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I'm trying to understand the "legal fiction" wherein we declare any chometz we have as ownerless like the dust of the earth. Is this halachically acceptable? How can a person declare something in his possession, possibly locked up in his house to be ownerless?

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It does work drorayta but rabbis made us get rid of it / sell it lest you see it and eat it –  Double AA Mar 24 '13 at 2:37
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This is not a legal fiction. If someone were to take the chametz that was declared ownerless, the previous owner would have no claim on it. This is true of any item that is declared ownerless. –  Fred Mar 24 '13 at 4:16
    
DoubleAA, @Fred, expand on those and you've got two good answers. –  msh210 Mar 24 '13 at 5:39
    
For my comment see the first tosfot in pesschim –  Double AA Mar 24 '13 at 12:26
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2 Answers

First if it is a "legal fiction" then you are in fact transgressing biblical and Rabbinical commandments regarding possessing Hametz over the course of Pesach.

First you are referring to the Bitul Hametz that we all recite. However it is important to note that the formula of that specifically says,

"Any leavened food or leavening in my possession that I have not seen and have not destroyed is hereby considered null and and like the dust of the earth."(Yalkut Yosef 344:3)

It therefore does not cover any Hametz that you have seen, know full well where it is, and have no intention of destroying.

Now regarding deciding to truly make your Hametz ownerless many poskim(halakhic decisors) say that you cannot reclaim it after Pesach(as that would cast doubt upon the initial declaration). The Yalkut Yosef however brings a slightly more lenient approach and says: In practice, if there are witnesses that the owner sincerely declared his Hametz as hefker(ownerless) and it is clear that he did not do this as a way to sidestep the halakha requiring him to destroy his hametz, he may then reclaim the Hametz after Pesach if it would cause him a significant loss otherwise. It is best, in such a case, that after reclaiming the Hametz he mix it with other Hametz[that he purchased after Peasach] so that the reclaimed Hametz is a minority of the mixture and unrecognizable in the mixture. (Yalkut Yosef 448:4)

Likewise you seem to believe that the sale of Hametz is also a legal fiction. In truth for many years it was and many many major halakhic authorities spoke out against the practice. Even today there are many people who do not rely upon the sale of Hametz. However, for those that do, they have what to rely upon so long as the sale is not a legal fiction, either to them or to the one buying the Hametz. Here is an article that goes in depth in to the various halakhot that are involved in sales of hametz by any reliable agent of sale today. By Rabbi Peretz Moncharsh who's bio can be found here.

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Why is a legal fiction a problem? A legal fiction is still legal. –  Double AA Mar 24 '13 at 20:17
    
@DoubleAA let's define(from Britanica) "legal fiction, a rule assuming as true something that is clearly false." So if we are saying that a sale took place, when in fact no sale took place, that doesn't work in this case(which is why so many Gedolim used to speak against selling Chametz). In this case to get around the issur of owning Hametz on Pesah, you must either effect a true sale, or truly make it ownerless. You cannot do so simply on a fictional level. –  Rabbi Michael Tzadok Mar 24 '13 at 20:45
    
Its clearly not true that the non Jew will come take everyones chametz and pay full price for it all. But we take it as true. Hence legal fiction –  Double AA Mar 24 '13 at 21:06
    
@DoubleAA Who says he has to pay full price? He has to pay the agreed to price. Whether he takes it or not(one Rabbi in Israel a year or two back arranged for him to do so) is at his discretion. However the sale must be an actual and halakhically valid sale. Hence one should not sell pots and pans, or their home. –  Rabbi Michael Tzadok Mar 25 '13 at 5:16
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The morning bitul covers also chametz we do know about! –  msh210 Mar 28 '13 at 20:00
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When making something ownerless it is just that ownerless. In Halacha, to take possession of something you must pick it up or otherwise possess it. If you were to move something that has chametz, you would be regaining your ownership of it. If it was sold, you wouldn't be since it has a new owner already.

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1. Why not hide it to prevent moving (which you have to do anyways). 2. Acquisitions require intent (if I bump into your car and nudge it, I don't aquire it) 3. Meshicha could be used to aquire from another. –  Shmuel Brin Mar 25 '13 at 17:23
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