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I have a polygon layer with a 'lot' field, and a points layer.
How can I use python to select the points by location (to find what points are contained in what polygons) and assign the value in the 'lot' field from the polygon layer to the point that is contained in the relevant polygon feature?
You could do this by simply using the Intersect (Analysis) tool interactively, but if you want to use Python then a syntax something like this should work ...
arcpy.Intersect_analysis ["point_layer", "poly_layer"], out_feature_class, "ALL", "", "")
Either way if the poly_layer has a field called Lot, then that should be present and populated in the output feature class (also points).