Sustainable Property Law: Towards a Revaluation of Our System of Property Law

14 Pages Posted: 4 Aug 2020

See all articles by Bram Akkermans

Bram Akkermans

Maastricht University - Maastricht European Private Law Institute (M-EPLI)

Date Written: March 10, 2020

Abstract

At the beginning of the previous century, one of the oldest colleges at the University of Oxford, New College Oxford, was confronted with a problem with the oak beams in the dining hall. Which needed to be replaced. The fellows of the college were posed with a problem on how to solve this when one of the junior fellow raised the idea to see if there were any oak trees on the many pieces of land held in ownership by the college since its foundation. The college Forrester was summoned to the college and stated upon his arrival the he had been waiting for a request of this sort. As it turns out, at the founding of the college in 1379 young oak trees had been planted to supply the college with new wood if this would ever be necessary in the future. So it happened and the new oak beams in the dining hall at New College Oxford can be viewed for over 100 years already.

The foresight of the founders of the college show a design of an institution that is meant to stay for a very long time. The design does not only foresee in the needs of the generation that would use the building, but also incorporates the many generations that would follow. In our modern day terminology, we could conclude that the design of New College Oxford is a sustainable design.

Sustainability, and sustainable development as a method to come to that, are receiving more and more attention in the last years. Sustainability concerns the ideas of preservation and protection. Many proponents of sustainability refer to a photo of the planet earth, taken by an astronaut on board of the Apollo 8 spaceship, and a photo of the earth as a globe from 1972. These photo’s show, according to those proponents of sustainability, that the earth is not limitless and that humanity must treat her with care to enable future generations to enjoy her as well.

This does not only concern ecological sustainability, but also the way in which we live together, choose our government and governance structures, and share or do not share our wealth with each other. In 2015 the United Nations established, after a very long negotiation process, 17 Sustainable Development Goals (SDGs). These goals deal with, apart from ecological sustainability, with democratic governance and economic progress for everyone. They deal, in other words, with wellbeing for everyone. Although these UN SDGs do not have formal legally binding power, all member countries to the UN are expected to give effect to the SDGs by reforming current policy and the making of new policy and legislation.

As can be seen from the example of New College Oxford, sustainability has been considered for hundreds of years already. These are therefore not new initiatives, but the attention they receive is new. At the same time a situation has arisen that requires immediate attention for the sustainability problem. Think, in this context, about natural phenomena such as increasing sea levels and global warming, large forrest fires and mud-streams in the United States of America and Australia, but also the Dutch problems arising from the extraction of natural gas.

How, in other words, have we come to this? In the past decades there has been a lot of attention from natural scientists and economists for this question. Most research points to the ideas of Neo-liberal economics, introduced as a political model by Margareth Thatcher and Ronald Reagan in the 1980s. In Neo-liberal thinking, which builds on 19th century laisser faire thinking in economics, the economy is seen as a balance of offer and acceptance, in which we all participate as rational actors with the aim to enrich ourselves and each other. The market is leading in this and government interference or other supportive measures are not to be taken. Profitability and economic growth are the central driving forces.

Private law plays an instrumental role here as primary supplier of the building blocks of economic development. The freedom of ownership, free circulation of goods and the freedom of contract enable us to give value to a thing, that you may consider to be your own and that you may freely transfer for a value in conformity with the market value of that thing. In this perspective, rules of property law are transactional rules that - together - form a coherent and especially efficient system. To put it simply: a natural person accrues as many things in ownership as possible to enrich himself and to freely and exclusively dispose over these.

It is this - capitalist - system that natural scientists and economists point to as the cause of problems. Extraction and profit have reigned too strongly in past decades. Natural phenomena such as global warming due to the burning of fossil fuels, but also the financial crisis of 2008 are, so these critics state, a direct consequence of the way in which we deal with our things.

A short example to illustrate this. In the period prior to the financial crisis banks became publicly traded companies. The consequence of this was that the main objective of the bank was no longer only to provide good services to its client, but also to grow and make more profit for shareholders and investors. In the 1990s banks succeeded in these new targets and manages to attain up to a factor 20 growth levels. At a certain moment, however, the the market for the granting of loans became saturated, and growth levels stabilized and, with that, also turnover and profits. Banks, led by large stock-exchange listed banks on Wall Street, began to cut loans into pieces and repackage these to be able to sell these to investors as derivatives. With that, journalist Marjorie Kelly shows in her most recent book ‘Owning our Future’ an investment market in products was created that disconnected itself from the real world. A market that became so disconnected that at the beginning of this century a package of loans or mortgages traded on Wall Street no longer automatically represented an actual piece of land. The result of the bursting of the bubble that resulted from this are known and many banks, not only in the US, became insolvent or almost became insolvent as a result of these practices. Private law was, once more, instrumental in this. The loan, a contract, and the mortgage, a limited property right, are the basis of these types of transactions. The result, however, is very disproportional: stareholders were protected, but land- and homeowners lost their land and house.

In the past years a lot of new initiatives have been created that partly provide an answer to the problem of excessive profits and growth targets and that all - in some way - proceed on the basis of sustainability. Examples of this are offered by the sharing economy, with sharing-car company Cambio in Germany and Belgium, housing sharing platform AirBnB and transport platform Uber, circular building and cooperative initiatives of governments, companies and citizens. Also here, private law continues to supply the building blocks on the basis of which these innovative platforms can do their work. For the most part his is the law of contract and not the law of property. In fact, the law of property is pushed to the background by these sharing initiatives in favor of contract law, more than was already the case in the last 30 years.

Sharing, after all, implies the ‘leasing’ of things and not the ownership thereof. In most cases the business model in the sharing economy is the offering of a service on the basis of a right of ownership. Sustainability lies specifically in the idea that the thing is used more often, for example a car that is used more than two cars that stand still all day when their owners are at work. The idea behind this is that producers would produce more sustainable products if their profit does not come from a one-off transfer of ownership, but through a business model where one thing keeps delivering periodic income. The concept of ownership for a consumer becomes superfluous in such an approach.

This seems an undesirable development to me a development that does not automatically serve sustainability. After all, the producer can also claim a higher monthly payment if he replaces the current thing with a nicer, better, more extensive model. Before we, in other words, throw out a part of our law of property, it makes sense to explore the possibilities of a sustainable property law. In order to do that we must (1) look at the role and purpose of private law, (2) at sustainability and property law and (3) see if this can lead to concrete solutions. In order to do this I bring existing literature together, before I come to a proposal for the revaluation of our law of property - mostly based on existing insights - into a sustainable law of property.

Keywords: property law, sustainability

Suggested Citation

Akkermans, Bram, Sustainable Property Law: Towards a Revaluation of Our System of Property Law (March 10, 2020). Available at SSRN: https://ssrn.com/abstract=3645983 or http://dx.doi.org/10.2139/ssrn.3645983

Bram Akkermans (Contact Author)

Maastricht University - Maastricht European Private Law Institute (M-EPLI) ( email )

PO Box 616
Maastricht, 6200 MD
Netherlands

HOME PAGE: http://www.MaastrichtUniversity.nl/b.akkermans

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