Land is defined as the earth’s surface extending downward to the center of the earth and upward to infinity.
Land includes not only the surface of the earth but also the underlying soil. Land also refers to objects that are naturally attached to the earth’s surface, such as boulders and plants. Land includes the minerals and substances that lie far below the earth’s surface (subsurface). It even includes the air above the earth, all the way up into space (airspace).
Real Estate is defined as land at, above, and below the earth’s surface, plus all things permanently attached to it.
The term Real Estate is similar to the term land, but it means much more. Real Estate includes natural land, along with all human-made improvements. An improvement is any artificial addition to land, such as a building or a fence. The term improvement, as used in the Real Estate industry, refers to any addition to the land. Land also may be improved by streets, utilities, sewers, and other additions that make it suitable for building.
An apartment building would be considered an improvement, along with any landscaping, fencing, sidewalks, or sewer utility lines running to the building from the street or nearest utility distribution point, if located in the suburbs.
Real property includes the surface, subsurface, airspace, any improvements, and The Bundle of Legal Rights—the legal rights of Ownership that attach to the Ownership of a parcel of Real Estate.
When consumers talk about buying, selling, or leasing homes, office buildings, apartment buildings and land, they often will call all of these properties Real Estate. For practical purposes, the term is synonymous with real property as defined here. In everyday usage, then, remember that Real Estate has come to include the legal rights of Ownership specified in the formal definition of real property.
The concept of Real Property is important for Leasing Agents because later on we will see that when an Owner leases property to a Tenant, he is passing over several rights associated with Real Estate, to the Tenant, on a temporary basis. Because the law recognizes the rights included in the “Bundle of Rights”, the ability of an Owner to transfer some or all of these rights on a permanent basis, this provides the legal basis for the ability of a Landlord to lease or rent a property to a Tenant for a period of time, without losing those rights.
Land: no improvements
Real Estate: land with improvements
Real Property: land with improvements plus bundle of rights