UNIT 3: CONCEPTS, RULES AND

PRINCIPLES: (1) THE RIGHT OF

OWNERSHIP. LIMITS AND
RESTRICTIONS. (2) NUISANCE
AND EMISSIONS

LEGAL PROTECTION OF PROPERTY RIGHTS IN SPAIN

Civil Code Basic Regulaton of the Right of Ownership

- ART. 348 CC Ownership is the right to enjoy and dispose of things, provided they are
not used in a way prohibited by statutes.
- ART. 349 CC No one may be compelled to yield his ownership, unless it is declared by
a competent Authority, who justifies it for public purposes and establishes a fair and
previous indemnity. If this does not happen, Judges will protect the expropriated
person and assist him to repossess his right.

CIVIL CODE BASIC REGULATION OF PROPERTY RESTRICTIONS

- ART. 549 CC Servitudes established by statute are for the purpose of public utility or
of the utility of private individuals.

According to article 551 all that relates to that kind of servitudes is to be regulated by the
Civil code, unless other statutes or specific regula3ons apply.

TOWARDS REGULATION OF PROPERTY RIGHTS

- Regulation on property rights has substantially increased after embracing the so-called
statutory conception of ownership (propiedad estatutaria).
- According to this, every kind of asset is subject to a specific property regime, which is
extensively regulated by sectoral laws.
- Each specific set of statutes determines the content and limits of the property rights
on any given object in accordance to its use.
- That way, the rights that the owner holds shall be limited depending on the nature of
the assets at issue.

STATUTORY CONCEPTION OF OWNERSHIP (PROPIEDAD ESTATUTARIA)

Article 8.1 of the Land Law (2008 Soil Act): The right to land ownership covers the powers of its
use, enjoyment and exploitation according to the status, classification, objective
characteristics and destination which it may have at a particular moment, in accordance with
the applicable regulations by taking into account the characteristics and the position of the
property. It also covers the power of disposal, whenever its execution does not infringe upon
the formation of properties and plots and the relationship between them in accordance to
what article 17 provides.

ESSENTIAL CONTENT OF OWNERSHIP

CONSTITUTIONAL COURT defined the essential content of ownership in its 37/1987

JUDGMENT as follows: “[A person] can then talk about the right’s essential content to refer to
that part of the right’s content that is absolutely necessary for having the legal interests
shielded and in such a way that they are real, specifically, and effectively protected. Thus, the
essential content is surpassed or disregarded when the right is subject to limitations that
make it impractical, place difficulties beyond what is reasonable or shed the necessary
protection from it.”

CONSTITUTIONAL COURT JUDGMENT NO. 37/1987 The Court emphasizes that “the essential
content must be understood as (the) recognoscibility of each type of owner’s right in the
historic stage in question and as a practicability or real possibility of selling off this right, and
in a manner that the constraints and duties that might be imposed on the owner could reach
beyond what is reasonable” (STC 37/1987 F.D. 2).

This content could be sum up by the three following strong points:

- Recognition of the owner’s right;

- Practicability of the owner’s right, understood as the owner’s right to make use and to
extract the benefits arising from his assets, and
- Right of disposal of his ownership as he sees fit.

THE BROADENING OF THE RIGHT OF PROPERTY THROUGH THE CONSTITUTION

Ownership as regulated in Art. 33 Constitution

PARAGRAPH 1: recognizes private property as a constitutionally protected right.

PARAGRAPH 2: restricts the extent of the right of property by saying that the limits
of their content shall be determined by the social function that each concrete asset
might fulfill.
PARAGRAPH 3: provides the basic property guarantee that no one may be deprived
of his property and rights except for a justified cause of public purpose or social
interest and in exchange of the corresponding compensation in accordance to the
provisions of law.

