Akkermans. Concurrece of Ownership and Limited Property Rights-1

remains full and complete, albeit limited by the existence of limited property rights. Since Johow was drafter of the property section in the BGB, the code reflects this differing conception of the creation of limited property rights.

However, German property law authors do not seem to adhere to the limitation model completely. Von Tuhr writes about the right of ownership as a mother-right from which a limited property right, the daughter-right, is derived.40 The daughterright, in this view, burdens the mother-right and limits the holder of the mother-right in the exercise of the right. Von Tuhr therefore seems to adhere to the limitation model only partially.41 Other authors, Baur, Baur and Stürner and Wolf, deal with the issue, but not along the same lines as Johow and Windscheid.42 Their handbooks explain the process by describing the powers of the owner as a whole undividable unit, but recognizing the ability to transform some specific powers into a property right other than ownership. This explains their use of the term ‘abspalten’, which best translates as ‘separate’, in relation to powers of the owner.43 Wolf even uses the term Teilinhalte aus dem Eigentum or ‘parts of ownership’ to describe limited rights.44

2.3Dutch Law

The distinction between the subtraction and the limitation models is not new. Struycken emphasizes that the two models have also been considered in the Netherlands, partly under the influence of German law.45 He names these models the afspiegelingsmodel, mirror model, and the afsplitsingsmodel, subtraction model.46 Also in an earlier dissertation Rank-Berenschot focussed attention on Diephuis, one of the most influential Dutch writers of the nineteenth century who asserted, when discussing the relation of ownership and limited property rights, that:

It does not take away parts of the right of ownership, because ownership is not a set of combined parts, and the limited property rights are so different in content and size, that they do not remind us of specific parts.47

40A. von Tuhr, Der Allgemeine Teil des Deutschen Bürgerlichen Rechts, vol. II (Munich & Leipzig: Duncker und Humblot, 1914), 62.

41I owe gratitude to my colleage Dr Lars van Vliet for his work on the Ius Commune Casebook Property law and the translation of the terminology of von Tuhr provided in that book.

42F. Baur, J.F. Baur & R. Stürner, Sachenrecht, 18th edn (München: C.H. Beck’sche Verlagsbuchhandlung, 2009); M. Wolf, Sachenrecht, 24th edn (Grundrisse des Rechts; München: Verlag C.H. Beck, 2008).

43Baur, Baur & Stürner, 2009, 19; Wolf, 2008, 4.

44Wolf, 2008, 4.

45Rank-Berenschot, 1992, 105–107; Struycken, 2007, 361 ff.

46Struycken, 2007, 361.

47Diephuis, Het Nederlandsch burgerlijk regt – Deel VI (Groningen: Wolters, 1880), 474. ‘Er wordt daardoor niet een deel van het eigendomsregt van de overige deelen afgescheiden, want eigendom is geen uit verschillende deelen zamengesteld geheel, en de zakelijke regten zijn zoo verschillend in inhoud en omvang, dat ze ons ook daardoor aan geen bepaalde deelen doen denken.’

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A few years later the Dutch author Land, in his commentary on the Dutch Civil Code, argued, under reference to German Pandectists, that it is possible to recognize a dominium quiescens or sleeping ownership, he states:

Some, for example Vangerow §328 Anm. 1 in f., choose to speak, not of lessening ownership but of lessening its exercise; to this extent it is dominium queiescens, the ownership exists, but rests or sleeps for that part. This should show, that with the extinction of the limited property right on the object of another the right ownership regains the power that was temporarily lost, without the need for the owner to re-acquire this part of the right.48

However, these authors were in the minority.49 The new Dutch Civil Code, whose property part has applied since 1992, following the French model, follows the subtraction model.50 Article 3:8 of the Dutch Civil Code states:

A limited right is a right that is derived from a more comprehensive right.51

2.4English Law

The relevance of explaining the creation of property rights is not limited to civil law systems. English law also addresses the question. English property law is characterized by the double distinction between land law and personal property law and common law and equity.

