Property

Abstract

When we talk about shares of a particular class in a specific company, we are referring to homogeneous and identical items. The price of one share is exactly the same as the price of the others. The rights of the respective shareholders are identical. The term ‘pari passu’ is an indication of this feature in shares. By contrast, no two houses or office blocks can occupy the same site. Nor are they likely to be in an identical state of repair, or occupied by the same people. There is one further distinction in property which needs to be understood. Property is a legal concept and the world of property is a world of rights and obligations. There are restrictive covenants and rights of way, planning permissions and compulsory purchase orders, tenancy agreements and schedules of dilapidation. The legal problems are not our concern but we might take note of D. R. Denham’s explanation of one of the basic features of the property market:

As it was in the beginning, so now. Land deals are transactions not in land but in rights in and over land…. Land is not cut up like linen cloth. More than one interest may exist in the same parcel of land. Picture a Neapolitan ice-cream, the horizontal layers — vanilla, strawberry and coffee. Peculiar to the owner of ‘vanilla’ property may be the right to occupation of the land; to the owner of ‘strawberry’ property the right to reserve rent from the ‘vanilla’ interest; and peculiar to the ‘coffee’ property the right to sanction or prohibit the development of the land. (Institute of Economic Affairs, Land in the Market — Hobart Paper 1964.)