Property Rights – a brief summary and fact sheet

Property rights are very broad and span across a wide range of property types. This post will deal with the rights relating to personal property.

Personal property

Private property can be categorised into ‘real’ and ‘personal’ property. Real property relates to land, and personal property relates to other types of property other than land.

Whilst there are other sub-categories, the main types of personal property consist of tangible, moveable goods commonly referred to as chattels. It includes things such as your car, your phone or your laptop. The other type of personal property is intangible, intellectual goods called choses in action. These are your debts, shares, and copyrights. Your rights related to a property are directly correlated with the type of property it is.

Bailment

Bailment is the act of transferring possession, but not ownership, of a chattel from the true owner (bailor) to another person (bailee).

The essential elements of bailment are:

  1. the delivery of the exclusive right of possession by the bailor;
  2. the voluntary assumption of possession by the bailee;
  3. an assumption of the responsibility by the bailee to keep the goods safe; and
  4. the obligation to return the thing bailed.

The delivery of possession and not ownership is the defining element. A bailee does not own the chattel being bailed; rather, they are holding it for the true owner. As such, bailment is a common topic in cases of delivery – for example, where the bailor has paid a removalist (the bailee) to help move chattels like a fridge, couch or television to a new house. Your rights: If an item is damaged or not returned, the first avenue of relief is a breach of bailment. You can be compensated for the item or seek an order demanding the return of the item.

Finding a chattel

What happens if, while you’re walking down the street, you find a diamond ring on the ground, with no one else around it? Do you now own it, or do you have a duty to return it?

Finding a chattel is separated into categories. In summary, the finder of a chattel has a superior right to possession to anyone EXCEPT the true owner. If the owner comes forward and proves ownership over the chattel, it must be returned. If the thing that was found was abandoned, the finder can gain possessory title over it.
Another category includes the finder’s rights to possession over the employer’s rights. What if, while doing your job as a cleaner, you find a diamond ring in the bathroom sink? If you found the ring whilst acting in the course of your employment, your employer will have a superior claim to it. However, if the finding was incidental to your employment, for example, if an on-duty police officer finds a diamond ring on the floor, and it is NOT in the course of his employment, he will have superior title.
The final category is finder’s against occupiers. What if you found a diamond ring in a carpark owned by someone else? The occupier will own the ring if it was attached to the grounds it was found on (called a fixture). If it was partially attached, the occupier has a superior claim but this can be refuted. However, if the ring was simply lying on the ground, the occupier must prove that they intended to control the carpark and everything on it. If they fail to do so, you will have a superior claim.

Do some chattels pass with the land?

What if you decide to sell your house, and the person you’re selling it to demands that the fridge, the paintings and the air conditioning unit must stay? Do you have a right to take any or all of the items?

The answer to this question depends on whether the item is a chattel or a fixture. A fixture is a chattel which has been fixed to the land – it becomes part of the land. The test to distinguish between chattels and fixtures has 2 elements:

  1. The degree of annexation; how attached to the land the item in question is.
  2. The intention of the annexation; for what purpose the owner attached the item to the land.

The tests are highly circumstantial and can be drastically varying; the same thing may be held to be a fixture in one case and a chattel in another.

If a thing is resting on its own free weight, and is in now way attached to the land to secure itself, it is not a fixture. An item being attached to an electrical socket is insufficient. Thus, the fridge can be taken by the owner.

The paintings, however, have a higher degree of annexation. Thus, the intention element must be explored. This is where cases and precedents can get vague. The owner must prove that the paintings were not intended to be fixtures in order to take them.

The air conditioning unit will most likely be found to be a fixture, and will thus stay with the land when it is sold. This is because the degree of annexation is much higher than the other items. Depending on the circumstances the air conditioning unit may be fixed to the wall, connected to electricity and water pumps. It may also be ducted air conditioning, increasing annexation. Finally, the intention with which the units were affixed, whilst again highly circumstantial, may be held to be for the enjoyment of the land. In cases where the land being sold is an office building, the units may be found to be integral parts of regular office buildings, and thus forming part of the land.

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