Real Property Characteristics
Understanding what real property is, how it differs from personal property, and the rights that come with land ownership is foundational to nearly every transaction. This chapter covers the physical and economic traits of land, the bundle of rights, and the fixtures that determine what conveys with a sale.
Land, Real Estate, and Real Property
Land includes the surface, everything permanently attached by nature, the subsurface below, and the airspace above. Real estate adds improvements made by people, such as buildings and fences. Real property extends further to include the bundle of legal rights that come with ownership: possession, control, enjoyment, exclusion, and disposition. Personal property, by contrast, is movable and not permanently affixed to the land.
Physical and Economic Characteristics
Land has three physical characteristics: immobility (it cannot be moved), indestructibility (it is durable and permanent), and uniqueness or nonhomogeneity (no two parcels are identical). It also has four economic characteristics: scarcity, improvements, permanence of investment, and situs, which is area or location preference. Situs is often the strongest force driving value, which is why the same building is worth different amounts in different locations.
Fixtures and Appurtenances
A fixture is personal property that has become real property by being permanently attached, and it normally transfers with the sale. Courts weigh the method of attachment, adaptability to the property, and the intent of the party who installed it. Trade fixtures installed by a commercial tenant for business use remain personal property and may be removed before the lease ends. Appurtenances, such as easements and water rights, run with the land and pass to the new owner.