Real property, personal property and fixtures
Everything a person can own is either real property or personal property. The difference matters in almost every sale, because real property passes with the land when it is sold and personal property does not, unless the contract says otherwise.
Real property
Real property is the land plus the permanent features above and below it, such as buildings, trees and mineral deposits. The key idea is permanence: if something is fixed to the land, it is generally part of the real property.
Personal property (also called personalty or chattels) is everything else: items you can pick up and move, like furniture, cars and a potted plant. Personal property is usually transferred with a bill of sale rather than a deed.
Fixtures
A fixture is an item that started out as personal property but became part of the real property by being attached to it. A water heater sitting in a store is personal property. Once it is plumbed into a house, it is a fixture and normally goes with the house.
When it is not obvious, courts look at the facts. The factors to know are:
| Factor | The question it asks |
|---|---|
| Attachment (annexation) | How firmly is the item attached? Would removing it damage the property? |
| Adaptation | Was the item made or fitted for this particular property, like custom shutters or built-in shelves? |
| Intent | Did the person who installed it intend it to stay? Intent is usually judged from the other facts. |
A written agreement between the parties settles the question. If the sales contract says the seller keeps the dining room chandelier, the seller keeps it, even though it is wired in. That is why a careful agent makes sure the contract names any item that might be disputed.
Trade fixtures
A trade fixture is an item a tenant installs to run a business, such as shelving in a store or an oven in a restaurant. Trade fixtures stay the tenant's personal property, and the tenant may remove them when the lease ends. The tenant should repair any damage that removal causes.
Appurtenances
An appurtenance is a right or item that belongs to the property and passes with it when it is sold, even though the deed may not list it. An easement that benefits a parcel (for example, a right to cross a neighbor's land to reach the road) is a common example. It transfers automatically with the land it benefits.
The bundle of rights
Owning real property means holding a set of legal rights, often pictured as a bundle of sticks. The rights usually listed are:
- Possession: the right to occupy the property.
- Control: the right to use the property, within the law.
- Enjoyment: the right to quiet use without interference.
- Exclusion: the right to keep others out.
- Disposition: the right to sell, give away, lease, mortgage or leave the property by will.
An owner can hand over some sticks and keep the rest. A landlord who leases a home gives the tenant possession for the lease term but keeps ownership. A mortgage uses the property as security without giving up possession. Government powers, such as taxation and zoning, also limit the bundle; see the units on taxes (u18) and planning and zoning (u19).