48 N.K.F. Land, Verklaring van het Burgerlijk Wetboek – II (Haarlem: De Erven F. Bohn, 1901), 7, n. 1, ‘1) Sommigen, b.v. Vangerow para. 338 Anm. 1 in f. verkiezen te spreken van vermindering, niet van den eigendom, maar van zijne uitoefening; voorzoover is dan het dominium quiescens, de eigendom bestaat, maar rust voor dat gedeelte. Men wil daarmede aanduiden, dat bij het vervallen van een zakelijk recht op eens anders goed de eigendom van zelf weder het tijdelijk verloren terrein inneemt, zonder dat de eigenaar op nieuw dit deel van het recht heeft te verkrijgen’. The reference to Vangerow is K.A. von Vangerow, Lehrbuch der Pandekten – Zweites Buch (Marburg: Elwert’sche Universitäts-Buchhandlung, 1876), 686 ff.

49See Rank-Berenschot, 1992, 105–107.

50Struycken, 2007, 363–366; E.M. Meijers, Algemene leer van het burgerlijk recht – deel I – De Algemene Begrippen van het Burgerlijk Recht (Leiden: Universitaire Pers, 1948), 280–281. There are, however, rights in Dutch law that seem to follow the limitation model. This concerns, in particular, qualitative duties in the law of obligations. These quasi-property rights have a limiting effect on the right of ownership of a dominant piece of land but are not constructed as comprising an element of the right of ownership itself. Justification for this would be the place of these qualitative duties in the law of obligations (book 6 of the Dutch Civil Code) rather than in the law of property. On qualitative duties see B. Akkermans, ‘The New Dutch Civil Code: The Borderline between Property and Contract’, in

Towards a Unified System of Land Burdens?, eds J.H.M. van Erp & Bram Akkermans (AntwerpenOxford: Intersentia, 2006), 163–183; N.C. van Oostrom-Streep, De kwalitatieve verplichting (Diss.) (Den Haag: Boom Juridische Uitgevers (BJU), 2006).

51Article 3:8 BW, ‘Een beperkt recht is afgeleid uit een meer omvattend recht.’

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Land law and personal property law each recognize a different catalogue of property rights, which may exist at common law or in equity.52 In English land law, the subtraction model seems to apply to the creation of limited property rights at common law. When a holder of a fee simple grants a term of years absolute to another party, he conveys parts of his rights to the tenant. The tenant will now enjoy some of the rights that previously belonged to the holder of the fee simple.53 The holder of the fee simple will still hold the fee simple but its content is diminished. Like civil law doctrine, English lawyers use a specific term for the right of the holder of the fee simple that remains after the lease is granted. In civil law, this is known as bare ownership; in English law, where there is no ownership of land in the civil law meaning of the term, the right that remains is called the reversion.54 The reversion itself is a right that the holder of a fee simple may grant as a remainder to a third party.55

However, at the same time the limited seems to be followed to describe the creation of lesser rights in equity. When, in English law, a right is created in equity, that right is additional to the right that already exists at common law. This approach is best since in the case of trusts of property rights.56 Swadling has recently considered where the equitable right of the beneficiary in a trust relation comes from.57 He argues, under reference to a judgment of Lord Browne-Wilkinson in Westdeutsche Landesbank Girozentrale v. Islington LBC that when, at common law, a property right grants the full right of use and enjoyment to a person, no equitable right can exist.58 When a trust is created, an additional right in equity comes into existence on behalf of the beneficiary that burdens the right of the trustee at common law. With

52As equity follows the law, those property rights that can exist at common law are also recognised by equity as property rights. Vice versa, however, this is not the case as the list of property right in equity is longer than the list at common law. See A. Pretto-Sakmann, Boundaries of Personal Property. Shares and Sub-Shares (Diss.) (Oxford-Portland, Oregon: Hart Publishing, 2005), 3–4, E.L.G. Tyler & N.E. Palmer, Crossley Vaines on Personal Property, 5th edn (London: Butterworths, 1973), 3; F.H. Lawson & B. Rudden, The Law of Property, 3rd edn (New York: Oxford University Press, 2002), 13–14.

