The Distinctions Between Real Property and Personal Property

What is the Difference Between Real Property and Personal Property?

Updated on December 5, 2022

Definitions Real and Personal Property

Schorr law’s practice concentrates on litigating matters relating to real property. Personal property matters, however, are not necessarily excluded from the firm’s practice. Sometimes, personal property is used to improve real property. When that happens, it is possible that the law will treat the personal property as real property. This tends to apply more to commercial tenants and will be further explored in another blog. Our discussion below provides a refined application behind the meaning of property and the distinctions between real and personal property.

Difference Between Real Property and Personal Property

In its most narrow construction, the word property could mean a physical object such as an automobile or a parcel of land. Applying the term broadly extends property to every form of interest that is capable of being transferred and enjoyed, including intangible creations and developments of the mind.

ALSO READ  Void vs. Voidable Contracts - What Is The Difference?

The California Supreme Court in Ponsonby v. Sacramento Suburban Fruit Lands Co. (“Ponsonby”) explained that, “when unqualified, the term is sufficiently comprehensive to include every species of estate, both real and personal, whether choate or inchoate.” (Ponsonby v. Sacramento Suburban Fruit Lands Co. (1930) 210 Cal. 229, 232.)

The Court further added, “in its proper sense property includes everything which goes to make up one’s wealth or estate.” (Id.) The California Code of Civil Procedure classifies property as either

  1. Real or immovably, or
  2. Personal or movable. (Cal. Civ. Code § 657.)

Irrespective of the form of property, property derives its value from the bundle of rights bestowed by the law.  This includes the right to own property.

Ownership is tied to the “right of one or more persons to possess and use it to the exclusion of others.” (Cal. Civ. Code § 654.)  Accordingly, Cal Civ. Code § 654 defines property simply to “the thing of which there may be ownership.”

ALSO READ  The Difference Between a CLTA and ALTA Title Insurance Policy

As mentioned above, Schorr Law’s practice is dedicated primary to matters involving real property and the bundle of legal rights associated thereto.  This is separate and apart from personal property.

Real property consists of:

  1. Land,
  2. That which is affixed to land,
  3. That which is incidental or appurtenant to land, and
  4. That which is generally immovable by law.

(Cal Civ. Code § 658.) Per the law, every other kind of property that is not real property is “personal property.” (Cal Civ Code § 663 [every kind of property that is not real is personal].)  That is, personal property is “movable.” This includes money, goods, chattels, or things in action.  (Cal. Civ. Code § 14.)

Based on the above, the land you live in or lease is considered real property. (Krouser v. San Bernardino County (1947) 29 Cal. 2d 766, 768, 770.)  Although the focus of our practice is real property, it could also involve personal property. Specifically, for those situations when personal property becomes substantially integrated with land such that the law deems personal property to be part of the land.

ALSO READ  Does a Property Owner Have A Right to a View?

To foreshadow our blog on this topic, personal property that has integrated into real property is known as a fixture. This classification is important for those of you who lease land and have made land improvements with personal property that, depending on the circumstances, might have already converted to real property.

Our experienced real estate attorneys at Schorr Law have a great deal of experience with real estate matters and disputes. To see if you qualify for a free 30-minute consultation, contact us today!