Case 1

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they can never be granted in perpetuity.3 They can in principle be established for only a week, or, alternatively, for a very long period of time. Their duration only has an effect on the formalities required for their validity or their enforcement against third parties. As regards the duration of hereditary building leases and hereditary land leases, minimum time periods (for example, twenty-seven years in Belgium) are generally required for their validity. If these leases are terminated against the will of the parties before the minimum period has elapsed, this does not lead to reclassification of the lease to an ordinary land lease.4

Another self-evident similarity, at least between leases and usufructs, is that the same rules apply with regard to the gathering of fruit.5 Under both institutions, the tenant and the usufructuary are allowed to exploit the property by gathering both natural and civil fruits.

An important difference between the various time-limited institutions is the scope of the entitlements or ‘dismemberments of ownership’ under each institution. Although the owner allows the tenant to cultivate the land or to reside in a dwelling and, in the case of an agricultural lease, to reap its crops in exchange for rent, the landlord does not relinquish any of the constituents of his/her right of ownership. Thus, in principle, a lease leaves the owner’s real right in the property intact.6 The usufruct, on the other hand, reaches all the way through into the owner’s bundle of real entitlements and temporarily relegates two of them to someone else,7 though without thereby depriving the owner of his dominium, if only because the residual right of disposal is seen as constituting the core of Romanist ownership.8 Thus ususfructus replaces the original dominus with a nude owner and a usufructuary, the new owner being ‘nude’ because he has been stripped of the rights of use and of profits, leaving him/her only the legal title.9 However, paradoxically, since the legal rules relating to

3If granted in perpetuity, the transaction will be classified as a hereditary land lease.

4See Vanhove, ‘Note on the Decision of the Court of Cassation’, p. 679.

5See already Justinian’s Institutes 2.1.36.

6This differs from the communis opinio of Roman-Dutch writers of the seventeenth century that the holders of long-term leases acquired dominium utile in the property. See Bodenstein, ‘Huur van huizen’, p. 12.

7Feenstra, Romeinsrechtelijke grondslagen, 95 points out that during the feudal system the Roman texts on usufruct describing usufruct as a pars dominii were used to classify the right of the vassal as dominium utile. He indicates that this is different from the modern approach in civilian jurisdictions, which classify a usufruct as a limited real right.

8See Buckland, Roman Law, p. 273; Pugliese, ‘On Roman Usufruct’, p. 538.

9See Johnston, ‘Successive Rights’, p. 154.

personal servitudes are designed to preserve the rights of the nude owner to the greatest possible extent, we can safely conclude that the entitlements of a tenant in terms of a lease to the use and profits of the property are more extensive than that of a usufructuary. In the case of a hereditary building lease and a hereditary land lease, the holders do not only acquire the entitlements of use and enjoyment of the fruits but also the right to dispose of the property. They only differ from full ownership to the extent that the holders must continue to preserve the property in good condition, pay the rent charge on the property and may be subject to further restrictions as agreed in the constitutive instrument. These institutions thus result in an almost complete dismemberment of the entitlements of ownership,10 leaving only residual rights in the landowner, coupled with the right to collect the land charge. The right to collect the land charge is a real right that ‘runs with the land’.11 An owner will have recourse to these institutions only in the event of a lack of capital, subjecting the land to the arrangement in order to better preserve and improve its condition and productivity, and to derive a small income by way of rent. Therefore, they are mainly used by public authorities or private landowners with vast estates who cannot otherwise improve the land themselves.12 The main difference between the hereditary building right and the hereditary land lease is that the former is mostly concerned with the improvement of the land by the construction of buildings, while the latter also encompasses the improvement of the agricultural potential of the land.

A minor difference between these institutions is that a lease, a hereditary building lease and a hereditary land lease each involves the holder’s payment of a determinate sum of money in the form of a rent or rent charge, whereas usufruct, even if constituted by conveyance, by its nature does not require any money to change hands. Note, however, that with crop-sharing agricultural leases, the tenant can contractually arrange with the landlord to supply him/her with a fixed proportion of the harvest (colonia partiaria) instead of a monetary payment.

A major difference between a lease and other time-limited institutions is that while the civil law institution of lease has its origins in the

10The Roman-Dutch writer Grotius refers to emphyteusis as dominium utile in a gloss (Inleidinge, 2.38.5).

11See Rome, ‘An Elegy for Emphyteusis’, p. 2.

12See Johnston, ‘Emphyteusis: Perpetual Tenure’, p. 338.