53See E.H. Burn & J. Cartwright, Cheshire and Burns’s Modern Law of Real Property, 17th edn (Oxford: Oxford University Press, 2006), 510 ff.

54On ownership of land in English law, see W.J. Swadling, ‘Property: General Principles’, in English Private Law, ed. Peter Birks (Oxford: Oxford University Press, 2000), vol. I, 203–384, at 224–225. However, see Honoré, 1961, 107–147, at 107 ff.; Burn & Cartwright, 2006, 27.

55See W. Holdsworth, A Historical Introduction to the Land Law (Oxford: Oxford University Press, 1927; Reprint 2004, The Lawbook Exchange Ltd., Clark, New Jersey), 65 ff.; Burn & Cartwright, 2006, 510 ff.

56A trust of a personal right does not create property rights. See W.J. Swadling, ‘Property: General Principles’, in English Private Law, ed. Andrew Burrows (Oxford: Oxford University Press, 2007), 219–401, at 271–272.

57W.J. Swadling, ‘Explaining Resulting Trusts’, Law Quarlertly Review 124 (2008): 72–102, at 94–96.

58Westdeutsche Landesbank Girozentrale v. Islington LBC [1996] AC 669, HL, at 706 per Lord Browne-Wilkinson. Swadling, 2007, 219–401, at 271–272.

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respect to property rights in equity therefore, it seems English law adheres to the limitations model.59

3.Extinction of Limited Property Rights

3.1French and Dutch Law

The model by which a limited property right is created is relevant for the way in which it can cease to exist.60 Following the subtraction model, as soon as the right of ownership and the limited property right fall into the same hands the powers in the limited property right will merge with the powers of the rights of ownership and the limited property right will cease to exist.

Both the French and the Dutch Civil Code prescribe how limited property rights are ended upon concurrence with the right of ownership. In the Dutch Civil Code, Article 3:81(2) of the Dutch Civil Code deals with the loss of property rights by merger alongside the general rules on patrimonial law.61 The French Civil Code does not have a general part dealing with patrimonial law and therefore deals with the extinction of limited property rights through merger with the right of ownership in the specific articles dealing with these property rights.62 In any case, concurrence of ownership and a limited property right in the same hands is, in principle, impossible in both French and Dutch doctrine.

However, the démembrement model has some disadvantages, especially regarding third parties who hold a property right in the limited property right that ceased to exist through merger with the right of ownership. From the 1930s, the Cour de cassation has been confronted with the negative effects of concurrence of ownership and other rights, especially leases.63 Although leases are not property rights in French law, the reasoning of the Court also applies to limited property rights.64 The first case concerned a right of lease of an immovable object that was granted with an option to purchase the immovable object at the end of the lease agreement. Before the end of the lease agreement, the lessee acquired ownership of the immovable object. The seller then sought to rescind the contract of sale. The question before the court was whether the seller would profit from an increase in the value of the

59This seems to be in line with the idea that originally rights in equity were mere personal rights and therefore would be imposed on the property right rather than comprise parts of that property right. F.W. Maitland, Equity. A Course of Lectures, ed. A.H. Chaytor, W.J. Whittaker & J. Brunyate

(Cambridge: Cambridge University Press, 1936), 23.

60See also Struycken, 2007, 361–362.

61C. Asser et al., Goederenrecht 3 – I Algemeen Goederenrecht, 15th edn (Mr C. Asser’s handleiding tot de beoefening van het Nederlands burgerlijk recht; Deventer: Kluwer, 2006), n. 10, 11.

62For example, Art. 617 C.civ. (Usufruct), Art. 705 C.civ. (Servitude), Art. 2392 C.civ. (Antichresis).

63See Civ. 29 janvier 1930, D.P. 1932, 1, 58, Req. 18 octobre 1927, D.P. 1928, I, 35, Cass. Civ. 3 26 janvier 1972, D. 1975, 22.

