The thing is, if you can have a restrictive covenant with land, why can’t you have a restrictive covenant with non-land property?
Why not… Banks put leins on cars every single day. Its nothing more than putting something owned up as collateral. A reassurance that you will abide by your word. You are free to do as you please.. you can pay us back or not. But if you decide not to pay us back then, as you agreed in the contract, ownership of your car is transfered to the bank.
I see nothing to prevent restrictive covenants with people, even. What this means is that restrictive covenants allow for slavery in spite of the fact that people are self-owners.
The difference is that the bank can separate you from your car. We cant separate you from your body. So I dont see how this would lead to slavery.
Restrictive covenants neatly sidestep the question of “Who owns X?” because, with them, it’s not necessary to own X (at least legally speaking) in order to impose restrictions on X.
No ownership is clear as a bell. Leases, for example, transfer rights to property without transfering ownership. The owners rights to his property have been contractually restricted. This would be the similar to a covenant. I own my home but I have contractually given up the right to do certain thing with or to the property.
Slavery (defined as “owning other human beings”) is typically considered to be logically impossible by libertarians because one cannot own what is already owned by someone else; since everyone owns himself (of course, this is a premise), no one else can own him.
A restrictive covenant, affirmative covenant, or combination thereof could (at least in theory) be constructed to render a person effectively a slave without being considered owned by his “master”. That’s what I meant by “[sidestepping] the question of ‘Who owns X?’”
And that may be an attractive feature of a covenant community. They could advertise “Come live in our Community. The Community owns all the housing units, and tenants are just renters, so if anyone starts any trouble, we can easily evict them and restore tranquility.” Since the community has a brand name to look after, or else risks being unable to attract citizen/customers, it would have far more incentive to strictly enforce the covenants than individual owners, and potential customers would recognize that situation.
There are some who would argue that with a restrictive covenant, there is no transfer of ownership, in other words, the seller still owns the house.
Those same people could also argue that if you have a lein on your car or a mortgage on your house that the bank owns them. But they would be wrong, because that is not the case. You havent given up ownership. All you have done is promised to do something and then have pledged your property as collateral as a guarantee that you will do as you have promised. You have agreed that if you do not do as agreed that the title to the property will be transfered at the point of breach or default… not at the signing of the contract.
Read your post a second time and realized I did not address what you were saying.
I dont beleive that a restrictive covenant would be a contract between the buyer and seller. It would be between the buyer and the HOA. A condition of the sale would be that the new owner would have to sign the contract with the HOA. And the seller would require the contract between the buyer and HOA because the contract he signed with the HOA originally will have stipulations the anyone he sells the home to would be required to sign a contract binding them to the HOA.
So in essence there would be 3 contracts dictating terms. The sellers original contract with the HOA, the contract of sale between the buyer and seller, and a new contract between the buyer and HOA.
Here your reasoning is consistent. By this logic, the bank owns the car or house, and the borrower has mere possession of the said things.
Maybe the word “ownership” is too vague. Maybe a better descriptor would be “superior claim” to said property, in other words, the bank (the lien holder) has a superior claim to the automobile or the house, in the sense the bank can separate or evict the possessor upon certain conditions.
Liens can be considered a type of title, in which the lien holder is said to have a superior claim, i.e. superior title, over that of the possessor. Liens can come into existence at the beginning of the contract.
In the event of a contractual breach, the inferior title of the possessor can either be extinguished or assumed by the lien holder.
I’m not a big fan of HOAs. When we bought our house a couple years ago it didn’t really exist. After a few months the developer turned over the community to the HOA, and things changed. They had an election for 4 positions on the board and I actually ran. Since then they haven’t had any other election, but everyone has changed - they just selected new people to be on the board without a vote. They’re busybodies like you wouldn’t believe. They regulate the color of one’s watering hose and say that one’s trash can can’t be visible from the road - which means some people are told to keep it in their garage. Buncha morons I say. What’s frustrating is that’s it is all done in the name of increasing home values - as if they have the slightest clue how to do that.
Right, or some other remedy is applied. I don’t think transfer of ownership is the only possible remedy.
Do you think people can legitimately put up their own lives and/or the lives of others (such as their children) as collateral?
Could the death penalty be seen as separating someone from his body?
I understand. To me, the case is clear-cut with liens and leases. But with restrictive and affirmative covenants, it’s not clear to me. If someone wants to give up ownership of property, why would they want to (in effect) keep some kind of control over it?
Actually, come to think of it, why can’t ownership be “clear as a bell”? Obviously ownership is not the same as mere possession. How can there be more than one owner of something, logically speaking?
To prevent fraud, it would have to be made clear that the real estate itself is not for sale, right? So no one will be under the delusion that they are actually buying a house?
