Traditionally, ownership of real property is described as a BUNDLE OF LEGAL RIGHTS. In other words, a purchaser of real estate actually buys the rights of ownership held by the seller. These rights include the rights of:
The concept of a bundle of rights comes from old English law. In the Middle Ages, a seller transferred property by giving the purchaser a handful of earth or a bundle of bound sticks from a tree on the property, symbolizing the whole property. The purchaser, who accepted the bundle in a ceremony, became owner of the tree producing the sticks and the land to which the tree was attached. Because the rights of ownership (like the sticks) can be separated and individually transferred, the sticks became symbolic of those rights.
PERSONAL PROPERTY
PERSONAL PROPERTY IS MOVABLE. Items of personal property, also referred to as PERSONALTY OR CHATTELS, include such tangibles as chairs, tables, clothing, money, bonds, and bank accounts.
Manufactured Housing vs Mobile Homes
MANUFACTURED HOUSING – Now normally permanently attached to a concrete pad or foundation, and is TAXED AS REAL ESTATE.
MOBILE HOMES – Designed to be moved. Not permanently attached to the land (set on blocks, jacks or wheels) and are TAXED AS PERSONAL PROPERTY
Plants
Trees and crops generally fall into one of two classes.
Conversion
Conversion the general name for converting Real Property into Personal Property or Personal Property into Real Property:
Severance
Severance is the operation whereby real property is converted to personal property:
Cutting down a tree (real property) and converting it into boards (personal property)
Tearing down a barn (real property) and converting it into a stack of boards (personal property)
Annexation
Annexation is the operation whereby personal property is converted into real property.
For example, a landowner buys cement, stones, and sand, mixes them into concrete, and constructs a sidewalk across her land. This landowner has effectively converted personal property (cement, stones, and sand) into real property (a sidewalk).
Fixtures
A fixture is personal property that has been so affixed to land or a building that, by law, it becomes part of the real property.
Examples of fixtures are heating systems, elevator equipment in high-rise buildings, radiators, kitchen cabinets, attached bookcases, light fixtures, and plumbing fixtures. Almost any item that has been added as a permanent part of a building is considered a fixture. During the course of time, the same materials may be both real and personal property, depending on their use and location.
Legal tests of a fixture
The overall test that is used in determining whether an item is a fixture or personal property is a question of intent, in most cases.
At the time a property is listed, the seller and real estate agent should discuss which items will be included in the sale. Any item that the seller does not want included in the sale should be replaced prior to public viewing.
The written sales contract between the buyer and the seller (Agreement between the Parties), should list articles which the buyer and Seller agree can be moved and articles which the Buyer and Seller agree are to remain with the property, to eliminate any doubt as to whether they are personal property or fixtures.
Trade fixtures
A Trade Fixture is defined as Personal Property of a business owner, that, when attached to a rented space or building, remains personal property. Some examples of trade fixtures are bowling alleys, store shelves, bars, and restaurant equipment. Some additional considerations relating to Trade Fixtures are:
Trade fixtures that are not removed become the real property of the landlord.
