1.1 Real Property vs. Personal Property

Real Property vs. Personal Property

Every exam question about what conveys in a sale starts with one distinction: is the item real property or personal property? Real property (realty) is land, everything permanently attached to it, and the bundle of legal rights that comes with ownership. Personal property (also called chattel or personalty) is everything movable that is not permanently attached.

Think of the chain: land is the surface, the subsurface, and the air above. Real estate is land plus permanent man-made improvements (a house, a fence, a paved driveway). Real property is real estate plus the intangible legal rights that run with it.

The Bundle of Rights

Ownership is not one right but a bundle. Memorize it with the acronym DEEPC:

A partial transfer (such as granting an easement or signing a lease) gives away one stick from the bundle while the owner keeps the rest.

Also know the related rights that come with the land: surface rights, subsurface (mineral) rights, water rights, and air rights. Each can be sold or leased separately. A landowner may convey the mineral rights to an oil company while keeping the surface, splitting the bundle vertically. Water rights vary by doctrine: riparian rights attach to land bordering a flowing waterway (a river or stream), while littoral rights attach to land bordering a stationary body of water (a lake or ocean), generally granting ownership to the average high-water mark.

Fixtures: The IRMA Test

A fixture is an item that was once personal property but became real property by being permanently attached (annexation). When a fixture exists, it conveys automatically with the real estate unless the contract says otherwise. Disputes over ceiling fans, built-in shelving, or above-ground pools are resolved with the IRMA test:

• I — Intention of the party who installed it (the most heavily weighted factor on the exam). Did they intend it to stay permanently?
• R — Relationship of the parties. Courts favor the buyer over the seller and the tenant over the landlord in close calls.
• M — Method of annexation. How is it attached? Bolted, cemented, or hard-wired suggests a fixture; sitting on the floor suggests personalty.
• A — Adaptation to the real estate. A custom-cut storm window or a house key is adapted to that specific property and treated as realty.

Trap: the exam loves to make intention the deciding factor. If a fact pattern says a tenant installed a chandelier intending to take it when they moved, intention controls even though it is bolted in.

Annexation and Severance

• Annexation turns personal property into real property: lumber (chattel) nailed into a deck becomes part of the realty.
• Severance turns real property back into personal property: a standing tree (realty) cut into firewood becomes chattel.

Trade Fixtures and Emblements

Trade fixtures are articles a commercial tenant installs to conduct business — a pizza oven, a barber chair bolted to the floor, or store shelving. They remain the tenant's personal property even though attached. The tenant may remove them before the lease expires but must repair any damage caused by removal. If the tenant fails to remove them by lease end, they may become the landlord's property by accession.

Emblements (the doctrine of emblements) are annually cultivated crops — corn, wheat, soybeans — produced through a tenant's labor. They are treated as the tenant's personal property, so a farm tenant retains the right to re-enter and harvest the crop even after the lease ends. By contrast, fructus naturales (naturally growing perennials such as trees, shrubs, and uncultivated grasses) are real property and pass with the land.

Worked example: A seller's contract lists the property and "all attached fixtures." The seller wants to take the dining-room chandelier. Because a hard-wired chandelier is attached and the contract does not exclude it, it is a fixture and conveys to the buyer. To keep it, the seller had to exclude it in writing before the contract was signed — the cleanest way to avoid the dispute entirely.

Putting It Together on Exam Day

When a question asks what conveys in a sale, run the checklist in order: (1) Is the item land or permanently attached? If yes, it is realty and conveys. (2) If attached by a tenant for business, it is a trade fixture and stays personal property. (3) If it is an annually planted crop, it is an emblement and the tenant keeps it. (4) When attachment is ambiguous, apply IRMA, weighting intention most heavily.

Memorize this grid and most "what stays" questions resolve in seconds. The cleanest way to override any default is a written exclusion or inclusion in the purchase contract before signing.