Personal property is the collection of items you own that are not attached to land or otherwise fixed in a permanent location. Some examples of personal property include:
- Home furnishings
- Cars
- Clothes
- Any other items that you can easily move
 |
Types of Personal Property
Personal property may be tangible or intangible. Tangible items (also known as a chattel) are physical items that can be seen and touched.
Intangible items, like a business brand or a copyright, are not physical items that can be touched but which have a value to the owner. They can be sold by a person or business to another party. Intangible items are not usually a factor in residential real estate and are more commonly associated with commercial and business estate transactions.
Personal Property Examples
Possessions like couches, TVs, beds, and cars are examples of tangible personal property; they are physical items which can be removed without altering the structure of the home or land on which they reside. These are items that are easily moved from one location to another.
There can be grey areas when deciding if an item should be considered personal property. For example, the seller of a house may wish to keep possession of the custom curtains they had previously installed in the home. The curtains would usually be considered real property and would transfer with the home sale. However, the seller and the buyer may agree that the curtains can be removed by the seller, in which case the curtains would be considered personal property in this particular transaction.
Another example is custom light fixtures installed in a home. Many light fixtures would typically remain with the home, but could be removed without causing damage to the home in some cases. If the seller and the buyer agree that the light fixtures will not be included in the sale of the home, then they are considered personal property.
An example of intangible personal property might be the branding rights of a building. The sale of branding rights is common in sports facilities. For instance, ABC Company may buy the branding rights of a football stadium and for a limited period the building may be called the ABC Stadium. In this case, the company did not purchase the building; they purchased intangible personal property (i.e. the right to have the building named ABC Stadium for some period of time). At the end of the contract, the stadium will change to a different name.
To unlock this lesson you must be a Study.com Member.
Create your account
Real property is land and anything that is permanently attached to the land or is difficult to move. Examples of real property include:
- Homes and buildings with a foundation
- Structures that have altered the landscape, like swimming pools and some hot tubs
- Porches and patios
- Permanently installed surround sound systems
- Detached garages and carports
Personal property is not attached to a permanent location and can be removed easily or with minimal effort. When these items are removed, it will not result in damage to the property. Personal property can be tangible or intangible. Examples of personal property include:
- Furniture such as couches, beds, and dressers
- Televisions and portable entertainment equipment
- Small appliances such as microwaves, printers, computers and radios
- Branding rights and intellectual property
- Stocks and bonds
- Money
To unlock this lesson you must be a Study.com Member.
Create your account
Two types of property exist: personal and real property. Real property includes real estate, which is the land and all permanent structures attached to that land, such as homes, garages, or swimming pools. It also includes an important bundle of rights which come with the ownership of that real estate, such as the right of possession and the right of control. Real estate may be further classified as a freehold estate (property of which an individual has long-term ownership) or a non-freehold estates (property that is rented or leased).
Personal property is any possession that can easily be moved and that is not fixed in a permanent location. It is typically something that remains with an individual rather than with a piece of land or permanent structure. This may include furniture, clothing, cooking tools, and small appliances.
To unlock this lesson you must be a Study.com Member.
Create your account
Video Transcript
Property
There are two types of property. In legal terms, all property will be classified as either personal property or real property. This distinction between types of property comes from English common law, but our modern laws continue to distinguish between the two.
Each type of property is treated differently under the law. There are many different types of laws that specifically pertain to personal property, and many other types of laws that pertain specifically to real property.
Personal property is movable property. It's anything that can be subject to ownership, except land. Real property is immovable property - it's land and anything attached to the land.
Normally, a piece of property can be easily classified as either personal property or real property. The difference between the two is usually fairly straightforward. However, sometimes it's a little harder to categorize property. Let's look at one example.
Let's say that I buy lumber and other building supplies, such as a saw, a hammer, and some nails. These supplies are personal property. They're moveable and they belong to me.
Next, I use these items to build a shed on my land. Is this shed personal property? No. The shed is real property because it's attached to, and now part of, my land. Any leftover building supplies are still personal property, like my saw and hammer. But anything that's actually part of the shed is now real property.
Personal Property
Let's take a closer look at why this is. Let's look at the types of items that are classified as personal property.
Personal property includes possessions, of really any kind, as long as those possessions are movable and owned by someone. Personal property isn't affixed to or associated with land. These moveable items are sometimes known as chattels. The law regarding chattels includes those laws covering possession, gifts, lost property, abandoned property, and stolen property.
It's helpful to note that personal property includes both tangible and intangible items. A tangible item is an item that can be felt or touched. For a business, tangible personal property includes items the business owns such as:
- Office furniture
- Business equipment
- Business vehicles
- Business goods
An intangible item is simply an item that can't be felt or touched. For a business, intangible personal property includes items the business owns such as:
- Stocks
- Bonds
- Intellectual property
- Money
Real Property
The key difference between personal property and real property is that real property is fixed permanently to one location. This includes land and anything that is built on the land. It also includes anything that's growing on the land or that exists under the face of the land. For a business, real property includes immovable property that the business owns, such as:
- Land
- Buildings
- Crops
- Mineral rights
For example, let's say that I'm in the farming business; I own a large piece of land. On the land, I have a house, a barn, a grain silo, and a stable. Each of these items is a piece of real property, because these items are attached to the land.
Since real property includes everything growing on my land, my real property includes my crops. Once cut, these crops become a moveable good. But while these crops are growing on my land, they are a part of my real property.
Let's also say that, while digging a freshwater well, I found oil under my land. Is this also my real property? Yes. My real property includes the rights to anything found under the surface of my land. This is a common concept when discussing rights to water, oil, or minerals found under the surface.
Real property also includes any items attached to real property and considered legally part of the real property. These items are known as fixtures. Fixtures are items that would normally remain in place when an owner of real property moves. My barn, house, silo, and stable are all fixtures. But fixtures can also be smaller items. Let's glance into my farmhouse and see what other fixtures I have. Fixtures are such things as:
- Ceiling fans
- Chandeliers
- Appliances
As you can see, sometimes real property rights are complicated. There are many different laws that pertain specifically to real property. These laws include those that cover types of estates, types of ownership, easem*nts, conveyances, and leases.
Lesson Summary
Let's review. Much of business law deals with property. There are actually two different types of property. In legal terms, all property will be classified as either personal property or real property. Personal property is movable property. It's anything that can be subject to ownership, except land.
It's helpful to note that personal property includes both tangible and intangible items. A tangible item is an item that can be felt or touched. An intangible item is simply an item that can't be felt or touched.
Real property is immovable property. It's land and anything attached to the land. This includes fixtures. Real property also includes items that grow on, or can be found underneath, the surface of the land.
Learning Outcome
After watching this lesson, you should be able to compare and contrast between two types of property: personal and real.
To unlock this lesson you must be a Study.com Member.
Create your account