Also, why would anyone want to buy the residual value of the lease? What does that do for them?
Normally a restrictive covenant is between a buyer and seller. By what is contended by the argument, “the seller still owns the house”, is that the “seller” still has a superior claim over that of the “buyer”, and would be demonstrated within the title document itself.
Then Autolykos rightfully asks, what exactly is bought and sold? My response is the residual value of the lease.
In other words, the HOA already has a superior claim, which in this case, the contract would simply acknowledge a pre-existing fact.
But the HOA already has a superior claim, so the “seller” cannot “sell” to anybody he wants, without the permission of the HOA.
The sellers original contract with the HOA
The HOA has a superior claim over the “seller’s” property.
The contract of sale between the buyer and seller
The “buyer” and “seller” is merely transferring a lease arrangement.
A new contract between the buyer and HOA.
HOA already has superior claim to the property. The “buyer” contracts a lease agreement with the HOA.
Right, or some other remedy is applied. I don’t think transfer of ownership is the only possible remedy.
Right, there could be other remedies, what it may be is outlined in the contract.
Do you think people can legitimately put up their own lives and/or the lives of others (such as their children) as collateral?
No. Your mind and body are insepreable. Therefore you cannot put your body up as collateral without putting your mind up as well. And currently there is not way to take possession of your mind. So putting up your mind and body would be impossible… Or something like that. Maybe…
Could the death penalty be seen as separating someone from his body?
I think killing someone is well, killing someone. Very different from taking possession of a house or car.
But with restrictive and affirmative covenants, it’s not clear to me. If someone wants to give up ownership of property, why would they want to (in effect) keep some kind of control over it?
In the case of an HOA the seller would not be keeping partial control of the property. The seller as a condition of his contract with the HOA would require the buyer to sign a contract with the HOA. So the seller would not be keeping any partial control over the property.
Obviously ownership is not the same as mere possession. How can there be more than one owner of something, logically speaking?
Give me an example of two people owning the same thing. I dont think its possible and I dont see where a covenant divides ownership. It would only set up parameters of use. The contract with the HOA would have nothing to do with ownership.
That is correct. HOA or restrictive covenants maintains an illusion of ownership, or quasi-ownership.
That is a very good question, and I may not have a satisfactory answer. Buying into a HOA can be equivalent to leasing for an infinite period of time, and paying 100% up front all lease payments.
If you think about it, leasing a property beyond the lifetime of the tenant is a good deal for the Landlord, and a bad deal for the Tenant. To resolve this problem, the Tenant could sell the remaining residual value of the lease to somebody else, who would then assume the lease.
If that is the case, then an infinite lease can be considered a quasi-asset that can be bought and sold on the market.
Here your reasoning is consistent. By this logic, the bank owns the car or house, and the borrower has mere possession of the said things.
This is not the case. When a bank takes a mortgage or lein they do not take ownership. We have zero claim on the property untill the contract is breached.
Maybe the word “ownership” is too vague. Maybe a better descriptor would be “superior claim” to said property, in other words, the bank (the lien holder) has a superior claim to the automobile or the house, in the sense the bank can separate or evict the possessor upon certain conditions.
You can use any words you want. The fact of the matter is a bank has zero claim to property when it takes interest in a property. Once certain conditions are met then the bank has a claim. Not before.
Liens can be considered a type of title, in which the lien holder is said to have a superior claim, i.e. superior title, over that of the possessor. Liens can come into existence at the beginning of the contract.
Liens are not a type of title. They are liens that do nothing more that attach the title of a peice of property to a contract. They are 100% irrelevent untill such time the title holder is in breach of that contract. You can have superior and subordinate leins, but ownership of a property is never in doubt.
In the event of a contractual breach, the inferior title of the possessor can either be extinguished or assumed by the lien holder.
There is no inferior title… maybe claim is the word you are looking for. In the event of a breach of contract the banks claim become superior to the owners claim. But prior to that breach the owners claim to the title is the superior claim.
Restrictive covenants are a violation of property rights for the same reason that intellectual property is a violation of copyright. If you own property, that necessarily means that you have the right to do whatever you wish with it. The proper name for what is called a “restrictive covenant” is entail. Entail was a feudal restriction which prohibited the owner of a plot of land from selling any portion of his property, splitting it up in his will (according to primogeniture, he had to give it to his oldest son), or from giving it away to anybody.
Libertarianism is NOT feudalism. In a libertarian society, people have the absolute right to do whatever they wish with their own property and all provisions in a sale contract violating the property rights of the owner are necessarily null and void. Feudal restrictions on private property rights such as primogeniture, entail, and restrictive covenants are unenforceable in a libertarian society because they are violations of private property rights.
Likewise, “Home Owners Associations” are nothing more than a euphemism for the State and thus any society with them is no longer a stateless society.
