When we think of a property say the house which belongs to us and we are living in it, we think of a property which belongs to us in the general sense. However, when there enters the legal aspect of the property ownership, then we learn that there are more complex contexts, in which we have to study the concept of property ownership.
The transfer of Property in today’s world is not just kind of a simple daily transaction, it is the transfer of a set of rights together with the transfer of property, which define what can or cannot be done with the property by the people who are the owner of the property.
The term Bundle of Rights represents the different powers and privileges that get transferred along with the transfer of property. Whether it be a piece or parcel of land, a kind of an infrastructure or building or an intangible property like Intellectual Property via Copyrights, Patents and Trademarks, whenever the ownership of these properties gets transferred, the several distinct rights which these properties might have been encompassed off, get transferred together with them.
The collection of these distinct several rights is often termed as the “Bundle of Rights”. This collection of rights outlines the different ways an owner can control, use, and transfer his property. This collection of rights is a bundle since it includes multiple individual rights tied together under ownership. Each of these rights represent a specific ability or restriction with regards to the property.
The Glossary Definition of the term Bundle of Rights says that –
All Real Property Rights that are conferred with ownership, including the right of possession, right of quiet enjoyment, right of disposition, right of exclusion, and the right of control. Also called Bundle of Stick.
The term Bundle of Rights actually comes out of the old English where back in medieval times when a property might have been sold all the villagers would come out to witness this transfer of ownership and the seller might pick up a handful of earth and pass it on to the buyer signifying he or she was transferring the land and then the seller would take a bundle of sticks and pass those sticks along to the buyer and those sticks are represented all the rights that went along with ownership, the right to sell the property and right to possess it the right to Lease, the right to plant crops, the right to hunt and fish on the property and so on. So, this concept of the bundle of rights arose out of this old English ceremony call actually was called the livery of season.
The constituents of Bundle of Rights –
There mainly five components which together constitute the term “Bundle of Rights” –
1. The Right to Possess: The Right to possess under the Bundle of Rights can be construed as a Fundamental Right of ownership of the owner of the property which he has over the Property. This right provides the owner, the right and authority to occupy or take the physical control of the Property. For example, if one owns a property say a piece and parcel of a land, then he can live on it, build on it, or use it as a home base for other activities and he can even rent out his property.
2. The Right to Control: Control over the property refers to the right of the owner to decide the manner in which his property can be used. It is a right of the owner to maintain and keep his property within the limitations of law. Whether it be the decisions of the owner on the maintenance, renovations, and any adjustments to the property, within the limitations of law the owner of the property has the right to maintain his property with the power of this right only. However, these rights are often regulated by the local zoning laws or restrictions. These laws often dictate the terms of the property usage and thereby limit the ways in which the property could be utilized.
3. The Right to Enjoy: The owner of the property has a right to enjoy a quiet and peaceful possession of the property without any hindrance or annoyance. The Right to Enjoy ensures the protection of the owner’s peaceful enjoyment of the Property, in a way that he likes. With this right, the owner can enjoy his property for leisure or for business purposes that depends upon him. This right too is often subject to certain laws made in the interest of public policy, for example the owner cannot do such activities which would cause nuisance to others, or which may infringe on the properties of the neighboring property owners.
4. The Right to Exclude: As the owner of the Property, one is always of the thought, that he has at least the right to permit or restrict the persons to enter into his premises. This right is one of the most empowering rights under the Bundle of Rights and it ensures the owner’s right to privacy and security by providing the owner the discretion over the denial or access to persons who do not have the permission to enter upon your property. This right too is often subject to exceptions whereby the government or utility companies are empowered to breach this right to exclude of the owner of the property under specific circumstances for example, where there is a need for inspection or in any emergency.
5. The Right to Dispose: The term ownership with its inherent meaning is the ability of the owner to sell, transfer and convey and even lease his property. The Right to Dispose allows the owner of the property to decide the next person who will have the property in the future, and it enables the owner to make plans for the disposal of the property by way of gift or in a profitable manner.
The Transfer of Ownership is the concept of the transfer of bundle of rights where we talk about different aspects of ownership. Here, in the picture shown above is the schematic picture and it is a cross-section of a piece of Earth, and it can be seen that there is water flowing through it. So, some of the rights would be Water Rights. Above that there are the Air Rights. There are Agricultural Rights. Below the ground, there are Mineral Rights over on the right-hand side. There are Development Rights where the house stands and many other rights. Two of the terms one should be aware of: the first one being Riparian Rights. The term riparian refers to water and Riparian Rights that an owner might have next to a river or stream. So, if one owns property next to a river or a stream in some states not all states one may have the ability to use that water.
Another term is Littoral Rights and Littoral Rights refer to the zone between the high water and low water where a property has a property along a lake or the ocean so in most instances of course the owner does not have the rights to build or develop in that littoral zone even though sometimes people do it sometimes mistakenly but it can pose some problems so these two terms are the terms that you might hear the term riparian rights dealing with water rights and littoral rights, rights that someone might or might not have along a Tidal Zone.
Limitation of Bundle of Rights –
Although, the Bundle of Rights provide the owner of the property full permission to use and occupy his premises the way he likes without any hindrance and interference along with the ability to exclude others from his premises, but all these advantages are often subject to exceptions and governmental or other limitations. That means the rights embodied under the term Bundle of Rights are not absolute and certain laws and regulations and limit their exercise, for instance:
- Eminent Domain: The Government always has under the law, the authority to use someone’s private property when it is required for the public use provided that just and fair compensation is provided to the owner. Often the huge governmental projects like highways and bridges are made so this rule comes into picture.
- Zoning Laws: Many times, it has been seen that the local government limit certain activities that cannot be pursued without its permission like the development of the floors above a certain restriction may require a prior approval of the local government etc. That means an orderly development has to be done in the interest of community welfare.
- Environmental Regulation: Environmental laws are the necessary regulation often provided by the government to protect the environment and that the bundle of rights may be restricted by declaring certain activities illegal during the occupation of the premises to protect and conserve the environment.
I am a Commerce Graduate and Real Estate Consultant.