Real property, often simply referred to as “real estate,” encompasses land and anything permanently attached to it, both naturally and artificially. It is distinct from personal property, which is moveable and not permanently affixed to a particular location.
Components of real property include:
- Land: The ground itself, including the air above and the space below the surface (to a reasonable depth).
- Improvements to the Land (Artificial Attachments): This includes structures like buildings, homes, fences, and roads. Other examples might be swimming pools, barns, or sheds.
- Natural Attachments: These are things that are a part of the land and are produced by nature, like trees, minerals, water, and crops that haven’t been harvested.
- Appurtenances: These are rights and privileges associated with the land. Common examples include air rights, mineral rights, and easements.
In legal terms, real property can be defined by its immobility – it cannot be moved from one location to another (as opposed to personal property, like a car or a piece of furniture).
Real property is significant for several reasons:
- Legal Implications: The transfer, purchase, or sale of real property usually requires specific forms of documentation (like deeds) and may be subject to various laws and regulations.
- Taxation: Real property is often subject to property taxes, which can vary based on its assessed value and the local tax rate.
- Investment: Real estate is a major category of investment, with many people purchasing homes, land, or commercial properties as a way to grow their wealth or generate income.
Understanding the distinction between real property and personal property is crucial, especially in legal contexts or when dealing with issues related to ownership, rights, or the transfer of property.
Example of Real Property
Let’s use the example of a couple, Jack and Diane, who decide to buy a property to illustrate the concept of real property.
Jack and Diane decide to buy a house in a small town. They find a beautiful two-story home situated on a 2-acre piece of land. The property has a couple of mature oak trees, a small pond, a built-in garage, and a fenced backyard. Additionally, the property comes with mineral rights, meaning Jack and Diane would own any minerals found beneath the surface.
Components of Real Property in This Scenario:
- Land: The 2-acre piece of land itself, including the space above and below the surface.
- Improvements to the Land (Artificial Attachments):
- The two-story home.
- The built-in garage.
- The fence enclosing the backyard.
- Natural Attachments:
- The mature oak trees.
- The small pond.
- Any undiscovered minerals below the surface.
- The mineral rights associated with the property.
A few months after purchasing, Jack and Diane decide to build a wooden deck attached to the back of their house. This deck becomes another artificial attachment and thus part of the real property.
Contrast with Personal Property:
Jack and Diane have a movable wooden bench that they place on their new deck. The bench, being moveable and not permanently attached, is considered personal property. If they were to sell the house and move, they could take the bench with them.
However, if they decided to build a bench directly into the deck, making it a permanent fixture, it would then transition from being personal property to being part of the real property.
This example underscores the distinction between real property (land and its permanent attachments) and personal property (movable items). If Jack and Diane ever decide to sell their property, the house, land, trees, pond, garage, fence, deck, and associated mineral rights would typically be included in the sale, unless otherwise specified in the sales agreement. The movable bench, however, would not be included unless they specifically decided to leave it behind or include it in the agreement.