Real Property and Personal Property
What are the reasons you should label something as either real property or personal property?
- The distinction between real and personal property is particularly important when property is sold or leased. When real estate is sold, fixtures are usually considered part of the land and go to the buyer. - Ownership and transfer of title to real property are subject to the laws of the state within which the land is located. The only exceptions are for federally owned lands and land that is part of a federal proceeding, such as bankruptcy. Ownership and transfer of personal property are subject to the laws of the state where the property owner resides, even if the personal property is located elsewhere. - The distinction between real property and personal property also is important in the formation of a contract of sale. Most contracts involving real property must be in writing. For personal property, a written document generally is required only when the value of the property exceeds $5,000 (California Civil Code Section 1624.5). A written instrument also may be required for transactions involving personal property that fall within the rules of the Uniform Commercial Code, such as bulk sales of goods, sales of securities, and formation of security agreements. - Ownership of real property is usually transferred by an instrument called a deed. Ownership of personal property usually is transferred by a bill of sale. - As you will learn in Unit 4, transfers of real property can be recorded with the county recorder to give notice of the transfer to other parties. Instruments conveying personal property generally cannot be recorded, and recording may not be considered notice of the conveyance. - Real property and personal property are subject to separate tax laws.
The five major rights, which can be remembered by the acronym PUEDE, are?
1. Right of Possession 2. Right to control the property's Use 3. Right of Enjoyment of the property 4. Right to Dispose of the property 5. Right to Exclude others from the property From these rights flow other privileges of ownership.
right of prior appropriation
A water rights concept in California and other states that the first user of riparian water obtains priority over subsequent users.
Adaptability (Maria)
Adaptability of the thing for the land's ordinary use. The better adapted, the more likely it will be considered a fixture. A custom-fitted item, such as a swimming pool cover, would fall into this category.
What is now a feature of many property listings that has raised concerns?
Aerial photography
Agreement (Maria)
Agreement of the parties. If the parties are knowledgeable, they can avoid ambiguities by specifying in writing whether various items are fixtures or personal property and how those items will be affected by the transaction.
What must exist with a mutual water company?
An adequate potable water supply and distribution system for domestic use and fire protection.
appurtenant
Appurtenant items belong to a property. For example, the garage is appurtenant to the house. Appurtenant items run with the land when the property is transferred. anything used with the land for the benefit of its owners, such as a roadway or waterway.
Relationship (Maria)
Relationship of the parties. If a residential tenant attaches something to the premises, there will be a presumption that it is personal property and removable by the tenant. The court favors tenant over landlord and buyer over seller.
bundle of rights
The concept of land ownership that includes ownership of all legal rights to the land, for example, possession, control within the law and enjoyment.
land
The earth's surface, extending downward to the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees, water, as well as oil and gas the soil, the material that makes up what is called earth
real property
The interests, benefits and rights inherent in real estate ownership. essentially, its real estate plus the 'bundle of rights'
Underground Water Rights
The theory of underground water rights that applies in California is known as the correlative theory. The correlative theory provides landowners with equal rights to use underground water for beneficial purposes, as long as they do not seriously deplete the water supply of their neighbors. In the event of a water shortage, courts may apportion the underground water supply among landowners
chattel
The word chattel evolved from the word cattle, one of the early important possessions. Chattels real are annexed to real estate, whereas, chattels personal are movable.
Do owners of riparian rights own the water?
They do not own the water but have the right to make reasonable use of it on their own property.
What are some of the news rules for the drones and when did they go into effect?
Took effect August 29, 2016. They provide safety regulations for drones weighing less than 55 pounds that are conducting non-hobbyist operations, to minimize risks to other aircraft as well as people and property on the ground. The drone operator must be at least 16 years old and have a remote pilot certificate.
example of how property can change its character?
Trees are real property while they are growing in the ground. When the trees are cut down, they become personal property. Tree logs may be cut into boards and used in the construction of a building that is considered part of the land. Thus, the wood from the tree that began as real property may again become real property.
Are parties to a lease of real property free to make any agreement as to fixtures?
Yes and in the absence of an agreement, several laws can be applied
Real property is often described as what?
a bundle of rights that includes the legal rights of ownership
Water litigation disputes may be referred by?
a court of law to the California State Water Resources Control Board for hearing, then returned to the court for final adjudication.
trade fixture
an article of personal property affixed to a leased premises by the tenant as a necessary part of the tenant's trade or business. At the termination of a lease, trade fixtures are removable by the tenant before expiration of the lease. The tenant is responsible for any damages caused by their removal.
fixtures
an article of personal property that has been so affixed to real estate that it has become real property. anything, including improvements, that is attached or affixed to land. A fixture can be attached by its roots (trees or shrubs) or imbedded in the land (walls). A fixture might also be something permanently resting on the land, such as a building. A building would include all things customarily considered permanently attached to it, such as siding, plaster, nails, doors, and windows.
What are some examples of appurtenances?
are some easements, rights-of-way, and condominium parking spaces. an appurtenance could even be a passage for light, air, or heat from or across someone else's land. Stock in a mutual water company may be appurtenant to land. If it is, it can only be transferred with the land.
Growing demand for commercial and residential uses must be what?
balanced against agricultural use of both surface and underground water resources, and all of these must consider both present and future needs
Why is an appurtenance said to "run with the land"?
because it is transferred when the land is transferred.
