Real Property

The term real property refers to land, and any buildings, structures, and equipment permanently attached or fixed to the land. Ownership of real property also addresses ownership of whatever is growing on, or lies beneath the land. Often referred to as “real estate,” real property is one of the most important, and most lucrative, items bought, sold, and traded in the United States. The laws regarding the buying, selling, and use of real property vary by state, but in each case, real property is distinguished from personal property and intellectual property. To explore this concept, consider the following real property definition.

Definition of Real Property


  1. Property including land, and all appurtenances, buildings, crops, mineral and water rights that are a part of it.


1760-1770        Middle English

What is Real Property

Historically, according to British common law, real property is a subunit of property. Property is defined as a subset of land that has been legally defined, and that has been, or may be improved through human efforts. Improvements that may be made to classify a legally defined plot of land as “real property,” may include such endeavors as buildings and other structures, as well as wells, canals, ponds, dams, and roads. In addition, anything that grows upon the land is subject to ownership of the land itself. This might include forested property and crops. Real property laws protect the status of real property when it comes to the real estate market.

Real Property Law

With the exception of Louisiana, every state in the U.S. has specific real property laws governing real property and the estates they include. While such laws vary by jurisdiction, by definition, real property includes the land, as well as anything that is fixed to the land, such as buildings and fixed equipment. In some states, whatever lies beneath a plot of land is part of that real property. In other states, whatever lies beneath, or passes through, a property may be subject to different laws, and could be under separate ownership. This includes such things as valuable ore, precious gems and metals, and even water. Control or ownership of these items may be contained in specific mineral rights, water rights, or other documents, all of which are filed with the county recorder.

For Example:

Billy and Samantha buy a two-acre piece of land with the intention of building their dream home in the country. As part of their landscape construction, the couple plans to dam up a small stream that runs through the property to create a large pond. Unfortunately, after putting in a lot of work to create a lovely, peaceful water feature, they are notified that they have no right to dam up the stream, as the property owner downstream owns the rights to that water for watering his livestock. Billy and Samantha consult with a local attorney and are disappointed when she confirms that, while they can use the water as it travels across their land, they cannot use it all, nor can they divert or dam the stream.

Water and mineral rights are very important issues that should be disclosed during the purchase negotiations of any real property, and are required to be specified on the property’s deed.

Real Property vs. Personal and Intellectual Property

The term personal property refers to any physical item that can be owned, that is not fixed to real property. This includes anything from home furnishings, clothes, and jewelry, to cars, pets, tools, and appliances.

The term intellectual property refers to any non-tangible item that can be owned or traded, such as music, literature, designs, and other artistic works. Intellectual property also refers to patents, trademarks, and copyrights.

For example:

Anton and Marie own their home and the land on which it sits. This property, as well as rights to the water and minerals that may be beneath the land are considered real property. The furnishings, appliances, and everything inside the home, as well as their two cars parked in the driveway, are personal property.

Anton is a musician, supporting his family by writing songs, which he sells or licenses to other musicians. All of Anton’s written endeavors are protected by copyright, which is not something he can hold or touch, meaning it is intangible. Anton’s copyrighted works are considered to be intellectual property.

Types of Real Property Ownership

Real property can be owned in a number of ways, meaning that the owner has certain specific rights and responsibilities depending on the type of real property ownership he holds. The most common types of real property ownership include:

  • Tenancy in Severalty – in direct opposition to how this term sounds, it refers to ownership of a piece of real property by a single person or corporation.
  • Tenancy in Common – ownership interests held in a single property by two or more people. When one co-owner, or “tenant in common,” dies, his share of the property may be left to his heirs.
  • Joint Tenancy – ownership interests held in a single property by two or more people, having acquired their interest in the property at the same time, on the same deed. If one co-owner dies, his portion of the property automatically transfers to the remaining co-owners.
  • Tenancy by Entirety – a form of ownership available only to married couples, in which the property cannot be sold without the agreement of both parties, and should one spouse die, his ownership interest goes directly and solely to the surviving spouse.

What is an Estate

In relation to real property, the term estate refers to the interest, or degree of ownership, an individual holds in real property. In fact, this is where the term real estate originates. Generally speaking, estates are classified as either “freehold,” or “less-than-freehold,” each providing the owner varying rights.

Freehold Estate

A freehold estate is a type of estate in which a person or corporation has ownership for an indefinite amount of time. There are three times of freehold estate:

  • Fee Simple Absolute – a type of ownership in which the owner has the greatest interest in the parcel of land possible. Fee simple ownership is absolute, limited only by the government’s powers of taxation, eminent domain, police power, and escheat.
  • Fee Simple Defeasible – a transfer of ownership of real property on which certain conditions have been placed. In the event the conditions are not met, the property reverts back to the original owner, or “grantor.”
  • Life Estate – ownership of a property held while the individual is alive, but which reverts back to the original owner, or grantor, upon the life estate owner’s death.

Less Than Freehold Estate

A less than freehold estate, also known as a “leasehold estate,” is real property held by a person who rents or leases, but does not own, property. In a less than freehold estate, or leasehold estate, the tenant has the right to occupy the property, though the property automatically reverts back to the owner after the lease has expired.

  • Estate for Years – a tenancy interest in a property for a fixed and specified period, usually for years.
  • Periodic Tenancy – a tenancy interest that is not for a specific time period, but held from month-to-month, or year-to-year, being renewed at the end of each cycle.
  • Estate at Will – a tenancy interest that can be ended at any time, at the discretion of the property’s owner.

Real Property Tax

Real property taxes are those imposed by state and local governments on all real property within their jurisdictions. Real property taxes are calculated as a percentage of the assessed value of the property, and the monies raised by real property taxes are commonly used to pay for local services, such as utilities upgrades and maintenance, schools, and roadways. A potential buyer can find out if there are outstanding taxes owed on a property by performing a real property search.

Real Property Search

Real property documents are kept on file with the county recorder’s office, and are a matter of public record. Anyone may go to the recorder’s office to research the title, ownership, and transfer of any property that lies within that county. Some county recorders have made their records available online for easy access. Performing a real property search provides the interested party with information regarding the status of the property’s title, whether any liens have been recorded against the property, whether the property has any easements, and sometimes whether there are any unpaid taxes levied against the property. Real property searches are generally available at no cost, and can be performed by anyone armed with the property’s street address, though the Assessor’s Parcel Number (“APN”) may be helpful.

Related Legal Terms and Issues

  • Escheat – The reversion of property to the state when the owner dies without legal heirs.
  • Jurisdiction – The legal authority to hear legal cases and make judgments; the geographical region of authority to enforce justice.
  • Lien – The legal claim of one person or entity upon the property of another person to secure the payment of a debt, or the satisfaction of an obligation.
  • Personal Property – Any item that is moveable and not fixed to real property.
  • Real property – Land and property attached or fixed directly to the land, including buildings and structures.
  • Title – A claim to ownership of land or other property.