REAL PROPERTY

May 24, 2015 by: Content Team

The term real property refers to land, and any buildings, structures, and
equipment permanently attached or fixed to the land. Ownership of real property
also addresses ownership of whatever is growing on, or lies beneath the land.
Often referred to as “real estate,” real property is one of the most important, and
most lucrative, items bought, sold, and traded in the United States. The laws
regarding the buying, selling, and use of real property vary by state, but in each
case, real property is distinguished from personal property and intellectual
property. To explore this concept, consider the following real property definition.

Definition of Real Property

Noun
1. Property including land, and all appurtenances, buildings, crops,
mineral and water rights that are a part of it.
Origin

1760-1770 Middle English

What is Real Property

Historically, according to British common law, real property is a subunit of
property. Property is defined as a subset of land that has been legally defined,
and that has been, or may be improved through human efforts. Improvements
that may be made to classify a legally defined plot of land as “real property,” may
include such endeavors as buildings and other structures, as well as wells,
canals, ponds, dams, and roads. In addition, anything that grows upon the land is
subject to ownership of the land itself. This might include forested property and
crops. Real property laws protect the status of real property when it comes to the
real estate market.

Real Property Law

With the exception of Louisiana, every state in the U.S. has specific real property
laws governing real property and the estates they include. While such laws vary
by jurisdiction, by definition, real property includes the land, as well as anything
that is fixed to the land, such as buildings and fixed equipment. In some states,
whatever lies beneath a plot of land is part of that real property. In other states,
whatever lies beneath, or passes through, a property may be subject to different
laws, and could be under separate ownership. This includes such things as
valuable ore, precious gems and metals, and even water. Control or ownership of
these items may be contained in specific mineral rights, water rights, or other
documents, all of which are filed with the county recorder.
For Example:

Billy and Samantha buy a two-acre piece of land with the intention of building
their dream home in the country. As part of their landscape construction, the
couple plans to dam up a small stream that runs through the property to create a
large pond. Unfortunately, after putting in a lot of work to create a lovely, peaceful
water feature, they are notified that they have no right to dam up the stream, as
the property owner downstream owns the rights to that water for watering his
livestock. Billy and Samantha consult with a local attorney and are disappointed
when she confirms that, while they can use the water as it travels across their
land, they cannot use it all, nor can they divert or dam the stream.

Water and mineral rights are very important issues that should be disclosed
during the purchase negotiations of any real property, and are required to be
specified on the property’s deed.

Real Property vs. Personal and

Intellectual Property
The term personal property refers to any physical item that can be owned, that is
not fixed to real property. This includes anything from home furnishings, clothes,
and jewelry, to cars, pets, tools, and appliances.
The term intellectual property refers to any non-tangible item that can be owned or
traded, such as music, literature, designs, and other artistic works. Intellectual
property also refers to patents, trademarks, and copyrights.
For example:

Anton and Marie own their home and the land on which it sits. This property, as
well as rights to the water and minerals that may be beneath the land are
considered real property. The furnishings, appliances, and everything inside the
home, as well as their two cars parked in the driveway, are personal property.

Anton is a musician, supporting his family by writing songs, which he sells or

licenses to other musicians. All of Anton’s written endeavors are protected
by copyright, which is not something he can hold or touch, meaning it is
intangible. Anton’s copyrighted works are considered to be intellectual property.

Types of Real Property Ownership

Real property can be owned in a number of ways, meaning that the owner has
certain specific rights and responsibilities depending on the type of real property
ownership he holds. The most common types of real property ownership include:

 Tenancy in Severalty – in direct opposition to how this term sounds, it

refers to ownership of a piece of real property by a single person
or corporation.
 Tenancy in Common – ownership interests held in a single property by
two or more people. When one co-owner, or “tenant in common,” dies,
his share of the property may be left to his heirs.
 Joint Tenancy – ownership interests held in a single property by two or
more people, having acquired their interest in the property at the same
time, on the same deed. If one co-owner dies, his portion of the
property automatically transfers to the remaining co-owners.
 Tenancy by Entirety – a form of ownership available only to married
couples, in which the property cannot be sold without the agreement of
both parties, and should one spouse die, his ownership interest goes
directly and solely to the surviving spouse.
What is an Estate
In relation to real property, the term estate refers to the interest, or degree of
ownership, an individual holds in real property. In fact, this is where the term real
estate originates. Generally speaking, estates are classified as either “freehold,”
or “less-than-freehold,” each providing the owner varying rights.

Freehold Estate
A freehold estate is a type of estate in which a person or corporation has
ownership for an indefinite amount of time. There are three times of freehold
estate:

 Fee Simple Absolute – a type of ownership in which the owner has the
greatest interest in the parcel of land possible. Fee simple ownership
is absolute, limited only by the government’s powers of
taxation, eminent domain, police power, and escheat.
 Fee Simple Defeasible – a transfer of ownership of real property on
which certain conditions have been placed. In the event the conditions
are not met, the property reverts back to the original owner, or
“grantor.”
 Life Estate – ownership of a property held while the individual is alive,
but which reverts back to the original owner, or grantor, upon the life
estate owner’s death.

Less Than Freehold Estate

A less than freehold estate, also known as a “leasehold estate,” is real property
held by a person who rents or leases, but does not own, property. In a less than
freehold estate, or leasehold estate, the tenant has the right to occupy the
property, though the property automatically reverts back to the owner after the
lease has expired.