to dispersed minority shareholders is allegedly at odds with the horizontal governance assumption in contemporary property paradigms.

This dissonance does not release, however, property theory from accounting for the core features of the business corporation. Moreover, the Article argues that once we move from a model of substantive essentialism to one that identifies the institutional and structural traits of property, then the corporation becomes a much better fit for property theory. This shift sets the ground for reconceptualizing the firm as a “nexus of property.”

Steve Clowney

The Poetry of Mapping Your Whole Life

Dennis Wood is a geographer who has mapped nearly every aspect of his neighborhood in Raleigh, North Carolina: street signs, sewer lines, the mailman's route, power lines, fallen autumn leaves.  Examined  together, the maps create strange multi-layered story about the place Wood calls home. For example, the picture above is Wood's map of all the jack-o-lanterns in his neighborhood.  Wood goes on to explain that:

the pumpkins are more then what appears to just be an aesthetic look at his neighborhood, but more a socio-economic study.   with these pumpkins, he did a study comparing the people who were more active in the neighborhood association and those who were not.  the pumpkins can be seen as signifiers of those who were more respected in the community as the people who are more renown had more pumpkins on their porch then their neighbors who were not involved, and also happened to live in the less wealthy portions of the neighborhood.

You can see a slideshow of Wood's maps here.  Wood's book is available here.

Steve Clowney

Fennell on Crowdsourcing Land Use

Lee Fennell (Chicago) has posted Crowdsourcing Land Use (Brooklyn Law Review) on SSRN.  Here's the abstract:

Land use conflicts arise from information shortfalls, and avoiding them requires obtaining and using information. Yet traditional forms of land use control operate in relative ignorance about landowner intentions, about preferences for patterns of land use that do not presently exist, and, more fundamentally, about land use impacts as they are experienced on the ground. Because information is expensive to gather and use, this ignorance may be rational. New technological and theoretical advances, however, offer powerful ways to harness and deploy information that lies dispersed in the hands of the public. In this symposium essay, I assess the prospects for an increased role for crowdsourcing in managing land use, as well as the limits on this approach. Governments must do more than elicit, aggregate, coordinate, and channel the preferences, intentions, and experiences of current and potential land users; they must also set normative side constraints, manage agendas, and construct appropriately scaled platforms for compiling and using information.

Steve Clowney

Is Sherlock Holmes in the Public Domain?

Alex Heimbach investigates the issues:

The copyright to works published before 1923 have expired in the U.S. [...]  Sherlock Holmes story elements—including Holmes’ deductive skills, his friendship with Watson, and his frequent disguises—mostly appear in pre-1923 stories and have thus passed into public domain with the earlier stories.  The estate maintains that the character as a whole remains under copyright until all of the stories are in the public domain. As the Estate’s lawyer, Benjamin Allison, told The New York Times last week, “Holmes is a unified literary character that wasn’t completely developed until the author laid down his pen.”

Steve Clowney

Braverman, Blomley, Delaney, & Kedar on Legal Geography

Irus Braverman (Buffalo), Nicholas Blomley (Simon Fraser - Geography), David P. Delaney (Amherst College), & Alexander (Sandy) Kedar (Haifa) have posted The Expanding Spaces of Law: A Timely Legal Geography: An Introduction on SSRN. Here's the abstract:

Legal geography is a stream of scholarship that takes the interconnections between law and spatiality, and especially their reciprocal construction, as core objects of inquiry. Legal geographers contend that in the world of lived social relations and experience, aspects of the social that are analytically identified as either legal or spatial are conjoined and co-constituted. The legal geography scholarship highlights that nearly every aspect of law is either located, takes place, is in motion, or has some spatial frame of reference. In other words, law is always “worlded” in some way. Likewise, every bit of social space, lived places, and landscapes are inscribed with legal significance. Distinctively legal forms of meaning are projected onto every segment of the physical world. These meanings are open to interpretation and may become involved in a range of legal practices. Such fragments of a socially segmented world — the where of law — are not simply the inert sites of law, but are inextricably implicated in how law happens.

