Bundle of Rights

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The bundle of rights theory is a common way of explaining how rights in property are held. It is a theory and teaching tool, and thus is not subject to being either true or false - rather it is a means of organizing a large set of confusing and sometimes contradictory data.

The bundle of rights theory is commonly used in US first-year law school property classes to explain how a property can simultaneously be "owned" in some sense by multiple parties. For example, a husband and wife can be owners (technically, title owners) of real property that is also encumbered by a mortgage and a mechanics lien. Their neighbor may have an easement for a utility line, and a license for entry and exit to a nearby plot of land. Planes have the right to fly through their airspace. Constitutionally, the state and federal governments always hold the right to condemnation, also called eminent domain, and the government at multiple levels retains various regulatory rights such as environmental regulation, zoning, and building codes.

Thus, when examined closely, ownership of land is actually a much more complex proposition than simply acquiring all the rights to it. In order to make sense of this jumble of competing interests, it is useful to imagine a bundle of rights that can be separated and reassembled. A "stack of sticks" - in which each stick represents an individual right (such as the right to possess or sell or lease the property) - is a popular analogy used within the bundle of rights. Any property owner possesses a set of sticks related to the property. For example, perfection of a mechanics lien takes some, but not all, rights out of the bundle held by the owner. Resolving that lien returns those rights or "sticks" to the bundle. In the United States, ultimately, no owner ever holds the fullest possible bundle. Even the US federal government's ownership of land is restricted in some ways by state property law.