64T. Vialatte, ‘L’effet extinctif de la réunion sur une même tête de qualités contraires et ses limites’,

Revue Trimestérielle de Droit Civil (RTD Civ) LXXVI (1978): 568–596, at 571.

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immovable if rescission of the contract of sale was successful. In order to understand the court’s reasoning, it is necessary to understand that the existence of a right of lease on the immovable object depreciates the value of that object.65 If the right of lease had ceased to exist because of concurrence of lessor and lessee in the same person, the immovable object would have increased in value. This effect on the value of the immovable object led the Court to decide that the lease persisted.66 Therefore, concurrence of ownership and other rights will not bring a property right to an end if a third party holds a right on the object as well and this right affects the value of the object. In a case that also concerned a right of lease of an immovable object the Cour de cassation held that a property right would also survive such a situation.67

When this reasoning is applied to property rights, an additional doctrinal question arises: what happens to the limited property right when ownership and the property right are in the same hands? Vialatte states that opinions are divided on this point.68 Some authors believe that the effect of concurrence is relative, simply paralyzing the right because the right of ownership and the limited property cannot be exercised at the same time.69 Others argue that this is simply the limit of the effect of concurrence.70 Neither of them seems to answer the question in full, and Vialatte remains unclear on the exact property law effects of concurrence. However, it is clear that concurrence of ownership and property rights will not always end a property right outright.

In Dutch law similar reasoning is applied, but not with the same effect: Article 3:81(3) BW specifically provides rules to prevent some of the undesired effects of concurrence of ownership and property rights. The article states:

Renunciation and merger of property rights do not have effect against those who have a property right in the property right that ceases to exist. Merger of property rights also does not have effect against those who had a property right in the same object as the property right that ceases to exist and they should respect that property right.71

65Vialatte, 1978, 568–596, at 571–572.

66Vialatte, 1978, 568–596, at 574.

67Req. 11 mai 1926, D.H. 1926, 314; S. 1927, I, 94, Com. 5 novembre 1959 Gaz. Pal. 1959, I, 85. See Vialatte, 1978, 568–596, at 574–575.

68Vialatte, 1978, 568–596, at 575.

69M. Planiol, G. Ripert & P. Eismein, Traité pratique de droit civil français, tôme VII (Paris: Librairie Générale de Droit et de Jurisprudence, 1952), n. 1300. This is also the solution followed in Dutch law discussed immediately below.

70Lagarde, note to Civ. 12 juillet 1933, S. 35, I, 289.

71Article 81(3) ‘-1 Afstand en vermenging werken niet ten nadele van hen die op het tenietgaande beperkte recht op hun beurt een beperkt recht hebben. Vermenging werkt evenmin ten voordele van hen die op het bezwaarde goed een beperkt recht hebben en het tenietgaande recht moesten eerbiedigen’.

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In the explanatory memoranda to the article the Dutch legislature states that if, for example, a right of hypothec was created over a parcel of land that was burdened with a right of servitude and the ownership of the dominant and of the servient land fall into the same hands, the right of servitude will cease to exist. However, the right of hypothec will remain to rest on one of the parcels of land. If the holder of the right of hypothec realizes his right, the right of servitude will revive for the benefit of the new owner.72 Another example would arise where more than one right of hypothec is created on the same object. When the holder of the first right of hypothec becomes owner of the object, the right of hypothec merges with the right of ownership and ceases to exist. However, this merger will not work to the advantage of the second hypothecee, whose hypothec remains secondary with respect to the holder of the hypothec.73

In Dutch law, the effect of an extinction of a property right through merger with the powers of the owner is therefore merely relative. It is no surprise that in Dutch property law this effect causes some doctrinal difficulties. These difficulties especially concern the relative nature of the effect. The leading opinion is that the property right ceases to exist but that this has no effect against the holder of a property right on such a property right.74 Effectively this means that a property right can have a ‘second life’, even after it has ceased to exist.75

3.2German Law

In German law, paragraph 889 BGB specifies the opposite of the Dutch solution, but does not provide a doctrinal explanation how it is possible to have both ownership and limited property right in the same object at the same time. The limitation model might provide an answer here.