CONSTITUTIONAL COURT 37/1987 JUDGMENT

Private property (both in its dual dimension as legal institution and as individual right) has
undergone such a profound transformation in our Century than it can not be conceived today
as a legal concept, which exclusively falls under the abstract category being described in article
348 of the Civil Code”

ARTICLE 128 CE [PUBLIC WEALTH, STATE INTERVENTION]

 1. All the wealth of the country in its distinct forms regardless of its ownership is
subordinated to the GENERAL INTEREST.
2. Public initiative in economic activity is recognized. By law, essential resources or
services, particularly in the case of monopoly, can be reserved for the public sector
and it may also declare the intervention in companies when the general interest so
requires.

THE SOCIAL FUNCTION OF OWNERSHIP

There is even the possibility of uncompensated and unreciprocated sacrifices for the
maintenance and well-being of the polity, as far as such sacrifices are [not] routinely or
arbitrarily demanded by the state (See Gregory Alexander The Social-Obligation Norm in
American Property Law. Cornell Law School Legal Research Paper Series No. 08-002 (2008) ).

THE SOCIAL FUNCTION GOES INTO THE 2006 CATALAN CIVIL CODE

Art. 541.2 CCC [Social function of ownership] “The powers granted by the right of ownership
are to be exercised in accordance with its social function within the limits and restrictions
established by the statutes”.

PRIVATE PROPERTY AS A CONSTITUTIONALLY PROTECTED RIGHT

Article 162 [recurso de inconstitucionalidad]

1. The following are eligible to:

a. Lodge an appeal of unconstitutionality: the President of the Government, the
Defender of the People, 50 Deputies, 50 Senators, the executive corporate
bodies of the Self-Governing Communities and, when applicable, their
Assemblies;
b. Lodge an appeal: any natural or legal person invoking a legitimate interest, as
well as the Defender of the People and the Office of the Public Prosecutor.

2. In all other cases, the organic law shall determine which persons and organs are
eligible.

Article 163 [cuestión de inconstitucionalidad]

If a judicial organ considers, in some action, that a regulation with the status of law which
is applicable thereto and upon the validity of which the judgment depends, may be
contrary to the Constitution, it may bring the mager before the Constitutional Court in the
cases, manner, and with the consequences which the law establishes, which in no case
shall be suspensive.

ACT NO. 39/2015 (OF OCTOBER 1ST) FOR THE COMMON ADMINISTRATIVE PROCEDURE OF
THE PUBLIC ADMINISTRATIONS

Individuals shall be entitled to be indemnified by the corresponding Public Administration for

any damage caused to their assets and rights, except in the event of force majeure , provided
that the harm is derived from the adequate or inadequate operation of public services. The
Supreme Court can establish the State’s liability for legislative acts
ARTICLE 106 CE [CONTROL, INDEMNIFICATION]

1. The Courts control the regulatory power and the legality of administrative acts as well
as its compliance with the objectives which justify it.
2. Private individuals, under the terms established by the law, shall have the right to be
indemnified for any harm they suffer in any of their property and rights, except in the
cases of force majeure, whenever such harm is the result of the functioning of the
public services.

DETERMINATION OF CONTENT: LÍMITES - LIMITACIONES

OTTO VON GIERKE (1841-1921):

- Limits constitute the definition of the normal content of a right, that is, the ordinary
system of restrictions that the title holder is subject to. (eg. Condominium, LPH).
- Limitation is the restriction, compression o ablation of a right that had been already
defined. Occurs when -in individual cases- the power of the title holder is
comparatively reduced. (eg. Expropiation, LEF)

DETERMINATION OF CONTENT OF PROPERTY AND A EXPROPRIATION (TAKINGS)

OLIVER W. HOLMES JR. (1841-1935)

“The general rule is that while property may be regulated to a certain extent, if regulation goes
too far it will be recognized as a taking” US Supreme Cort decision on the Pennylvania Coal Co.
v. Mahon case.

DIFFERENCES BETWEEN “LIMITS” AND “RESTRICTIONS”

EUROPEAN LAW

Statutory limits of the right of ownership – The Gov’t does not have to pay any compensation.
Each owner is treated equally.

Expropriation – It requires Indemnity of the owner. Art. 33 Constitution states “the

corresponding indemnification”

AMERICAN LAW

Regulation – Regulatory takings issue. Specific sectors (U.S. S.Ct. applies some tests).

