Definition of real estate
What is real estate?
Real estate is a piece of land and everything permanently attached to it. The owner of real estate has all property rights, including the right to own, sell, rent and enjoy the land.
Real estate can be classified according to its general use as residential, commercial, agricultural, industrial or special purpose. In order to understand if you have the right to sell your home, you need to know what rights you do or do not have to the property.
Key points to remember
- Real estate is defined as land at, above and below the surface of the earth, including all things permanently attached to it, whether natural or man-made.
- For practical purposes, the term real estate is synonymous with immovable property.
- Personal property is defined as any property that does not meet the definition of real property, such as clothing, cars, and furniture.
Understanding real estate
To understand how real estate is defined, it helps to start with land and real estate. Earth is the surface of the earth extending downward to the center of the earth and upward to infinity, including everything permanently attached by nature (or at least attached in foreseeable future), such as rocks, trees and water.
Earth also includes the minerals below the earth’s surface and the airspace above the earth.
In contrast, real estate is defined as the land at, above, and below the surface of the earth, including anything permanently attached to it, whether natural or artificial.
Therefore, the definition of real estate extends to all artificial and permanent improvements to the land such as streets, utilities, sewers, fences and buildings.
Real estate ownership is a broader term than real estate, as it encompasses the interests, benefits, and rights inherent in the ownership of real estate.
The term immovable property in the broad sense includes the physical land (the surface and what lies below and above it), everything permanently attached to it, whether natural or artificial, as well as all rights ownership, including the right to own, sell, rent, and enjoy land.
Each state has its own laws regarding what real estate is and how to handle its sale. For the most part, real estate is not subject to federal law because, by definition, real estate does not cross state lines.
Estates in real estate
The amount and type of interest a person has in real estate is called a “land estate”. Land estates are divided into two main categories: freehold estates and non-freehold estates.
Freehold estates imply ownership. They have an indefinite duration and can last a lifetime or forever. Here are examples of freehold domains:
- single fee. The holder of an estate in fee simple is entitled to all rights in the property. This is the highest type of real estate interest recognized by law. The estate is of unlimited duration, and on the death of the owner, the estate passes to the owner’s heirs.
- Life estate. A life estate is limited in duration to the life of the owner, or the life or lives of other named persons. Unlike a fee simple estate, a life estate is not considered an hereditary estate.
Non-freedom estates involve leases. They cannot be passed on to an heir and they exist “without seizin” – or without ownership. Also known as a leasehold domain, non-freehold domains are created through written and oral leases and tenancy agreements.
Here are examples of non-free domains:
- Rental for years. This is a domain created by a lease that has a defined start and end. The lease ends automatically on the end date indicated. Also called domain for years.
- Rental from period to period. This domain exists when the lease is for a fixed initial term but is renewable by tacit agreement for an indefinite period unless terminated by the owner or the tenant with notice. Also called year-to-year domain.
- Rental at will. This type of lease can be terminated at any time by the owner or the tenant. Also called domain at will.
- Rent to tolerance. This is the lowest form of inheritance known to law. It exists indirectly due to circumstances and is never deliberately created. This occurs when a person who previously had a legal right to use the property remains on the property without having the legal right to do so and without the owner’s consent. The only difference between a delinquent tenant and a trespasser is that the former had a right to be on the property at one time, but remained beyond the terms of the lease or agreement. Also called tolerance domain.
Real Estate vs. Personal Property
The law makes a clear distinction between real property and personal property. Real estate is a building. It includes the land, all that is permanently attached to it, and the rights that “run with” the land.
Personal property, on the other hand, is movable. It is defined as anything that is not real property, such as your clothes, furniture, cars, boats, and any other movable item that is not attached to real property.
Real estate vs real estate
Real estate is land at, above and below the earth’s surface, including anything permanently attached to it, whether natural or man-made. Real estate ownership is everything included in real estate, plus property rights, including the right to own, sell, rent and enjoy the land.
What is real estate versus real estate?
The terms are used interchangeably, but real estate ownership is actually a broader term. Real estate is defined as land and everything attached to it. Real estate ownership extends to the interests, benefits and rights inherent in the ownership of real estate.
What are some examples of real estate
A natural formation like a hill or a pond can be real property. The same goes for a man-made addition like a house, driveway or garden shed. If someone owns the land on which some or all of these things are located, that person has the right to use, manage and dispose of it.
These rights are given to us by English common law. They are, of course, limited by state and local laws. You may own a barn, but if you decide to open it as a weekend party house, local zoning laws and your neighbors may have a say in the matter.
is a car real estate?
A car is tangible personal property, not real estate, because the car can presumably be moved. Unlike many personal assets, a car can be used to secure a loan. A car loan is secured by the vehicle, like a mortgage is secured by a house.