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The Differences Between Real Property and Personal Property

The ability to properly categorize property is essential in real estate law. Property falls into two categories: real property (or real estate or realty) and personal property. Real property is land and improvements to the land. It is also structures on the ground, called “improvements.” An improvement is any permanent structure or work on a property that increases the property’s value, like fixtures. Personal property is all property other than real property.

Our Seattle real estate attorney can answer your questions about real property, and you can also learn more details about the differences between real and personal property. When speaking of property, it is important to distinguish what type of property we are talking about. Generally speaking, property falls into one of two categories: real property, which may alternatively be referred to as real estate or realty, and personal property.

Our Seattle Real Estate Attorney Explains the Definition of Real Property

Real property is what you might expect – land and improvements to the land. In its most broad sense, land encompasses any soil, ground, or earth. This may include fields, pastures, rivers, trees, bushes, marshes, or any other natural feature connected to or part of the ground. Real property is not mere earth alone, however.

Commonly, real properties contain structures on them, called “improvements.” Improvements are roughly defined as any permanent structure, building, or work on a property that increases the property’s value. These are not natural features of the land; they are created on or brought to the land by labor. Examples of structures or buildings under the legal definition of improvements include homes, detached garages, barns, factories, sheds, chicken coops, grain elevators, churches, strip malls, and radio towers. Work on the property under the definition of improvements may include things such as planted trees or crops, fences, canals, or man-made ponds. Fixtures are also a form of improvement – more on that later.

If you have questions about your property because you are unsure if it falls under the legal description of real property, we can help. Contact our real estate attorney to discuss your situation.

How Personal Property Is Distinguished from Real Property

Personal property, as distinguished from real property, is broadly defined as all property other than real property. Some obvious examples of personal property include books, cars, jewelry, computers, furniture, stamp collections, cell phones, and heirloom doilies. (Even currency – money – is considered personal property.) These types of personal property fall within the category of tangible personal property, as distinguished from intangible property. Intangible property includes intellectual property, such as patents and copyrights, corporate stock, and even things as nebulous as reputation or brand identity.

Most of the time, distinguishing between real and personal property is straightforward. However, there is ambiguity between the two where personal property gets attached to real property, essentially becoming a permanent part of it. This type of property is referred to as a fixture. Fixtures include things like lights, stoves, certain appliances, water faucets, or fireplaces. These items do not become part of the real estate until they have been irremovably attached to the property by labor, satisfying a three-part legal test.

By way of example, a brick you bought at Home Depot sitting in the bed of the truck parked in your driveway is personal property. But as soon as the brick is laid in the construction of the fireplace in the living room, the brick becomes a fixture of the real property and loses its identity as a separate item of personal property. The practical implication of this is that once the personal property becomes part of the real property as a fixture, it may no longer be removed from the real property without causing damage, in a legal sense, to that property.

Discrete legal differences like these can be challenging to understand. Our Seattle real estate attorneys at Dickson Frohlich Phillips Burgess are trained to understand the idiosyncrasies of real estate law.

While all of this may seem a little complicated, the ability to properly categorize property is an essential element in most areas of law, particularly within our law firm’s specialties. Thus, even though a real estate lawyer, technically, has experience in real estate law matters, he or she should have a strong understanding of the various differences in the character and nature of the property as a whole. At Dickson Frohlich Phillips Burgess, our Seattle real estate attorneys focus on real estate law and understand the intricacies of unique situations. We also practice in related civil areas of law and have the knowledge to recognize how your legal matter may be impacted by a range of factors.