Takings – Owner is entitled to just compensation award. 5th Amendment of the US

Constitution

APPROACH TO THE RIGHT OF PROPERTY

1. How the right of property is protected,

2. How property rights are regulated or restricted, and
3. How the courts do react to the determinative content of property rights by the
Legislature or by the Government,

RESTRICTIONS TO PROPERTY RIGHTS MIGHT BE PLACED THROUGH

 - Agreements by private parties: Contracts, Personal or real servitudes
- Legislative intervention: Statutory ownership on specific assets » land ownership
(urban developer, Lval RAU) » energy assets (as networks). establishing new legal
concepts » hydrographical public domain. Redefining old concepts anew: » public
domain of the coastal zone
- Administrative intervention: Expropriation Property rights restric.ons have been
succesfully placed in the following areas • Land Law – easements

EASEMENTS / SERVITUDES

Art. 549 CC: Servitudes established by statute are for the purpose of public utility or of the
utility of private individuals. According to article 551 all that relates to that kind of servitudes is
to be regulated by the Civil code, unless other statutes or specific regula3ons apply.

Agrarian acts – lease, expropriation. TC S. 26.3.1987 (Andalusian Parliamentary Act for

Agrarian Reform).

Planning Law – giving up tracts of land, compulsory purchase .

ENVIRONMENTAL ACTS – COASTS, NATURAL AREAS, WATER, HUNTING, FISHING,

PROTECTION OF NATIVE ANIMAL SPECIES AND PLANTS

1985 Water Act (dominio público hidráulico) TC S 29.11.1988 1985

Water Act TC S 29.11.1988 :

- New legal concept: – “Dominio público hidráulico”

- The new Act – does not violate the Spanish Constitution – Social function of water

1988 Coastal Law (ZDPMT) Taroconte, Canary Islands.

1988 Coastal Law (zona de dominio público marítimo-terrestre).

STS 21.3.2012 (Hotel El Algarrobico, Carboneras, AL).

Monfragüe Natural Park (Extremadura) TS 20.1.1999 Clash of Hun3ng Permits near Protected
Area

Constitutional Court Decision 4.7.1991 (Coastal Act) TS S. 13.2.1997 (Natural Area Es Trench.
Balearic Islands)

STS 10.12.1999 Expropriation – “Port Aventura” Theme Park

- Private property was expropriated for “general interest” reasons

- Diference between “public use” and “general interest”
- Qui prodest?
- Who is the final beneficiary of the expropriation proceedings?
- Who will be eventually the owner of the expropriated lands?

HOUSING
 - Empty dwellings: compulsory usufructus / forced lease (Act 18/2007, 28.12.2007)
- Leases: rental price control (Act 11/2020 of 18.09.2020)
- Sale of multi-units buildings when leased: a right of preferential acquisition is being
granted to the Cat Gov’t (Act 17/2019, of 23.12.2019): The right can be exercised by
the Generalitat on behalf of the lessees of rental units (and then passed on to them to
eventually purchase the dwelling).

LIMITS AND RESTRICTIONS ON HOUSING RIGHTS

Art. 7.2 of the Horizontal Property Act (Condominium) regulates the deprivation of the right to
use a dwelling:

- If its owner acts improperly in the building or with disregard to his neighbors.
- The Constitutional Court has dealt with this civil penalty twice.

Art. 42.6 of the 2007 Catalan Regional Act on the Right of Housing contemplates the
possibility of EXPROPRIATING THE USUFRUCT OF EMPTY DWELLINGS FOR SOCIAL RENT
(expropiación temporal).

- It applies to dwellings situated in specific areas which had been previously designated
as areas with residential high demand.
- The Regional Governments Advisory Council issued a legal opinion showing
constitutional reservations to that restriction, since it could interfere with the right of
property.