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Roman law of obligations, and straddles both the law of obligations and the law of property in modern law,13 the other three civil law institutions stem from the Roman law of property and are still generally regulated by property rules. In Roman law, lease and the three property law institutions were discussed separately and there was no land law as such to unite these institutions.14 One important consequence is that although there are quite a number of, mainly statutory, default rules standardising the practical application of a lease, deviation of default rules and the imposition of new obligations in lease agreements are common in practice.15 This is not the case with the other time-limited institutions which are regulated by the rules of the property regime.

Another major difference between lease and usufruct is that while a lease splits profits concurrently between the landlord and the tenant, with the use and fruits to the tenant and rent (or a proportion of the crops in certain agricultural leases) to the landlord, usufruct splits the profits successively between the usufructuary and the nude owner – first exclusively to the usufructuary, and then returning it in its entirety to the nude owner. Usufruct effects, in a certain sense, a division in time but hardly in content, of a single ownership.16 Thus the position of the usufructuary differs from the position of the tenant, but also from that of the owner. The owner, whose property is subject to a usufruct, is a nude owner lacking the entitlements of the use and enjoyment of the fruits of the property until the termination of the usufruct. The position of the holder of a hereditary building or land lease is basically the same as that of the usufructuary, owing to the insignificance of the rent charge payable to the landowner.

The various institutions also differ as regards the types of social relationships in which they typically operate, and the kinds of economic concerns that they intend to address. Lease is commercially driven and usually entered into by strangers, while usufruct is usually set up in a husband’s will to provide for his widow without depriving his children of their inherited title.

13See Guerts, ‘Historical Development of Leases’, pp. 357 ff. for the hybrid character of lease at common law.

14See Robinson, Sources of Roman Law, p. 118: ‘Land was (in classical law) just one of the res mancipi; there were no special forms of conveyance for land, no special kinds of security over it, no special rules about succession to it.’

15See also Johnston, Roman Law in Context, p. 65 for the position in Roman law.

16See Nicholas, Roman Law, p. 145.

The obvious solution for the owner of agricultural or residential property who does not have the will or capital to exploit the property is to ensconce a tenant who has a financial or dwelling interest in the land or premises.17 Ultimately, both landlord and tenant are to gain from such an arrangement. The agricultural tenant can collect the produce from the land, while the landlord benefits in that the economic condition of his/her property will be preserved and he/she will derive a monetary benefit from the property. Likewise, the residential tenant enjoys the luxury of a roof over his/her head, while the landlord collects a commercial rent from the property.

By contrast, usufruct and the other personal servitudes initially have a purely alimentary objective, namely to provide a means of subsistence for a family member.18 These servitudes therefore have a social, as opposed to a strictly economic, target. They allow the holders to have the use of the property and to gather its natural and civil fruits for a set period lasting no longer than the holder’s lifetime, provided the holder does not alter the basic character of the property. The holder is in effect the present beneficiary, who, for the time being, is allowed to exercise specific entitlements which will be transferred back to the nude owner on expiry of his/her rights.

The institutions of the hereditary building lease and the hereditary land lease, again, were initially closely linked to the development of unimproved land. The aim of the State and other public authorities were to develop wide tracts of wasteland for agricultural use and for the provision of housing. The holders were awarded with almost all the entitlements of ownership, namely the right of use, the gathering of fruits and even the right to dispose of the building or land lease. These extensive rights were granted in order to encourage the holders to construct buildings on the land or to develop wasteland into viable farming units. That land development was the primary aim of these institutions is evidenced by the fact that the rent charge or canon levied on the holders was minimal and not a commercial rent as in the case of lease.

At this stage it is appropriate to ask to what extent the various ways in which the profits are split between the parties increase the productivity

17See Johnston, Roman Law in Context, p. 63 who remarks that much is to be said for letting property to someone with a financial interest in it and not to have it administered by an administrator.

18See Johnston, ‘Successive Rights’, p. 155.

