2.1 Real Property, Fixtures, and the Bundle of Rights

Real Property vs. Personal Property

The national portion of the licensing exam opens with the most fundamental distinction in property law: real property versus personal property. Getting this wrong cascades into errors on fixtures, contracts, and conveyances, so master it first.

Real property (also called realty or real estate in everyday speech) consists of three things: the land, everything permanently attached to the land (improvements such as buildings, fences, and in-ground pools), and the bundle of legal rights that runs with ownership. Land legally includes the surface, the area below the surface down to the center of the earth, and the air space above.

Personal property (also called personalty or chattel) is everything that is movable and not permanently affixed to the land. A refrigerator sitting on the kitchen floor is personal property; a built-in dishwasher bolted to the cabinetry has typically become real property. The exam loves the gray zone between these two categories, which is governed by the law of fixtures.

The Bundle of Rights

Ownership of real property is best understood as a bundle of rights, each of which can be separated and conveyed independently. Memorize the classic five rights, often recalled with the mnemonic PEDCE:

Because these rights are separable, an owner can lease possession to a tenant, grant an easement that limits exclusion, or sell the mineral rights while retaining the surface. The most complete ownership, conveying every stick in the bundle without condition, is fee simple absolute, covered in Section 2.2.

Fixtures and the MARIA Test

A fixture is an item that was once personal property but has become real property because it was permanently attached to the land or a structure. When parties dispute whether an item conveys with the sale, courts apply the MARIA test:

• M — Method of attachment: How is the item affixed? The more permanent the attachment (nailed, cemented, plumbed), the more likely it is a fixture.
• A — Adaptation: Is the item specially adapted to the property? Custom storm windows or wall-to-wall carpeting cut to fit suggest a fixture.
• R — Relationship of the parties: A tenant's installation is more likely personal property; a buyer-seller relationship favors the buyer.
• I — Intention: The intent of the person who attached the item is the single most important factor courts weigh.
• A — Agreement: A written agreement between the parties controls and overrides the other factors.

An alternate ordering, IRMA (Intention, Relationship, Method, Adaptation), tests the same elements. Intention is the dominant test in both.

Trade Fixtures and Emblements

Trade fixtures are articles a business tenant installs to conduct trade, such as restaurant ovens, bar shelving, or store display counters. They remain the tenant's personal property and may be removed before the lease expires; anything left behind becomes the landlord's by accession. Emblements (the doctrine of fructus industriales) are annual crops produced by cultivation. They are treated as personal property of the tenant farmer, who retains the right to re-enter and harvest a planted crop even after a lease ends.

Appurtenances and Surface, Air, Water, and Mineral Rights

An appurtenance is a right or item that belongs to the land and transfers with it, such as an easement benefiting the parcel or a share of stock in a mutual water company. These rights run with the land, meaning they pass automatically to the new owner at conveyance.

Land ownership carries several distinct categories of rights:

• Surface rights: the right to use the ground surface.
• Subsurface / mineral rights: the right to the oil, gas, coal, and minerals below ground; these can be severed and sold separately, creating a split estate.
• Air rights: the right to the space above the land, limited by reasonable aircraft navigation and local zoning. Air rights can be sold or leased (for example, to build over a railway).

Water rights divide by the type of water adjoining the parcel:

• Riparian rights attach to land bordering a flowing watercourse (river or stream). The owner generally may use the water reasonably; if the waterway is navigable, ownership typically runs to the water's edge, and if non-navigable, to the center of the channel.
• Littoral rights attach to land bordering a stationary body of water (lake, sea, or ocean). The owner enjoys use of the water and owns the land up to the average high-water mark.
• Accretion, erosion, and avulsion describe how these boundaries shift as soil is gradually added (accretion produces alluvion), gradually washed away (erosion), or suddenly torn away (avulsion).

Finally, watch the exam's favorite memory aid: the legal tests for a fixture are sometimes presented as IRMA instead of MARIA, but both list the same elements, and intention remains the controlling factor. Remember the conversion vocabulary too: turning personal property into real property by attaching it is annexation, while detaching a fixture and converting it back to personal property is severance. A growing tree is real property; once cut into lumber it becomes personal property by severance.