1.1 Real Property vs. Personal Property

Real Property and the Bundle of Rights

Real property (also called realty or real estate in everyday speech) is the land itself, everything permanently attached to it, and the legal bundle of rights that comes with ownership. The land component extends downward to the center of the earth, upward into the air (subject to navigable-airspace limits), and includes things growing on it and below it.

The bundle of rights is a classic exam concept. Each right can be separated and sold individually:

A memory device tested often is PCEED (Possession, Control, Enjoyment, Exclusion, Disposition). Because rights are severable, an owner can sell mineral rights while keeping surface rights, or grant an easement (a slice of the control/enjoyment right) without selling the land.

Personal Property (Chattel)

Personal property, also called chattel or personalty, is everything that is not real property: it is movable and not permanently attached. A refrigerator, a couch, and a free-standing bookshelf are personal property. Personal property transfers by a bill of sale, not by deed.

The sharpest exam trap is the gray zone between the two classes, where personal property is attached to realty (or removed from it). Two conversions matter:

• Annexation — personal property is attached to land and becomes a fixture (now real property). Example: lumber (personalty) built into a fence becomes realty.
• Severance — something attached is detached and becomes personal property again. Example: an apple harvested from a tree, or a chandelier unscrewed and taken.

Because a sales contract conveys real property and its fixtures but not the seller's personal property, the parties must specify which borderline items (window treatments, appliances, mounted TVs) stay. Disputes here generate a high share of test questions.

The Fixture Test: MARIA

When an item's status is disputed, courts and exams apply five factors, memorized as MARIA:

1. Method of attachment — Is it bolted, cemented, or wired in? Permanent attachment suggests a fixture.
2. Adaptation — Is the item custom-fit to the property (custom storm windows, a fitted bookcase)? Adaptation suggests a fixture.
3. Relationship of the parties — A tenant's items are read as removable more readily than an owner's; a buyer is favored over a seller in ambiguity.
4. Intent — The single most weighted factor. Courts infer intent from objective conduct, not after-the-fact testimony.
5. Agreement — A written agreement (in the lease or sales contract) overrides the other four factors.

Worked example: A tenant installs a window air-conditioning unit held by two screws. Method = minor, intent (a tenant rarely intends a gift to the landlord) = removable, relationship (tenant) = removable. Result: personal property, the tenant may take it. Now bolt a central HVAC compressor to a concrete pad and wire it into the panel: method and adaptation point strongly to a fixture, so it stays.

Trade Fixtures and Emblements

Two special categories override the ordinary fixture rule.

Trade fixtures are items a commercial tenant attaches to conduct business — bar shelving in a restaurant, salon stations, walk-in coolers. Even though they are attached, they remain the tenant's personal property and may be removed before the lease ends, with the tenant repairing any damage. If left behind, they pass to the landlord by accession. A frequent trap: trade fixtures belong to the tenant, not the landlord, despite being bolted down.

Emblements are annually cultivated crops (corn, wheat, soybeans) produced by a tenant farmer's labor. Under the doctrine of emblements, the tenant keeps the right to re-enter and harvest the crop even after the lease term ends, because the crop is treated as the tenant's personal property. By contrast, perennial growth such as orchards, timber, and grass (fructus naturales) is real property and conveys with the land to a buyer.

The distinction is intent and labor: planted annual crops follow the cultivator; naturally recurring growth follows the land.

Putting the Classes Together

The practical reason all this matters is that real property conveys by deed and includes its fixtures, while personal property conveys only by a separate bill of sale and only when the parties agree. Mislabeling an item is a frequent source of closing disputes and licensee liability.

A short workflow keeps it straight:

1. Is the item attached to the realty? If clearly movable and unattached, it is personal property.
2. If attached, apply MARIA — and remember that a written agreement in the contract beats every other factor.
3. Check for the two overrides: a commercial tenant's trade fixtures stay personal property; a tenant farmer's emblements (annual crops) remain the tenant's even after the term.

Worked scenario. A seller's contract lists 'all attached fixtures convey; the dining-room chandelier is excluded; the washer and dryer convey.' Here the agreement governs: the chandelier — normally a fixture by attachment — is carved out and stays the seller's personal property, while the washer and dryer — normally personalty — are expressly converted into items that transfer. When the contract speaks, MARIA's other four factors fall silent.