Why is the simple definition of fixture not always simple to apply?
because there are times when the status of a thing as a fixture to real estate, rather than personal property, is not clear-cut.
All California property can be categorized as what?
either real property or personal property
real property (realty) is considered what while personal property (personalty) is considered what? and is it possible for property to change its character as realty or personalty?
immovable and movable. Yes, depending on how it is used.
What may the state exercise if there is reason to divert water for public use?
its right of appropriation
Who do underground water rights belong to?
landowners who have a right of correlative use of the water under their land
What do owners of littoral rights have the right to do?
make reasonable use of the water on their own property
Right of appropriation
the right of the government to take, impound, or divert water flowing on the public domain from its natural course for some benefit to the public.
Riparian Rights
the rights of a landowner whose land borders on a stream or watercourse to use and enjoy the water which is adjacent to or flows over the owners land, provided such use does not injure other adjacent land owners
What if the stream is navigable?
the state owns the land under the stream and the riparian landowner's property line is the mean high water line of the stream; otherwise, the landowner's property line is the center of the stream.
water table
the upper limit of percolating water below the earth's surface, at a depth of a few feet or hundreds of feet. The natural level at which water is located in a particular area, be it above or below the surface of the earth.
The California Civil Code definition of real property includes what elements:
- Land - Fixtures (attachments) to land - Anything incidental or appurtenant to land - Anything immovable by law
If a tenant has attached personal property to the premises, the property may be removed before the end of the lease term if:
- it was installed for purposes of trade, manufacture, ornament, or domestic use - it can be removed without substantial damage to the premises.
emblements
1. Growing crops produced by the labor of the cultivator. 2. The right to the profits from such crops. Cultivated crops
fructus industriales
Corn, wheat and other crops that are produced annually by labor and industry, and not spontaneously. Crops produced by human labor (lettuce, cotton, grapes, and so on)
correlative use
Doctrine that states that property owners may use a reasonable amount of water from an underground source, but not to the detriment of adjoining property owners.
Intent (Maria)
Intent in placing the item on the land. This is the most important consideration. The intent may be for reasons of health and safety rather than to improve the property, such as installation of a fire extinguisher.
What are some local and central city air laws?
Local laws impose building height restrictions. Central city locations, air rights may be a profitable commodity. They may be transferable from one property owner to another to allow construction of skyscrapers on limited and expensive ground area.
California courts use five general tests in determining whether a specific thing is a fixture-that is, considered a permanent attachment to land. What are the five tests?
Maria Method Adaptability Relationship Intent Agreement
Method (Maria)
Method by which the thing is affixed. The greater the degree of permanence in the attachment, the more likely it is a fixture. A wood gazebo on a concrete foundation is attached permanently; a screened enclosure fastened to the ground with tent stakes is not.
What are two examples of massive developments that have moved water throughout California?
The California Water Project and the Central Valley Project?
littoral rights
The rights of a landowner whose land borders a pond, lake or ocean shore-line where the body of water is non-flowing. Littoral rights extend to the mean high watermark of ocean or tidal waters.
fixture
an article of personal property that has been so affixed to real estate that it has become real property anything attached to land
What was the historic concept of air rights?
infinite airspace having no limitation
A property owner usually has the power to what?
mortgage, cultivate, explore, lease, give away, share, trade, or exchange the property owned
California law recognizes that property may be possessed by whom?
one or more persons to the exclusion of all others
When may a tenant remove a fixture installed for some other purpose?
only if the tenant believed in good faith that the fixture could be installed and subsequently removed
What is underground water that is not confined to a defined stream?
percolating water
real estate
physical land at, above and below the earth's surface with all appurtenances, including any structures.
Appropriative water rights are subject to what?
priority of claims filed before December 19, 1914; the claims remain valid as long as the water is put to a beneficial use.
mineral rights
rights to the subsurface land and profits derived therein. Normally, when real property is conveyed, it includes everything above and below the surface of the land, except where specified by the grantor. refers to the right to remove substances from the land, usually from beneath the surface. The term includes solid minerals, such as gold, coal, iron, and gravel from the soil as well as riverbeds. also include minerals that have a "fugitive or fluid nature, such as oil and gas." All or some of the minerals may be transferred apart from the rest of the land.
The Department of Transportation's Federal Aviation Administration (FAA) has issued rules for the use what?
small unmanned aircraft systems (UAS), commonly referred to as drones
fructus naturales
the "natural fruits" of the land where they grow, such as such as timber and wild game. Under common law, fructus naturales are considered part of the real property, and not separate chattels in relation to any legal sale of the property
What federal law allows use of airspace by aircraft?
the Air Commerce Act of 1926 and the Civil Aeronautics Act of 1938
Water rights
the legal right to use water from a water source or body of water on a property
Between seller and agent, what should identify the items the seller wants to remove?
the listing agreement
Personal property
things that are tangible and movable; property that is not classified as real property, such as chattels. Title to personal property is transferred by way of a bill of sale, as contrasted with a deed for real property. every kind of property that is not real property
Emblements are considered part of then land until what?
until they are harvested and then they become personal property
Since December 19, 1914, permits have been issued for what?
use of water in an area adjoining or distant from a body of water.
When may people with underground water rights withdraw water?
water for which they have a beneficial use on their own property
When may a mutual water company be formed?
when a subdivision is created and is owned by individual lot owners, who are its shareholders
Would the tenant have to repair or pay for any property damage resulting from the removal?
yes