This introduction to the forthcoming book The Expanding Spaces of Law: A Timely Legal Geography (Stanford University Press) identifies and elaborates on three modes of legal geographic research. The first mode of legal geography includes disciplinary work in law or in geography that is modeled on the conventional image of import and export. The second is an interdisciplinary pursuit in which scholars in the eponymous fields draw on the work of each other and seek to contribute to the development of a common project. The third mode moves beyond legal geography to trans-disciplinary, or perhaps even post-disciplinary, modes of scholarship. Although these three modes exist concurrently, the general trajectory over time has been from disciplinary to interdisciplinary and, finally, to post-disciplinary orientations. This triadic classification helps organize the rich yet eclectic legal geography scholarship that has evolved over the last thirty years or so. While this introduction contains elements of each mode, it also urges interested scholars to move legal geography beyond the disciplinary boundaries into the horizons of a post-legal geography. Ironically, then, the ultimate success of legal geography will be in its ability to transcend the bi-disciplinary focus that has characterized so much of this scholarship up to this point.

In addition to the introduction, the book consists of ten chapters. In the first three, Keebet and the late Franz von Benda-Beckmann, Mariana Valverde, and Nicholas Blomley identify gaps and obstacles in existing approaches to legal geography scholarship and offer remedies. An important sub-theme in each of these chapters is the importance of being more mindful of the temporalities of social, spatial, and legal phenomena. Authored by Alexandre (Sandy) Kedar and Irus Braverman, the next two chapters ask how a critical comparative legal geography might not only draw upon but also contribute to a rejuvenated project of comparative law and the methodological stakes of legal geography scholarship. The remaining five chapters expand legal geography into new spaces and make new connections. Specifically, Michael Smith, Antonio Azuela and Rodrigo Meneses, Lisa Pruitt, Melinda Benson, and David Delaney develop novel interpretive resources with the aim of enhancing interdisciplinarity, applying these tools to particular kinds of spaces and places: war zones, the street, the workplace, American rurality, and procedural spaces.

 

Steve Clowney

Do Sex Offenders Affect Property Values?

The unsurprising answer is: Yes.  According to Slate, the effect is dramatic:

How much does your property value drop when a registered sex offender lives next door? About 12 percent. According to a study released in 2008, houses located next door to a registered sex offender drop by that much in value. For the average American homeowner, that’s a loss of nearly $21,000, enough money to send a child to private school for two years. [...] The picture gets even bleaker when you consider that sex offenders affect not only the value of adjacent properties, but the value of other homes nearby. On average, homes within a 0.1-mile radius of a registered sex offender drop in value by 4 percent.

Steve Clowney

Inside the World's Most Expensive Apartment Building

Vanity Fair profiles One Hyde Park in London, dubbed the world’s most expensive residential building:

In fact, the emphasis everywhere is on secrecy and security, provided by advanced-technology panic rooms, bulletproof glass, and bowler-hatted guards trained by British Special Forces. Inhabitants’ mail is X-rayed before being delivered.

The secrecy extends to the media, many of whose members, including myself and the London Sunday Times’s and Vanity Fair’s A. A. Gill, have tried but failed to gain entry to the building. “The vibe is junior Arab dictator,” says Peter York, co-author of The Official Sloane Ranger Handbook, the riotous 1982 style guide documenting the shopping and mating rituals of a certain striving class of Brits, who claimed Knightsbridge’s high-end shopping area, which stretches from Harrods to Sloane Square, as their urban heartland.

Steve Clowney

Kochan on Recording Systems for Property

Donald Kochan (Chapman) has posted Certainty of Title: Perspectives after the Mortgage Foreclosure Crisis on the Essential Role of Effective Recording Systems (Arkansas Law Review) on SSRN.  Here's the abstract:

Recording systems for property play a pivotal, market-facilitating role for the players engaged in any transaction, the judiciary that must resolve disputes between the players, and others members of the general public by informing each about the true nature of ownership of the real property things in the world. This symposium article explores the essential character of such systems in providing certainty of title, and takes a tour through the mortgage foreclosure crisis to see where adherence to and respect for these systems’ roles broke down.