LIMITS AND RESTRICTIONS ON PROPERTY

Spanish Constitutional Court decision of September 19th 2018 (STC 97/2018) regarding the
expropriation of empty dwellings: The Basque Gov’t can expropriate owners of properties
that lie vacant for a time period of 2 yers or more in areas where there is a high demand for
affordable housing units.

ECHR case: Statileo v. Croatia 10.4.2014: M. Statileo, who was the landlord of a flat which was
formerly part of a specially protected tenancy scheme under Yugoslavia’s socialist regime,
complained in particular that under the new legislation introduced in 1996 to reform the
housing sector in Croatia, he was unable to use his flat, rent it to the person of his choice or
charge the market rent for its lease. A similar case: Gosovic v. Croatia ECHR of 4.4.2017.

Other contested issues regarding restrictions on property rights: SpConstCt January 23rd 2019
regarding the Catalan Law of July 21st 2015 establishing taxes on vacant residential units). Tax
on empty dwellings (“IVV”) is constitutional. – Rental price brake

German Constitutional Court on Rent Control (“Mietpreisbremse”) 2019 BVerfG

Beschluss.
Catalan Act 11/2020 (of 18.09.2020) regarding urgent measures to contain prices in
housing leases – The goal is to limit the price of rents in dwellings located in areas
where demand and prices are rapidly increasing (so-called “tense zones”)

PROPORTIONALITY PRINCIPLE
STC 48/2005 on the Canary Islands Act No. 2/2002

Utilities – networks of vertically integrated undertakings: • Unbundling (separation of

activities) –energy (electricity and gas), –telecommunications

WHAT DOES UNBUNDLING MEAN?

Unbundling means a separation of ownership. Also know as separation of activities

(production, transmission, distribution).

In accordance with domestic law, electricity and gas undertakings are forced to sell their
assets either in production or in transmission, and hereinafter each company will carry out
activities in only one of these aspects. COULD THE FORCED SEPARATION OF THE
UNDERTAKING INTO TWO COMPANIES BE REGARDED AS TANTAMOUNT (EQUIVALENTE)
TO EXPROPRIATION?.

(These are the elements that you’ll have to take into account): It will depend on the court’s
interpretation of several facts, specifically whether:

1. Unbundling was necessary.

2. Unbundling offered the only possible way to achieve the goals as set out by the
European Commission.
3. Unbundling complies with the test of constitutional proportionality, applying both the
test of sufficient connection and the test of reasonable proportionality.

CASES CLOSE-UP

(Private property) Arturo owns 20 hectares of undeveloped land in the area of the Llobregat
Delta, close to the airport, which he plans to develop as a leisure resort with a golf course and
small residential units to golf lovers.

(Public utility / General interest) About half of the land is non-cultivated agrar land, and the
remainder is wetlands. The land hosts a rich variety of native flora and fauna. The Regional
Government (Generalitat) wants to acquire the land and dedicate it for use as a wilderness
area, where tourists could roam for free and also watch birds and other species near the
ponds.

(Expropriation – Compulsory Purchase) The Gov’t offers to buy the land from Arturo, but he
refuses to sell as he considers the offer to be under the real value of the property, given its
location. The Cat Gov’t uses eminent domain to expropriate Arturo’s land.

(Is fighting back eminent domain action possible?) Can the developer (Arturo) compel the Cat
Gov’t to enter into negotiations towards an eventual agreement and dismissing the
expropriation proceeding as unjustified ? – You’ll have first lodge a complain before the
administrative expropriation’s committee and then to challenge the decision before the court
of justice.

Question: Which is the most probable result of the expropriation proceeding?

 a) The Generalitat will prevail because wilderness preservation is a higher use than a
leisure resort for golf players (if the two goals are not compatible with one another).
b) The Generalitat will prevail because a private development of the land cannot stand in
the way of the right that any citizen has to freely roam through Arturo’s property,
since the land is not cultivated at all.
c) Arturo will prevail because the public at large is not entitled to use his private property
without his authorization.
d) Arturo will prevail because the costs imposed on an owner’s property rights outweigh
the benefits that the public could obtain from placing an arbitrary restriction like this
on private property.

The correct answer is: a)