Property and Property Right

 What is “property”?

 Property - may be defined as an object to which legal

rights may be attached; especially rights of ownership.

 In legal terms, however, property is not an object; it is a

relationship between a person and things.

 The object may be tangible as in the case of physical

pieces of land.
 a tangible thing that people have (e.g. a piece of land, a house,

a watering can, a shovel).

 (in which case it is often referred to as real property ) or

 … an item such as a personal possession that has been bought

in a shop or intangible as in copy right that may be related to

a piece of intellectual property.

 “Property” is also the relationship between different people

with respect to things; it refers to the interest or the right to

exclude or to include others in the use or benefits of certain
things.
 Property law, in systems derived from English common law,
is divided into personal and real property.
 Real property concerns itself with rights in rem, or relating
to land.
 Personal property concerns itself with rights in personam,
or relating to chattels.
 In the civil law system, there is a division between movable
and immovable property.

 Movable property roughly corresponds to personal property,

 while immovable property corresponds to real estate or real
property, and the associated rights and obligations thereon.
 According to Black’s Law Dictionary,
 Real estate means land and any thing permanently affixed to
the land, Land and all things attached to the land such as:
 buildings,
 fences, and
 those things attached to the buildings, ….

 Other such terms which would be personal property if not

attached.
 personal property is furnishers, machinery, equipment’s, and
all tangible propitiates that are not categorized as real estate.
 things or goods can be (corporeal or incorporeal )
 This classification is based on the physical or material
nature of things or objects,
 i.e., it is a classification of things into those that can be
perceived by the senses and those which cannot be so
perceived.
 Corporeal things - are things that have material or
physical existence and unity and hence, can occupy space
and can be seen or touched. Corporeal (movable or
immovable) things such as a house, a car, a machine ,…
 Incorporeal things - are things that do not have a material or
physical existence, that cannot occupy space and hence that
cannot be perceived by the senses.
 For example, copyrights and , patents,…
Generally, What constitutes real property in Ethiopia?

Art.: 1126. Various kinds of goods

 All goods are movable or immovable.

Art. 1l30. Immovable

 Lands and buildings shall be deemed to be immovable.

 It follows that contextually, in Ethiopia immovable property is real property,

and as immovable is land and buildings,

 it follows that land and buildings are real property.

 In short, in Ethiopia, real property is both land and buildings, and not only

land.
 Property can be held by:

 Individual

 Groups of individuals

 Legal persons (organizations such as banks)

 State (such as municipality)

 Rights in real property
• What are property rights?

• Property rights - refer to rules that specify who may do what with a
particular place or thing, for how long and under what conditions
(e.g. who may sell, rent or destroy an object).

• Rights may be defined in relation to a very wide set of issues like:

 ‘human rights’ (the UN declaration),

 rights to medical care,

 rights to retirement funds and

 rights to use of natural resources.

• Rights in Land are sometimes referred to as interest in land,

because when there is a “transfer of land” what actually happens is

that interests in land are transferred from one person to another.

• The ownership of land means the ownership of certain interests in

the land.
• In its most complete legal form - ownership - the property right

over land or a thing grants its holder control of all the sticks in the
bundle.
• In less complete forms - leasehold, rent, mortgage, use
right –
• some sticks in the bundle are controlled by one right
holder
 (e.g. the right to use, the right to derive benefit),

• while others are controlled or held by different parties

 (e.g. a landlord who owns the land,
 the state as the ultimate owner of all land,
 or other individuals or a group of individuals such as a
lineage, a Chief or a company).
• Various interests or rights in land and other assets can be
pictured as consisting of a bundle of sticks,
 each of which represents a different right (or interest)
associated with land or a thing.
 each stick identifying a particular right.
• This bundle of rights contains all the interests in real
property including the right to use real estate,
 sell it,
 lease it,
 enter it and
 give it away, and each stick can be separated from the
bundle and traded it in the market
• For example, a bundle of rights existing on a piece of land can
be disaggregated into:

 the right to derive benefit from the land (e.g. through cultivation or grazing,
which is a use right);
 the right to decide how to use the land and to decide who shall be permitted
 to use it and under what conditions (management right);
 the right to derive income from the use of the land (income right);
 the right to transform it (capital right);
 the right to convey the land to others (e.g. through intra-community
reallocations) or to heirs (i.e. by inheritance), to sell it or to give it away
(transfer right); and
 the right to exclude others from using the land or otherwise interfering with it.

• In this context, “property” refers to all these different rights.

