The Titling Role of Possession
In Yun-chien Chang, ed., The Law and Economics of Possession, Cambridge University Press, Cambridge, 2015, 207-33
29 Pages Posted: 2 Sep 2014 Last revised: 23 Jul 2018
Date Written: June 29, 2014
This paper proposes two hypotheses on the publicity requirement and the limitations of possession to provide information for legal titling. It then tests these hypotheses by examining how legal systems deal with possession in movable and immovable property, and comparing actual and documentary possession. It concludes that exercise of possession is effective as a titling mechanism when it is observed by independent parties, thus providing publicity and verifiability of titling-relevant elements. However, given that possession is only effective to inform about a single in rem right, direct and automatic reliance on possession for titling requires that all other rights be diluted to in personam status or be burdened by the possessory in rem right. In any case, public knowledge of possession, either in its delivery and/or its exercise, is essential for possession to play a public titling function. Similarly, documentary possession is only effective as a public titling mechanism in the absence of multiple rights in rem.
Keywords: property rights, enforcement, transaction costs, registries
JEL Classification: D23, G38, K11, K12, L85, O17, P48
Suggested Citation: Suggested Citation