In normal usage, the words possession and property are often used as synonyms. In the legal context, there are some major differences between the two terms. In this article you will find out exactly what the terms mean and what the difference is according to the German Civil Code (BGB).
We explain to you what the differences between possession and property are and explain what this also means in your private life.
In the current legal texts and the following article, most terms are not gendered for reasons of readability, but of course all genders are meant.
Property – Definition
Ownership is the legal dominion over a thing.
The owner of a thing is the person who owns a movable or immovable thing. The main regulations on ownership can be found in §§ 903-924 BGB. You can also share ownership of something with others.
According to § 903 BGB, you can do anything with your property that does not contradict the generally applicable laws and does not harm others. This means that the property may be sold, destroyed, given away or rented out.
The state may only take away a person’s property in exceptional cases, e.g. For example, Article 14 of the Basic Law states that property may only be taken away if it helps the general public. This is referred to as expropriation. Ownership brings not only rights, but also obligations. For example, if you buy a pet, you have an obligation to take care of it.
property acquisition
Ownership of movable property (e.g. a car) is acquired upon agreement and delivery of the property. The settlement can be an effective purchase. The handover of the thing does not always have to take place directly, but there must only be the possibility to get to the thing directly. In the case of immovable property (e.g. real estate), ownership is acquired through the so-called conveyance. Both parties, i.e. buyer and seller, must be present and the transfer of ownership is entered in the land register by a notary.
Anna won the lottery and bought a house with her winnings. After the purchase contract has been properly concluded and a notary has entered the purchase in the land register, she is now the owner of the house. She can now rearrange it and use it as she pleases.
Possession – definition
Possession is actual dominion over a thing.
The owner of a thing is the person who can actually exercise control over the movable or immovable thing at the moment (§ 854 BGB). The main regulations on ownership can be found in §§ 854 to 872 BGB. You lose possession of a thing when you relinquish actual control of a thing. You can only use your property to the extent that the owner dictates. Normally you cannot resell your property. Exceptions are, for example, if it is stipulated in a rental agreement that the apartment can be sublet at any time.
When owning an item, it doesn’t matter how you get it. Obtaining ownership is a real act. This means that the object must actually be handed over. A thief can also gain possession of an object. The decisive factor in possession is therefore only the actual property and not the legality. The thief is then in possession of the thing, but not the owner, and the rightful owner is always entitled to hand over the thing. The thief has the wrongful possession of the thing, while a tenant would have the rightful possession of the thing.
Anna doesn’t live in the house herself because she already lives in a nice condominium and decides to rent the house to Lukas. She still owns the house. Lukas is now the owner of the house. Anna allows Lukas to live in the house and make small changes. However, he may not carry out any major conversion work.
Indirect possession and direct possession
The direct possessor has direct possession of a thing. That means he has direct control over something. According to § 868 BGB, all direct owners are those who only have possession of an item for a certain period of time. Examples would be tenants or leaseholders.
The position of the indirect owner is somewhat more complicated. According to Section 854 of the German Civil Code, the indirect possessor only has indirect control over a thing and has the material control carried out by a third party. The indirect owner does not have to be the owner at the same time. Examples of this are landlords or lessors.
The indirect owner must hand over the thing to the direct owner.
In our example above, Anna is both the owner and the indirect owner of the house. The lease makes Lukas the immediate owner of the house.
Another example: if a truck driver gets a truck from his company to carry out his work, the driver becomes the indirect owner and the company continues to be the direct owner.
difference between possession and ownership
As mentioned before, both terms are often confused or used incorrectly in normal usage. In everyday life, people often talk about the homeowner, even though they mean the homeowner. In general, ownership and possession can be distinguished as follows: ownership is a fact and ownership is the right to an object. As a rule, the owner has the right to hand over the thing to the owner (§ 985 BGB).
Differences in ownership and possession
Property
possession
- right about a thing
- Full power over the matter
- Right to Resell
- Actual dominion over a thing
- Limited power over a thing
- No right to resell
If you own something and actually own it, you are both the owner and possessor of the thing.
At the beginning of our example, Anna was both the owner and owner of the house. By renting it to Lukas, Anna has transferred her direct ownership to Lukas. He is now the direct owner of the house. Anna is the owner and the indirect owner of the house.
The following addition is often found in sales contracts:
«The goods remain the property of…»
This is a so-called retention of title. In this way, the seller ensures that he retains ownership of the item until the purchase price has been paid in full. The buyer is therefore only the owner of the item and not the owner until payment is made.
Possession and property – the most important things at a glance
- Ownership describes the legal dominion over a thing.
- Ownership is usually acquired by purchasing and handing over an item.
- Possession describes the actual material dominion over a thing.
- Immediate possession is direct possession of a thing.
- Indirect possession is indirect possession of a thing.
- One can also be the owner and proprietor of something at the same time.