Updated on July 31, 2024
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 happens most frequently in commercial leasing disputes involving fixtures and trade fixtures. 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.
Example Scenario:
Imagine you own a piece of land with a house on it (real property), and you are considering installing solar panels (personal property). You might ask, “What is the difference between real property and personal property?” Understanding how the installation of solar panels could affect the classification and value of your property and what portions are real property and what parts may be personal property is very important.
Definition of Real Property
Real property refers to land and anything permanently attached to it. This includes the land itself, buildings, trees, minerals, and fixtures that are attached to the land or structures.
Example:
A house, along with the land it sits on, is considered real property. The trees in the yard, the fence around the property, and a garage are also part of real property because they are permanently affixed to the land. That said, when you are looking at taxes, the county assessor typically differentiates between the value of the land itself and the value of the physical structures on the land otherwise known as “improvements”. Sometimes the nature of the improvements is such that they become part of the real property as opposed to personal property.
Characteristics of Real Property
Types of Estates in Real Property
The types of estates in real property refer to the nature and extent of an individual’s ownership interest in the property:
There are other types of estate that can be created in real property but these are the three most common. Moreover, who individuals or companies hold title can have an impact on what you can do with the type of estate that the person or company holds.
Definition of Personal Property
Personal property, also known as movable property, refers to any possessions that are not permanently attached to the land. It includes items that can be moved from one location to another.
Example:
A car, furniture, jewelry, and electronics are considered personal property because they can be transported and are not affixed to the land.
Characteristics of Personal Property
Immobility vs. Mobility: Real property is immovable, whereas personal property is movable.
Types of Ownership Rights: Real property ownership includes a bundle of rights such as the right to possess, control, enjoy, exclude, and dispose of the property. Personal property rights are similar but generally simpler and more flexible due to the movability of the items.
Legal Procedures for Transfer: Transferring real property typically involves a more complex legal process, including deeds, titles, and possibly court approval. Transferring personal property is usually simpler and might only require a bill of sale or transfer of possession.
Example of Transfer Differences:
– Real Property: Selling a house involves signing a deed, transferring the title, and recording the sale with the county.
– Personal Property: Selling a car involves transferring the title through the Department of Motor Vehicles (DMV) and may include a bill of sale.
Navigating ownership issues between real property and personal property can be complex, especially when personal property becomes a fixture, meaning it is attached to real property and may be considered part of it. This often occurs in commercial settings where equipment or installations become integral to the property.
Legal Challenges:
– Fixture Disputes: Determining whether an item is a fixture or personal property can lead to disputes, especially during the sale of property or lease termination. For example, consider what happens to a restaurant’s equipment like refrigerators, stoves, cooking stations and other items that the restaurant uses in its trade at the end of its lease term.
– Boundary Issues: Real property often involves disputes over property lines, easements, and rights of way.
– Transfer Complications: Transferring ownership of real property involves numerous legal steps and potential pitfalls, unlike the relatively straightforward process for personal property.
A real estate attorney can provide invaluable assistance in navigating the complexities of property ownership, whether real or personal. They can help:
– Clarify whether an item is considered real or personal property.
– Handle disputes involving fixtures, trade fixtures, and property boundaries.
– Facilitate the legal transfer of real property, ensuring all documents are correctly prepared and filed.
– Advise on the implications of improvements and modifications to real property.
Our experienced Los Angeles based real estate attorneys have a great deal of experience with real estate matters and disputes in the state of California. We have literally done 1000+ disputes involving real property and/or personal property. To see if you qualify for a free 30-minute consultation, call us at 310-954-1877 or contact us by filling out this form.