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of the property. Under an agricultural lease, the tenant is obliged to exploit the property as the proverbial Roman bonus paterfamilias. In concrete terms, it means that the tenant must maintain the essential character of the property, only use it in ways authorised by the landlord, and return it in its original condition except for ordinary wear and tear. From this it is clear that the tenant is not allowed to develop the property to its full economic potential. The usufructuary is even more straitjacketed in his bid to generate the maximum profits. He/she is obliged, and can indeed be compelled, to exploit the property only in ways that have already been established. He/she is not only forbidden to use the property for commercial purposes (except if it was already so used) but, additionally, he/she cannot use it for any new purpose at all.19 The underlying principle forbidding new forms of income is to preserve the property’s agricultural productivity since other sources of revenue are perceived to be of only temporary benefit.20 In principle, the usufructuary is moreover not allowed to improve the property, except in cases where it can easily be restored to its former condition.21 Eventually, the usufructuary has to return the property at the expiry of the usufruct without impairment of its substance. This lack of interest in property development indicates that the aim of the institution of usufruct is not to allow the holder to develop the land to its full commercial or even agricultural potential.22 By contrast, the explicit aim of the institutions of hereditary building lease and hereditary land lease is to develop unimproved land by the erection of buildings and the improvement of the agricultural productivity of the land. These institutions are thus the most suitable mechanisms for achieving land development.

A similarity between the institutions of lease and usufruct is that the parties involved in these institutions are treated unequally. Leases generally, though not always, exploit the tenant, while usufruct is carefully designed to protect the interests of the nude owner. The earliest agricultural tenants in Roman law were destitute persons who attached themselves to rich aristocrats (patresfamilias) for a living.23 Although their difficulty in paying rent was relieved by the fact

19See in general ibid. 154–5, 166–7; Johnston, Roman Law in Context, p. 67.

20See Kehoe, Roman Agrarian Economy, p. 119.

21See in general Johnston, ‘Successive Rights’, p. 154.

22See Crook, Law and Life in Rome, pp. 152, 161.

23See also Guerts, ‘Historical Development’, p. 357 who states that at common law the tenant was originally regarded as the servant of the landlord. See, however, Johnston, Roman Law in Context, p. 62 who states that this did not apply to urban leases in Roman

that they could pay with a proportion of the produce of the land,24 it caused landlords to push them to produce as good a crop as possible, thus prolonging their servile relationship with the landlord.25 This could perhaps explain why tenants had no security of tenure and why they neither had a real right nor legal possession of the land but only detention.26 Tenants were only given a remedy against the landlord for breaching his duty to provide them with undisturbed possession, and not directly against a third party who interfered with his occupation. If the owner had sold the property and the new owner failed to respect the lease, the tenant could not insist on continuing in occupation but could only sue the original landlord under their original contract.27 Furthermore, in the event that the tenant did not wish to leave the property, the new owner was entitled to impose new and less favourable lease terms.28 Because landlords and tenants were most often not equals, modern law regulated their relationship to prevent the more powerful party from abusing his position. We have seen that most of the modern jurisdictions have come to the aid of the tenant by granting him a possessory remedy against disturbance of his possession and by reversing the maxim ‘sale breaks hire’ to grant the tenant the right to stay on the land after the property has been transferred to a bona Þde purchaser. Furthermore, most of the modern European jurisdictions have adopted tenant protection measures to make it more difficult to evict tenants who have no alternative accommodation.

Although the usufructuary was not recognised as the legal possessor of the property in Roman law,29 he was accorded a real right. But the

law. There existed a substantial urban rental sector and the tenants were members of relatively high social classes who regularly hired residential premises for several years and typically paid their rent in lump sums at yearly or half-yearly intervals.

24According to Zimmermann, Obligations, p. 356, this was designed in Roman law to keep agricultural tenants (coloni) on the soil and thus to ensure, in the public interest, that the land continued to be cultivated.

25According to Zimmermann, Obligations, p. 353, the payment of rent in the form of a proportion of the harvest further worsened the position of these early agricultural tenants because slaves were appointed to supervise the tenants’ cultivation of the land. This reduced the position of these tenants to that of tied serfs in late Roman law and caused them to run away or join a band of robbers.

26See Johnston, Roman Law in Context, p. 62 who states that it was held until recently that ‘the law of lease was a paradigm of law forged in the interest of the landowning classes’.

27See Johnston, Roman Law in Context, p. 66.

28See Kehoe, Roman Agrarian Economy, p. 185.

29Watson, Roman Private Law, p. 90 plausibly suggests that the reason why usufructuaries were not accorded legal possession in Roman law related to the social context of

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inherent conflict of interest between the usufructuary with a temporary interest in the property and the nude owner who will become the unrestricted owner of the property when the usufruct expires30 was already carefully regulated in Roman law to prevent the usufructuary from substantially reducing the value of the property before it was returned to the nude owner. This is clear from the manner in which the usufructuary was restricted in his use and exploitation of the property as discussed above.

usufruct. The typical relationship between usufructuary and owner was that of mother and son, and woman had a very weak position in the eyes of the law.

30 See Johnston, Roman Law in Context, p. 67.