If the right of ownership cannot be fragmented and cannot be characterized as a sum of powers and a limited property right contains rights that might be modelled or mirrored after the right ownership, there is no merger upon concurrence of these rights. Rather, there is a combination of two similar powers in the same hands. Although a strange situation arises in which one person is both holding a right that

72Example from C. Asser et al., Goederenrecht 3 – II Zakelijke rechten, 14th edn (Mr C. Asser’s handleiding tot de beoefening van het Nederlands burgerlijk recht; Deventer: Kluwer, 2002), n. 13, 15–16 and Asser et al., 2006, n. 19, 18–19; see also C.J. van Zeben & J.W. Du Pon, Boek 3 – Vermogensrecht in het algemeen (Parlementaire Geschiedenis van het Nieuwe Burgerlijk Wetboek; Deventer: Kluwer, 1981), 311; Rank-Berenschot, 1992, 235 ff.

73In other words, the mixing of the right of first hypothec with the right of ownership must not have an effect to the advantage of the holder of a second right of hypothec. However, this situation only arises when the claim for which the right of first hypothec was created remains in existence. Van

Zeben & Du Pon, 1981, 840–841, C. Asser et al., Goederenrecht 3 – III Zekerheidsrechten, 13th edn (Mr C. Asser’s handleiding tot de beoefening van het Nederlands burgerlijk recht; Deventer: Kluwer, 2003), n. 353, 378; Asser et al., 2006, n. 19, 18–19.

74Asser et al., 2006, n. 18, 17–18.

75See also Rank-Berenschot, 1992, 238.

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allows him to do with the object what he wishes and a right that limits him in this power, there is no doctrinal necessity for either of the rights to be ended.

Remarkably enough, the reasons advocated by Johow and the commission drafting the BGB for the effect of paragraph 889 BGB are the same as the Dutch legislature in respect to the relative effect of extinction of property rights through merger. However, where the German legislature seems to have decided to structure the system of property law around this issue, the Dutch legislature considered it had to accept a deviation from the general system.

Moreover, it is interesting that the modern German authors mentioned above find the answer in the application of paragraph 889 BGB. By virtue of the paragraph, a property right on an immovable object will not cease to exist when the owner acquires the property right; this will only occur if the owner so desires.76 However, in other situations the limited right will cease.77 Baur, Baur and Stürner explain this situation by referring to the ranking of property rights.78 It is possible for several limited property rights to exist in the same object. Especially in case of a sale in insolvency the order and existence of these rights becomes very important. The owner of the object can, under certain conditions, participate in the ranking of the aforementioned limited property rights.79 On this reasoning, the extinction of a property right would result in improved ranking for the holders of other property rights.80

Furthermore, an explanation can be given by reference to third parties holding a property right in the limited right that would cease to exist where there was concurrence. Such a situation can occur when an owner acquires land over which a right of servitude has been created and subsequently transfers it to another party. The need to create a new servitude with the same content as the previous one is thought to entail unnecessary costs.81

Following the reasoning of Baur, Baur and Stürner, if such a situation includes a situation whereby an owner himself has acquired a property right on his immovable object, the owner will take part in an insolvency with a ranking as owner and a ranking as holder of a property right. In effect, the owner will actually participate in two capacities: as owner and as holder of a limited property right.82

76This power would include a limitation on the owner to decide so if there are third parties with a right on the property right in question.

77Also the Staudinger Commentary does not consider the statement by Johow quoted above but only refers to the passage from the Motive suggesting that the solution is for legal science to decide. See von Staudinger & Gursky, 2002, 314. M. Wolf, Sachenrecht, 21st edn (Grundrisse des Rechts; München: Verlag C.H. Beck, 2005), 5.

78Baur, Baur & Stürner, 2009, 29–30.

79Baur, Baur & Stürner, 2009, 29–30.

