Real Estate and Personal Property Law
Real Estate and Personal Property Law
This domain tests the legal boundaries of what is assessed: real property versus tangible personal property, the bundle of rights, fixtures, easements, liens, and title issues. Expect items on how a fixture is classified and how encumbrances affect value.
Core rules
- Real property includes land, improvements, and rights appurtenant. Tangible personal property is movable and is typically assessed separately.
- A fixture is a former chattel that has become part of the realty. Courts weigh annexation, adaptation to the realty, and the intention of the parties. Trade fixtures installed by a tenant often remain personal property.
- The bundle of rights includes use, enjoyment, exclusion, disposition, and possession. An easement transfers a limited use right, not title.
- Easements can be appurtenant or in gross, and can burden or benefit a parcel. A conservation easement restricts development and may reduce market value.
- Liens are encumbrances. A property tax lien generally has priority and runs with the land; a mortgage lien is a private encumbrance.
- Title defects, encroachments, and adverse possession can affect marketability and should be reflected in the valuation analysis.
Worked example
A tenant installs a walk-in cooler bolted to the floor, plumbed into the building, and custom-fitted to the space. Annexation is strong, adaptation to the building is strong, and intention may favor the landlord because removal would cause substantial damage. The cooler is likely a fixture and part of real property. If it were a display rack merely resting on the floor, it would likely remain personal property.
Traps
Assuming anything attached is automatically real property; ignoring tenant trade fixtures; treating an easement as a fee transfer; overlooking a pending tax lien; and conflating assessed value with marketable title.