Leading up to the crisis, as securitization became vogue and the housing boom blurred priorities, market participants found every way to avoid using the recording systems unless absolutely necessary. The market substitute to traditional recording, MERS, was well-intentioned but poorly operated. The article explores some of the ways that recording failures contributed to, and concurrently were exacerbated by, the crisis.

Most importantly, this article is a defense of the institution of recording and an examination of the utility of certainty of title. Recording creates a network of information supporting a network of transactions. If we understand that one can transfer only as much property as one has, we should equally understand that such a rule is only useful if we have the means to figure out what one has in the first place – in some authoritative and certain way (including knowing that the courts will come to the same conclusion) such that we can adjust our behavior and arrange our interactions with that property around that knowledge. These truths lie at the heart of the importance of certainty of title and at the core of the justification for the existence of market-facilitating registries or recording systems that document property ownership in society.

Steve Clowney

The World's Coolest New Buildings

Architizer Magazine has announced the winners of its "A+ Award" for architectural achievement.  The awards honor 87 buildings in 52 categories. Even if you're not an architecture buff, the images are pretty stunning. 

Steve Clowney

Borden & Reiss on Prosecuting the Financial Crises

Bradley Borden (Brooklyn) & David Reiss (Brooklyn) have posted Cleaning Up the Financial Crisis of 2008: Prosecutorial Discretion or Prosecutorial Abdication? on SSRN.  Here's the abstract:

When finance professionals play fast and loose, big problems result. Indeed, the 2008 Financial Crisis resulted from people in the real estate finance industry ignoring underwriting criteria for mortgages and structural finance products. That malfeasance filled the financial markets with mortgage-backed securities (MBS) that were worth a small fraction of the amount issuers represented to investors. It also loaded borrowers with liabilities that they never had a chance to satisfy.

Despite all the wrongdoing that caused the financial crisis, prosecutors have been slow to bring charges against individuals who originated bad loans, pooled bad mortgages, and sold bad MBS. Unfortunately, the lack of individual prosecutions signals to participants of the financial industry that wrongdoing not only will go unpunished but will likely even be rewarded financially. Without criminal liability, we risk a repeat of the type of conduct that brought us to the edge of financial ruin.

Steve Clowney

The Tragedy of the Commons: Picture Edition

From National Geographic Magazine: 

A forest of derricks rises beyond a Signal Hill, California, neighborhood in this photo from the June 1941 National Geographic. Oil had been discovered there just 20 years earlier. The caption accompanying this photo notes: “If one man drills and strikes oil, his neighbor at once drills, too, lest the first drain the pool.” Today the area’s Long Beach oil field is much depleted, but it still yields more than a million barrels a year. [...] Some of the houses pictured are still standing, but no derricks compete with the palm trees there anymore.

Steve Clowney

(HT: Noha El Maraghi)

Who Owns Your Phone?

Wired's Kyle Wiens argues that copyright is ruining our ability to really own physical things:

Who owns our stuff? The answer used to be obvious. Now, with electronics integrated into just about everything we buy, the answer has changed. We live in a digital age, and even the physical goods we buy are complex. Copyright is impacting more people than ever before because the line between hardware and software, physical and digital has blurred. The issue goes beyond cellphone unlocking, because once we buy an object — any object — we should own it. We should be able to lift the hood, unlock it, modify it, repair it … without asking for permission from the manufacturer.

But we really don’t own our stuff anymore (at least not fully); the manufacturers do. Because modifying modern objects requires access to information: code, service manuals, error codes, and diagnostic tools. Modern cars are part horsepower, part high-powered computer. Microwave ovens are a combination of plastic and microcode. Silicon permeates and powers almost everything we own.

This is a property rights issue, and current copyright law gets it backwards, turning regular people — like students, researchers, and small business owners — into criminals. Fortune 500 telecom manufacturer Avaya, for example, is known for suing service companies, accusing them of violating copyright for simply using a password to log in to their phone systems. That’s right: typing in a password is considered “reproducing copyrighted material.”