80See also von Staudinger & Gursky, 2002, 311.

81von Staudinger & Gursky, 2002, 311.

82See also von Staudinger & Gursky, 2002, 314.

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It is here that difficulties with the doctrinal argumentation arise. When a limited property right, like in French law only comprises parts of the right of ownership from which it was derived, concurrence of limited property rights and ownership is impossible.83 Therefore, in German doctrinal reasoning there must be more to a limited property right than just the powers that came from the right of ownership.

An intermediate theory on the nature of limited property rights, which was already mentioned in the introduction, advocated by Knöchlein, brings the focus from property rights to the claims to protect the right vis-à-vis third parties (Ansprüche).84 In respect to third parties there are individual claims to protect each property right respectively. When these rights fall into the same hands, it does not imply that the claims vis-à-vis third parties merge with each other. From the perspective of the third party there are still two individual, albeit concurrently held, set of claims protecting each of the two property rights. This is what is known as Doppelwirkung or the existence of concurrent claims.85

However, when analysed from the perspective of the creation of limited property rights, a doctrinal conflict arises. When property rights are created by means of démembrement, the limited property right comprises powers temporarily taken from the right of ownership. It can be accepted that these powers in the hands of another person give rise to a separate set of claims to protect the right vis-à-vis third parties. However, these claims follow from the content of the powers of the right of ownership that are temporarily in the hands of a person other than the owner. When the powers contained in the limited property right merge with those contained in the right of ownership, the limited property right ceases to exist and the foundation for the separate set of claims vis-à-vis third parties is lost.

3.3Another Explanation of German Law

Perhaps the system of the BGB should be understood in another way. When a limited property right is created in an immovable object and the right returns to the owner, paragraph 889 BGB prevents extinction of the limited property right. On this approach there can be no démembrement in German property law. Concurrence of ownership and the property right would not cause merger of the owner’s powers with those contained in the limited property right, but a situation where the restriction on the owner’s power is temporarily irrelevant since the owner holds both the power and the right restricting it. The transfer of the limited right to another person will not change the right of ownership in any way, nor will it change the limitations on the powers of the owner.

83See para. 3 Extinction of Property Rights.

84Knöchlein, 1991, 213–214.

85Kipp, 1911, 211–233, at 211 ff.

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When ownership and the property right fall into the same hands, the limited property right will continue to exist. In that situation, the owner is able to exercise his powers in his capacity as owner as well as his powers in his capacity as right-holder of a limited right.86 Property rights in German law therefore do not limit ownership as such, but only burden the owner’s powers, with effect against third party.87 This would be in line with the statement in the Motive dealing with other restrictions to the right of ownership than limited property rights:

8. The limitations on the ownership by force of law dealt with in this title are not absolute in nature. The owner can establish property rights – real servitudes or limited personal servitudes – on his own land, which decrease or annul the powers of the owner that follow from the current chapter.88

In terms of doctrine, this allows the retention of a unitary concept of ownership. The owner has not lost the powers characteristic of that status, and the property right, which coexists with the ownership, only burdens these powers.89 Finally, with respect to property rights in movable objects or rights, specifically usufruct and pledge, the situation is different. By virtue of provision in the BGB these rights cease to exist when the owner acquires them.90

The conception of limited rights as separate rights coexisting with the right of ownership also enables the owner to create a limited right on his own object. Creating a limited right on his own object allows the owner to create a right on his own terms and conditions. The advantages of this are twofold. First, the limited right will

86von Staudinger & Gursky, 2002, 314.

87In other words, the limitation does not just have effect between the parties but also binds successors in title.

88‘8. Die in diesen Titel bestimmten gesezlichen Eigenthumsbeschränkungen sind nicht absoluter Natur. Der Eigenthümer kann an seinem Grundstücke dingliche Rechte – Grunddienstbarkeiten oder beschränkte persönliche Dienstbarkeiten – bestellen, welche die aus dem gegenwärtigen Abschnitte sich ergebenden Rechte des Eigenthümers mindern oder aufheben’, Motive zu dem Entwurfe eines Bürgerlichen Gesetzbuches für das Deutsche Reich – Sachenrecht, III (Berlin: Verlag von J. Guttentag, 1888), 260.

