There are two types of property. In legal terms, all property will be classified as either personal property or real property. This distinction between types of property comes from English common law, but our modern laws continue to distinguish between the two. Each type of property is treated differently under the law. There are many different types of laws that specifically pertain to personal property, and many other types of laws that pertain specifically to real property. Normally, a piece of property can be easily classified as either personal property or real property. The difference between the two is usually fairly straightforward. However, sometimes it’s a little harder to categorize property. Let’s say that I buy lumber and other building supplies, such as a saw, a hammer, and some nails. These supplies are personal property. They’re moveable and they belong to me. Next, I use these items to build a shed on my land. Is this shed personal property? No. The shed is real property because it’s attached to, and now part of, my land. Any leftover building supplies are still personal property, like my saw and hammer. But anything that’s actually part of the shed is now real property. Personal PropertyLet’s take a closer look at why this is. Let’s look at the types of items that are classified as personal property. Personal property includes possessions, of really any kind, as long as those possessions are movable and owned by someone. Personal property isn’t affixed to or associated with land. These moveable items are sometimes known as chattels. The law regarding chattels includes those laws covering possession, gifts, lost property, abandoned property, and stolen property. Personal property, therefore, includes belongings of any kind, as long as they are movable and are owned by someone. Personal property is usually viewed as assets and can be used in defining the net worth of a person. Some examples of personal property include bank accounts, insurance policies, furniture and fixtures in the homes, stocks, vehicles, boats, collectibles, antiques, books and pensions. Adding on the example about farm structures above, farm animals would be personal and not real property. They can be moved from one place or farm to another. It’s helpful to note that personal property includes both tangible and intangible items. A tangible item is an item that can be felt or touched. For a business, tangible personal property includes items the business owns such as: Personal property: ChattelsThe term chattel sometimes refers to all kinds of personal property, but often it refers only to tangible personal property (such as nose flutes and toenail clippers) as opposed to intangible property. A chattel, such as a furnace, can be affixed to land and become part of the real property. Such chattels are called fixtures. However, fixtures may retain their quality as separate personal property for certain purposes. For example, at the end of a lease term, the tenant generally has the right to remove fixtures she installed even though she doesn’t have any more right to the real property when the lease ends. Another example let us say that a person buys lumber and other building supplies including a hammer, saw, and some nails. These materials are personal property. They are chattels since they are tangible and are moveable. In a business setting, chattels or tangible personal property can include business equipment, office furniture, business vehicles, business goods and more. Extending this example, let us also say that this same person uses these tangible items to construct a shed on their land. Can we say that the shed personal property? No. The shed is real property. Because it is attached to and is now part this person’s land. Well, what about the building materials saw, hammer and leftover nails? Those are tangible personal property – they are movable, unlike the shed. Personal property: IntangiblesIntangibles are all kinds of personal property that aren’t tangible, that can’t be seen or touched. So, you can say this kind of property doesn’t involve a “thing” at all; it involves only a legal right. The mere existence of such a category of property is a reminder that, in the law, property most accurately refers to legal rights, not to things. Property rights: Things that can’t be ownedSome things can’t be owned at all and therefore can’t be private property. Some of these things, such as light, air, and the high seas, can’t be owned because they naturally seem communal. Other things, such as rivers and coastal waters, can’t be owned because they belong to the public. And some things can’t be owned because they’re illegal, like heroin. Real property: Land and buildingsReal property describes land and things that are attached to the land, which is why land is sometimes called real estate or realty. Even though wood, steel, and other building materials aren’t land themselves, when they’re built into structures attached to the land, they become real property, too. Trees and other plants naturally growing on the land are also part of the real property. But plants that require regular human cultivation and labor, such as grains and vegetables, sometimes aren’t treated as part of the real property. Real property is immovable property. It describes land and things, such as buildings, that are attached to that land, which is the reason why land is sometimes called real estate. Although steel, wood and other building materials are not land in themselves, when constructed into structures attached to land, they become real property. Trees, as well as other plants that are naturally growing on the land in question, are also part of the real property. However, plants requiring consistent human labor such as vegetables and grains are not treated as part of the real property. Differences between Personal and Real PropertyNow that we have understood the two types of properties, the next thing is to outline the differences between them. Although in trying to explain the meanings of the two types of property many differences have come up, we are going to outline those differences below. How many have you picked from the discussion above? Here are the major differences between personal and real property. 1. Real property is immovable and is permanently attached to the land including a house, walls, blinds, windows, fixtures, doors, and more. On the other hand, personal property can be moved or taken from a home or business including furniture, artwork, light fixtures and more. It is not affixed in any way. Real Property LawyerReal property is not only what is on your land, but it also consists of what is below and above it. If you have oil in your backyard, by all means you have the right to dig and acquire that oil. Personal property deals primarily with movable things, even if they weigh a ton, as long as they are not attached to the land. You might ask yourself, what’s the purpose behind these two classifications? Well, the classifications enable the law to draw a line between the two. Property can be categorized as real or personal.Real property comprises of anything that is attached permanently to land such a home, a garage, shed or even a rose flower. Conversely, if it were movable, then it would be personal property. A rose bush is a real property unless if it is pulled out of its garden, which would make it personal property. That said anything that is movable represents personal property, while the immovable is real property. Real Estate LawyerWhen you need legal help with real property law or personal property law, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.
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