Steve Clowney

(HT: Andrew Sullivan)

Brooklyn Law School Starts Real Estate Finance Blog

Here's the meat of the announcement from Brooklyn:

Brooklyn Law School is pleased to announce the launch of REFinBlog.com, a collaborative effort between Professors Brad Borden and David Reiss and Brooklyn Law School students, focused on tracking the latest law and practice developments in the rapidly changing field of real estate finance.
 
REFinblog.com provides timely and indispensable insight, analysis and commentary on the latest news and cases in the real estate finance arena, with an emphasis on securitization. Currently focused on litigation arising from the 2008 financial crisis, REFinblog.com provides information about “upstream” litigation (lawsuits against underwriters, promoters, and other market actors), “downstream” litigation (bankruptcy and foreclosure cases brought by and against homeowners) as well as other timely information about related tax and regulatory actions.

Steve Clowney

Van Erp on the Development Towards a European Property Law

Sjef Van Erp (Maastricht - Netherlands) has posted From Euratom Property Law to European Union Property Law: A Concise Overview of the Development towards a European Property Law on SSRN.  Here's the abstract:

The Euratom Treaty contains its own property law regime regarding fissile materials. This regime can be considered as a first attempt at creating a European (i.e. non-national) property law. In thiis paper a concise overview is given of how such a truly European property law is now gradually developing further.

Steve Clowney

The First Circuit Weighs in on MERS

From Joe Singer's blog:

State courts have disagreed about whether MERS (Mortgage Electronic Registration Systems) has standing to foreclose on property or to assign whatever interest it has in the mortgage to the bank that holds the mortgage currently so that that bank can bring foreclosure proceedings. Some courts have held that MERS has no property interest in the mortgage but is a mere agent for the mortgage owner so it cannot bring foreclosure proceedings itself or assign the mortgage to anyone else. [...] But others have held that MERS may initiate foreclosure proceedings in its own name and/or assign the mortgage to someone else.

In Culhane v. Aurora Loan Servs. of Neb., — F.3d —, 2013 WL 563374 (1st Cir. 2013), the First Circuit, applying Massachusetts law, has now held that MERS may assign mortgages because it does own a legal interest in the mortgage. In an opinion by Judge Selya, the court held that MERS has the “legal interest” in the mortgage because it is named as the mortgagee but that the bank that actually issued the note and has the right to enforce the mortgage to secure the loan has the “beneficial interest” in the mortgage. The court reasoned  that the party that owns the note or is entitled to enforce it (not necessarily the same party) has the equitable right to the protection of the mortgage giving it a right to foreclose and that MERS is merely holding title to the mortgage for the benefit of that party. At the same time, MERS has a sufficient interest to hold the mortgage title for the benefit of the owner of the “beneficial interest” in the mortgage. It is not clear if that would mean that MERS could bring foreclosure proceedings in its own name or that means that the right to foreclose cannot be separated from rights in the note.

Steve Clowney

Poirier on the Cultural Meaning of Homeownership in Brazil and USA

Marc Poirier (Seton Hall) has posted Brazilian Regularization of Title in Light of Moradia, Compared to the United States’ Understandings of Homeownership and Homelessness (Miami Inter-American Law Review) on SSRN.  Here's the abstract:

This Essay considers the cultural resonances of regularization of title (regularização) for homeownership in the favelas of Rio de Janeiro. It compares those resonances to the cultural meaning of homeownership in the United States. Brazil’s approach is informed by an understanding of moradia, a right to dwell someplace, that is a far cry from its typical English translation as a right to housing. Brazil also draws on constitutional provisions and a long Latin American tradition concerning the social function of property, as well as a general theoretical understanding of the right to the city and of cidadania, a certain kind of citizenship. All of these frames construct homeownership as a gateway to interconnection and full participation in the life of the city. This is distinctly different from the individualistic cast of the prevailing understanding of homeownership in the United States, as personal success and the achievement of wealth, status, and a private castle.

