Property Rights - Real vs. Personal Property

Property Rights

When selling property, it's crucial to understand the type of property being sold. This section focuses on:

• Real Property: Land and anything attached to it.
• Personal Property: Anything not attached to land.

Real Property

• Defined as land, anything attached to the land, and associated ownership rights.
• Also referred to as real estate, realty, or immovable property.
• Real property includes both the land and the bundle of rights; real estate, realty, and immovable property refer to the land and its attachments only.
• In practice, these terms are often used interchangeably.
• Ownership transfer occurs via a deed.
• Transferring ownership is known as granting title.
• Ownership is a "bundle of rights," which can be separately transferred.

Bundle of Rights

The bundle of rights includes:

• Possession: The right to hold and occupy the property.
• Exclusion: The right to limit access to the property.
• Control: The right to control the use of the property within legal limits.
• Disposition: The right to transfer ownership through sale, rental, or will.
• Enjoyment: The right to use the property in any legal way.

Defining Real Property

Real estate extends vertically and connects to other properties, requiring clear definition. This includes:

• Land and Surface Rights:
  • Land is the earth's surface.
  • Surface rights extend approximately 30 feet below the surface.
• Improvements on the Land:
  • Anything permanently attached to the land, directly or indirectly (e.g., a house).
  • Individual attachments are called fixtures (e.g., window blinds).
• Air Rights and Mineral Rights:
  • Rights to the space above and below the land and natural resources.
  • Vertical interests that can be sold or leased separately.
  • Solid mineral rights: Solid minerals.
  • Liquid mineral rights: Oil, gas, etc.
  • Doctrine of Capture: In some states, landowners can capture liquid minerals, but do not own them.
  • Utilization Pooling: In other states, landowners own a fraction of liquid mineral rights under their property.
• The suffix "or" indicates the giver (grantor gives the deed), and "ee" indicates the receiver (grantee receives the deed).
• Historically, air and mineral rights were governed by Cuius est solum, eius est usque ad coelum et ad inferos.
• $Cuius\ est\ solum, \ eius\ est\ usque\ ad\ coelum\ et\ ad\ inferos$ (Latin for "whoever's is the soil, it is theirs all the way to Heaven and all the way to hell").
• Air rights changed after United States v. Causby.
• Navigable airspace is between 80-500 feet under the FAA's jurisdiction.
• Mineral rights extend to the earth’s core.
• Profit a´ prendre: If mineral rights are separate from the surface, the owner has the right to harvest the minerals.

Riparian Rights

• Ownership rights for landowners whose property borders a river or waterway.
• Navigable rivers: Rights extend to the accretion line (edge of the water).
• Non-navigable rivers: Rights extend to the midpoint of the water.
• Doctrine of Prior Appropriation:
  • Used in Western states; ownership based on who used the water first.
• Riparian Rights:
  • Used in Eastern states.

Littoral Rights

• Ownership rights of property bordering lakes and oceans.
• Ownership extends to the accretion line (mean high tide line).

Appurtenances

• Property rights or items attached to the land outside its boundaries.
• Examples: Easements, in-ground pools, mailboxes, deeded parking spots.

Personal Property

• Any property not attached to land or improvements.
• Also called personalty, chattel, or moveable property.
• Transferred via a bill of sale.

Differentiating Between Personal and Real Property

Four tests to determine property type:

• Attachment: Whether the property is permanently attached to the land.
• Adaptability: Whether the property is custom-built or generic.
• Intention: The intent of the installer regarding permanence.
• Agreement: Buyer and seller agreement, which overrides the other tests.
• Statute of Frauds: Requires real estate contracts to be in writing.
• Real estate agents should clarify included/excluded property with buyers and sellers.

Intention is the most important test:

• Trade Fixtures: Business property attached to land but treated as personal property.
• Emblements: Annually planted and harvested crops treated as personal property.
• Note: Permanent plants (e.g., apple trees or vineyards) are real estate.

Changing Property Types

• Categories are mutable unless otherwise agreed.
• Annexation: Personal property becomes real property (e.g., planting a sapling).
• Severance: Real property becomes personal property (e.g., digging up a tree).