Situs
Encyclopedia
In law
, the situs (Latin
for position or site) of property
is where the property is treated as being located for legal
purposes. This may be important when determining which laws apply to the property, since the situs of an object determines the lex situs
, that is, the law applicable in the jurisdiction where the object is located, which may differ from the lex fori
, the law applicable in the jurisdiction where a legal action is brought. For example, real estate
in England
is subject to English law
, real estate in Scotland
is subject to Scottish law, and real estate in France
is subject to French law.
It can be essential to determine the situs of an object, and the lex situs, because there are substantial differences between the laws in different jurisdictions governing, for example: whether property has been transferred effectively; what tax
es apply (such as inheritance tax
, estate tax, wealth tax
, income tax
and capital gains tax
); and whether rules of intestacy
or forced heirship
apply.
The rules for determining situs vary between jurisdictions and can depend on the context. The English common law rules, which apply in most common law jurisdictions, are in outline as follows:
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
, the situs (Latin
Latin
Latin is an Italic language originally spoken in Latium and Ancient Rome. It, along with most European languages, is a descendant of the ancient Proto-Indo-European language. Although it is considered a dead language, a number of scholars and members of the Christian clergy speak it fluently, and...
for position or site) of property
Property
Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...
is where the property is treated as being located for legal
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
purposes. This may be important when determining which laws apply to the property, since the situs of an object determines the lex situs
Lex situs
The term lex situs refers to the law of the place in which property is situated for the purposes of the conflict of laws. For example, property may subject to tax pursuant to the law of the place of the property or by virtue of the domicile of its owner...
, that is, the law applicable in the jurisdiction where the object is located, which may differ from the lex fori
Lex fori
Lex fori is a legal term used in the conflict of laws used to refer to the laws of the jurisdiction in which a legal action is brought...
, the law applicable in the jurisdiction where a legal action is brought. For example, real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
in England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
is subject to English law
English law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
, real estate in Scotland
Scotland
Scotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...
is subject to Scottish law, and real estate in France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
is subject to French law.
It can be essential to determine the situs of an object, and the lex situs, because there are substantial differences between the laws in different jurisdictions governing, for example: whether property has been transferred effectively; what tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
es apply (such as inheritance tax
Inheritance tax
An inheritance tax or estate tax is a levy paid by a person who inherits money or property or a tax on the estate of a person who has died...
, estate tax, wealth tax
Wealth tax
A wealth tax is generally conceived of as a levy based on the aggregate value of all household holdings actually accumulated as purchasing power stock , including owner-occupied housing; cash, bank deposits, money funds, and savings in insurance and pension plans; investment in real estate and...
, income tax
Income tax
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
and capital gains tax
Capital gains tax
A capital gains tax is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property...
); and whether rules of intestacy
Intestacy
Intestacy is the condition of the estate of a person who dies owning property greater than the sum of their enforceable debts and funeral expenses without having made a valid will or other binding declaration; alternatively where such a will or declaration has been made, but only applies to part of...
or forced heirship
Forced heirship
Forced heirship is a form of partible inheritance whereby a deceased's estate is separated into an indefeasible portion, the forced estate, passing to those the deceased is survived by, and a discretionary portion, or free estate, to be freely disposed of by will...
apply.
The rules for determining situs vary between jurisdictions and can depend on the context. The English common law rules, which apply in most common law jurisdictions, are in outline as follows:
- the situs of real estateReal estateIn general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
(land) is where the land is located - the situs of bearer instrumentBearer instrumentA bearer instrument is a document that indicates that the owner of the document has title to property, such as shares or bonds. Bearer instruments differ from normal registered instruments, in that no records are kept of who owns the underlying property, or of the transactions involving transfer of...
s and chattels (tangible moveable property) is where the instrument or chattel is located from time to time - the situs of registered instrumentRegistered instrumentA registered instrument is a form of property, such as shares or bonds, where records are kept of who owns the underlying property, or of the transactions involving transfer of ownership...
s is where the register is held - the situs of shares is where the share register is held (in the case of registered shares) or where the bearer share certificate is located (in the case of bearer shares).
- the situs of debtDebtA debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
s is where the debtorDebtorA debtor is an entity that owes a debt to someone else. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor...
resides (since that is generally where legal action can be taken to enforce the debt) - the situs of intangiblesIntangiblesThe term intangibles is most commonly used to describe things that are recognized but not easily quantified; a common example are economic intangibles which describes something not easily quantified within a given theory of economics...
property, including intellectual propertyIntellectual propertyIntellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
such as copyrightCopyrightCopyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time...
, trademarkTrademarkA trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...
s and patentPatentA patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
s but also goodwillGoodwill (accounting)Goodwill is an accounting concept meaning the value of an entity over and above the value of its assets. The term was originally used in accounting to express the intangible but quantifiable "prudent value" of an ongoing business beyond its assets, resulting perhaps because the reputation the firm...
, is where the property is registered, or, if not registered, where the rights to the property can be enforced - within territorial watersTerritorial watersTerritorial waters, or a territorial sea, as defined by the 1982 United Nations Convention on the Law of the Sea, is a belt of coastal waters extending at most from the baseline of a coastal state...
, the situs of a shipShipSince the end of the age of sail a ship has been any large buoyant marine vessel. Ships are generally distinguished from boats based on size and cargo or passenger capacity. Ships are used on lakes, seas, and rivers for a variety of activities, such as the transport of people or goods, fishing,...
is where it is actually located; on the high seas, a ship is treated as situated at its port of registry