The Essay also considers the standard United States construction of homelessness, which again tends to frame the issue in terms of individual responsibility or blame or of the role of institutional structures as they affect individuals, and typically fails to recognize the effect of having no property on relationships and interconnectedness and ultimately citizenship. The Essay advances five reason for the differences between Brazilian and United States understandings of homeownership. These include very different histories concerning the distribution of public lands; the absence in United States property jurisprudence of anything like the notion of a social function of property; the physical invisibility of informal communities in the United States; United States jurisprudence’s rejection of vague, aspirational human rights claims as law; and an insistence in United States jurisprudence on legal monism and an abstract, universalizing account of property ownership that valorizes one-size-fits-all law rather than case-by-case accounts of how land and dwellings are managed by various local communities.

Finally, the Essay observes a recent groundswell of United States scholarship that debunks “A own Blackacre” as an adequate account of the ownership of land and homes, insisting on a more race- and class-informed account as to both the history of homeownership and possible solutions for providing secure dwelling for the poor. The Essay recommends a convergence of studies of informal communities worldwide with a more nuanced, race- and class-informed understanding of homeownership.

Steve Clowney

Why Does Title Insurance Cost So Much?

The New York Times asks if title insurance premiums are too high and whether competition in the title insurance market is too constrained:

Borrowers don’t often pay much attention to the title insurance required by their mortgage lender — until they see the sizable charge for it on their list of closing costs. [...]

Yet for years, a debate has raged as to whether premiums are too high, competition too constrained, and the insurers too closely intertwined with the mortgage and real estate professionals who send business their way. [...] 

Borrowers typically rely on their mortgage broker or real estate agent to select a title agent for them, but Mr. Castellanos says they are better off making the selection themselves. He advises borrowers to ask a real estate lawyer to recommend an independent title company, and to avoid title agencies that have a business affiliation with the real estate agency or lender recommending them.

Steve Clowney

Kochan on the Primacy of Property in Anglo-American Law

Donald Kochan (Chapman) has posted The Property Platform in Anglo-American Law and the Primacy of the Property Concept (Georgia State) on SSRN.  Here's the abstract:

This Article proposes that the property concept, when reduced to its basic principles, is a foundational element and a useful lens for evaluating and understanding the whole of Anglo-American private law even though the discrete disciplines — property, tort, and contract — have their own separate and distinct existence.

In this Article, a broad property concept is not focused just on things or on sticks related to things but instead is defined as relating to all things owned. These things may include one’s self and all the key elements associated with this broader set of things owned — including the right to exclude, ownership, dominion, authority, and the sic utere maxim — normally segregated to our discussions of property law but that should be considered equally necessary to contract and tort law.

In examining these property concepts, this Article goes further to contend that ownership in the self has a vital place in the property discussion. Every legal system must decide the level of protection or recognition of property in the self before it can make any decision on what rules to create in relation to real property, tort or contract. The rules in all three develop on their own but each can be measured from their consistency or deviation from a starting base of absolute property ownership in the self. Once we understand that the platform for each of these areas of law is based in the property concept, so too can we then have a metric for discussion to evaluate deviations from pure property principles that develop in each doctrine (or separate discipline) thereby allowing us to also isolate the most unique characteristics attributable only to a discrete subject like contract or tort. But understanding that the property concept is at the base of all three legal species — property, contract and tort — is nonetheless the necessary starting point for an understanding of any of them.

Steve Clowney

Does the Rule Against Perpituities Apply to City Permits?

The N.Y. Times reports that the owners of Madison Square Garden are asking New York City to renew "in perpetuity" the permit that allows them to operate an sports facility atop Penn Station, the country’s busiest transit hub.

Hopefully someone up there will see that this is a terrible idea.  In addition to the problem that it's impossible to know how conditions in the city will change over the next 10 or 20 or 50 years, approving the request would cement the monstrously ugly Garden on the landscape and permanently consign the millions of commuters who use Penn Station to a cramped and lightless entrance to the city.

Steve Clowney