Property rights may include the right to:
 Occupy, enjoy and use
 Restrict others from rent
 Sell, buy or inherit
 Develop or improve
 Cultivate or use for production
 Rent, sublet, or sublet and fix the rent(e.g. free of rent control)
 Realize a pecuniary benefit from increased property values or rental
income
 Access services and Access formal credit
For each right in the parcel there will be an “owner”. Thus one
owner may not hold the overall registered rights to the land through
a title deed.
 Types of Property Regimes

• A property regime - is the structure of rights and duties

characterizing the relationships between individuals to
one another with respect to a specific good or benefit
stream .
• In the literature it is common to differentiate between
four property regime types:
i. private property,
ii. common property,
iii. state (public) property, and
iv. open access
1. Private Property: in this case rights holder may be an
individual, a married couple, a group of people, or a corporate
body such as a commercial entity or non-profit organization.
 Individual families may have exclusive rights to residential parcels,
agricultural parcels and certain trees.
 (e.g. land show that farming plots, residential land plots, buildings,
easements (streets to serve the land property) are owned privately.
2. Communal Property: a right of commons may exist with in a
community where each member has a right to use independently
the holdings of the community.
 communal ownership is a property right allocation made in
the interest of group of users.
(e.g. The most usual types of properties owned in common are grazing
lands, forest lands, fisheries, irrigation systems, underground water, water
wells, village roads, neighborhood streets, and so on.
3. State Property: To describe “state ownership” of land,
terms like “public ownership”, “collective ownership” or
“government ownership” are also employed.

 In this case property rights are assigned to some authority in

the public sector. The ownership is in the hands of the state.
 State land in Ethiopia means, land held by Federal or
Regional government or by city municipalities.

(e.g. forestlands, wildlife protected areas, state farms, mining

lands, lakes, rivers and other rural lands,” as state holding
lands.
4. Open access: in this property regime specific rights are not
assigned to any-one and no-one can be excluded.

 Certainly, open access is ‘what was there in the beginning’.

 An important difference between open access and communal

systems is that under a communal system non- member of the

community are excluded from using the common areas.
 Importance of Property Rights for Economic Growth
Tenure Security
• Security of tenure - is the certainty that a person’s rights to
land will be recognized by others and protected in cases of
specific challenges.
• People with insecure tenure face the risk that their rights to
land will be threatened by competing claims, and even lost as
a result of eviction.
• Land tenure - refers to the manner in which land rights are
held…or
• The way in which rights in land are held is called “Tenure”
• The sources of tenure security may be different in different
situations:

 The community and its specific groups: One of the sources of

tenure security is the community and its specific groups such
as local farmers’ organizations and water users’ associations.

 Governments: It is another source of tenure security as it may

provide political recognition of some rights.
 For example, a government may accept the illegal encroachment and
settlement of a community on state forest lands and undertake not to
evict it.
 However, in doing so, a government usually recognizes the right of
the community to occupy the land.
Land registration and cadastral systems: It is also another
source of tenure security.

The state may provide security in general by affirming the

rights that people hold as well as through specific measures
such as providing protection against trespass.

Tenure security is usually seen to come from protections

provided by the government through land registration and
cadastral systems with adjudication of disputes taking place
in the formal court system.
 Role of Secure property Rights in Poverty Reduction
and Sustainable Development
• What makes property rights secure?

• As we discussed earlier land is the primary means for generating a

livelihood and …
• a main vehicle for investment and wealth accumulation for most of
the poor in developing countries.

• It is a key element of household’s wealth.

• As land constitutes a large share of the asset of the poor in many

developing nations, giving secure property rights to land they
already possess can greatly increase the net wealth of the poor
people.
• They not only influence the structure of governance at local
level but also affect:
 Household ability to produce for their subsistence and to generate
marketable surplus
 Their social and economic status
 Their incentive to invest and to use land in a sustainable manner
 Their ability for self-insurance and access to credit

• Possible theoretical mechanisms of enhancing economic

development through secured property rights:
• Investment incentives
• Credit channel
• Access to land markets
• For these reasons researchers and development practitioners
have long recognized that providing poor people with access
to land and improving their ability to make effective use of
land they occupy is central to:
 Reduce poverty
 Empower poor people and communities

• In many countries, the state continues to own large portion of

valuable land that is conducive to:

 mismanagement

 underutilization of resources

 corruption
 Property Rights to Land

• Ways of Access to land

• a number of strategies by which people gain access to land.

• These include:

 Purchase, often using capital accumulated while working as

migrants in urban areas

 Adverse possession which refers to the acquisition of property

rights, through occupation of the land without any opposition,

• Adverse possession applies to both private and public property.
 Adverse possession is also known as ‘squatters’ rights.

 In some countries, this may be the only method for small

farmers to gain formal access to vacant or abandoned land

and to bring it into productive use
 Leasing, or gaining access to land by paying rent to the

owner.
 Sharecropping, or gaining access to land in return for paying

the owner a percentage of the production.

• Inheritance, or gaining access to land as an heir.
 Desirable Characteristics of Property Rights to Land

i. Duration of Rights
ii. Identification of Boundaries
iii. Subject of Rights

iv. Enforcement Institutions