If you own property, that necessarily means that you have the right to do whatever you wish with it.
Exactly, and if I wish to sign a contract to limit what I can do on my own property, in exchange for the ability to limit what is done on my neighbors property, are you going to stop me? By you own claim it is my right to do so.
And for the record feudalism is not based on contract law. HOAs, mortgages, leases, leins are. Feudalism is based on force.
Your phrases “zero claim to property” and “when it takes interest in a property” in the same sentence is an interesting juxtaposition.
Do you mean “it takes interest in a property” at the very beginning?
From what I understand, you’re saying that a bank only has a claim after a particular trigger event.
The Bank evicts the Mortgager upon non-payment of mortgage
The Landlord evicts the Tenant upon non-payment of rent
From your reasoning, the Landlord has no claim on the property in Tenant possession, until the Tenant breaches the contract?
For a Bank to place a restriction on a Mortgager, the Bank must have some claim in place to prevent the Mortgager from performing a prohibitive action on the property (e.g., bulldoze his own house), else the Bank can only make a claim after the house is destroyed.
But here you’re saying, before the contract breach, the “owners claim to the title is the superior claim,” but afterward the “banks claim become superior.” Maybe you meant “zero claim”, so . . . which is it?
Exactly, and if I wish to sign a contract to limit what I can do on my own property, in exchange for the ability to limit what is done on my neighbors property, are you going to stop me? By you own claim it is my right to do so.
And for the record feudalism is not based on contract law. HOAs, mortgages, leases, leins are. Feudalism is based on force.
You have the right to sign such a contract, but it is not enforceable. Obviously, I can’t stop you from voluntarily choosing to follow such imaginary “limits” on your property rights, but I do have the right to stop you from initiating force on your neighbor when he wants to use his property as he wishes. Yes, Feudalism was based on contracts. In the Feudal societies, the Lord would make a contract with a Vassal, in which he granted some of his property (a “Fief”) to the Vassal and agreed to protect the Vassal. The Vassal agreed to obey his Lord and to serve in his Lord’s protection force.
Mortgages are legitimate in a libertarian society, although they would not be as common as they are at present, since banks would not be lending counterfeit money. If you take out a Mortgage, you owe the bank a specific amount of money and your property is collateral if you fail to pay the loan. A Lien is nothing more than a name for collateral in a loan. In the case of a lease, you are borrowing somebody else’s property and paying them for the right to use their property.
However, a Home Owners Association is clearly different. A Home Owners Association is a State that tells people what they can or cannot do on their own property (it is basically a “private” zoning board). If you consider a Home Owner’s Association to be legitimate, then you are basically justifying your local government zoning board on libertarian grounds! When a statist points out to you that people in the area where you live “voluntarily” agreed to obey the local governmeny by living there, how are you going to credibly argue to the contrary (since governments are “democratic” in the USA, most people in an area presumably support the actions of “their” government) when you are defending the right of people to voluntarily grant to other people the right to restrict their use of their own property? If a Home Owners Association is inherently a violation of property rights and therefore contrary to libertarian principles, then the local zoning board is illegitimate whether or not people where you live support it.
Your phrases “zero claim to property” and “when it takes interest in a property” in the same sentence is an interesting juxtaposition.
Do you mean “it takes interest in a property” at the very beginning?
An interest in a property is not the same thing as a claim to ownership of a property. Think of it as a potential claim to ownership. And yes the interest in the property begins with the signing of the contract.
From what I understand, your saying that a bank only has a claim after a particular trigger event.
The Bank evicts the Mortgager upon non-payment of mortgage
The Landlord evicts the Tenant upon non-payment of rent
From your reasoning, the Landlord has no claim on the property in Tenant possession, until the Tenant breaches the contract?
The bank is not an owner.. it holds no title to the property or claim to the property. The mortgager is an owner who has put his ownership at risk by using it as collateral.
A landlord is an owner who has given up possession and use of a property, but has the potential to regain both. A Tenant is not an owner who has paid for possession and use of a property, but not ownership.
So a landlord and bank are not the same. And a mortgagee and tenant are not the same. The comparison is false.
For a Bank to place a restriction on a Mortgager, the Bank must have some claim in place to prevent the Mortgager from performing a prohibitive action on the property
Yes and that would be a contract with the Mortgager.
(e.g., bulldoze his own house), else the Bank can only make a claim after the house is destroyed.
You are absolutely right the bank cannot take possession of a peice of property just becaue he threatens to buldoze the house down. We could not evict him just because he has a bulldozer in his front yard. Our claim to the property can only be realized untill such a breach of contract occurs. And in a case such as this we would take possession of the land the house is on and depending on what is in the contract could possiblly pursue other legal action against him.