89This approach seems to be followed by Müller who states ‘Rechte Dritter, die im Rahmen des § 903 BGB die sich aus dem Eigentum ergebende Herrschaftsbefugnis beschränken, sind die beschränkte dinglichen Rechte (…). Insofern ist das Eigentum als zunächst allumfassendes Herrschaftsrecht gegenüber den beschränkt dinglichen Rechten subsidiär: Das sich aus dem Eigentum ergebende Herrschaftsrecht wird durch ein beschränktes dingliches Recht im Umfang seines Inhalts verdrängt. Deshalb is es zutreffend, beschränkte dingliche Rechte auch als Belastung des Eigentums zu definieren’; K. Müller, Sachenrecht, 4th revised edn (Academia Iuris. Lehrbücher der Rechtswissenschaft; Köln-Berlin-Bonn-München: Carl Heymanns Verlag KG, 1997), 100. Also affirmative of this view is W. Schön, Der Nießbrauch and Sachen. Gesetzliche Struktur und rechsgeschäftliche Gestaltung.

(Köln: Verlag Dr Otto Schmidt KG, 1992), 12–13.

90§ 1063 and § 1256 BGB, von Staudinger & Gursky, 2002, 313.

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rank from the moment of creation. Any property right created at a later moment will be lower in rank than the limited right created by the owner. Secondly, it allows the owner to transfer his ownership while retaining a property right that was created on his own terms and conditions with the ranking he wishes.91 This can be done with all the rights on land and for some rights on other objects.92

3.4English Law

Some evidence that English law adheres to different models of creation depending on whether property rights are created at common law or in equity might be taken from the rules on the extinction of property rights.

A term of years absolute, that is a lease of land, can end in two ways. First, when the tenant surrenders his lease to his landlord, the lease will merge with the landlord’s reversion and will be extinguished.93 Secondly, when the lessee continues to hold the lease but acquires the reversion, the rights will also merge and the lease will cease to exist. A full fee simple will result.94

However, a trust of a property right will come, albeit under conditions, to an end on the request of the beneficiary.95 In such a situation the legal right of the trustee will be transferred to the beneficiary, who will no longer just hold an equitable right, but will now hold the property right outright, the equitable right will cease to exist, but not though merger with the legal right.96

4.Relevance for European Property Law

This overview shows that there are two different models to create limited property rights and that these models are adhered to in different legal systems. They reflect fundamental differences in the doctrinal foundations of the systems of property law. However at the same time an overview of the legal systems adhering to these models shows a very consistent approach in respect to the model that is followed.

In the four systems examined, the limitation theory seems to be in the minority. In fact, in German law it is questionable whether the conception continues to be followed and adhered to by modern day property law experts. In English law, the nature

91B. Hess, ‘Dienstbarkeit und Reallast im System dinglicher Nutzungs-und Verwertungsrechte’, Archiv für die civilistische Praxis 198 (1998), 489–515, 501.

92On the difficulty with usufruct see K.H. Schwab & H. Prütting, Sachenrecht. Ein Studienbuch, 31st edn (Juridische Kurz-Lehrbücher; München: Verlag C.H. Beck, 2003), 422. On rights of servitude see J. von Staudinger et al., Buch 3 Sachenrecht – Erbb VO; §§ 1018–1112 (J. von Staudingers Kommentar zum Bürgerlichen Gesetzbuch mit Einführungsgesetz und Nebengesetzen; Berlin: Sellier – de Gruyter, 2002), 238.

93Swadling, 2007, 219–401, 393.

94Swadling adds that the same occurs when a third party acquires both lease and reversion. Swadling, 2007, 219–401, 393.

95Saunders v. Vautier (1841) 15 Ch D 639.

96See Swadling, 2000, 203–384, 341–342.

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