The Real Estate Exists

Physical and legal aspects of real estate

For most situations, the term "property" means a physical or tangible thing. However, property can be more broadly defined, focusing on the rights which arise out of the object. Thus, property is referred to as a bundle of rights, which for the purposes of this material is real estate.
  

Further, property is anything which may be owned. In turn, ownership is the right to possess the property owned and use it to the exclusion of others. [Calif. Civil Code §654]

The right to possess and use property includes the rights to:  

• occupy;
• sell or dispose;
• encumber; or
• lease.

Property is divided by types into two primary categories:  

• real estate, also called real property or realty; and
• personal property, also called personalty. [CC §657]

Real estate is characterized as immovable, whereas personal property is movable. [CC §§659, 657]

Personal property is defined, by way of exclusion, as all property which is not classified as real estate. [CC §§658, 663]

While the distinction between real estate and personal property seems apparent at first glance, the difference is not always so clear.

Cutting up the real estate 

Real estate may be physically cut up by severance of a part of the earth (i.e., removal of minerals). Title to real estate may also be cut up in terms of time, providing sequential ownership.

For example, fee ownership may be conveyed to one person for life, and on their death, transferred by the fee owner to another. Time sharing is another example of the allocation of ownership by time, such as the exclusive right to occupy a space for only three weeks during the year.

Title to real estate may also be fractionalized by concurrently vesting title in the name of co-owners, such as tenants-in-common, who each hold an undivided (fractional) ownership interest in the real estate.

Possession to real estate may be cut out of the fee ownership and conveyed for a period of time. For instance, the fee owner of real estate acting as a landlord conveys possession of the property to a tenant under a lease agreement for a fixed term, called a tenancy. When the tenancy expires or is terminated, possession of the property reverts to the landlord. The landlord retains fee title to the real estate at all times, subject to the lease.

Possession may also be cut up by creating divided interests in a property, as opposed to undivided interests. For example, an owner may lease a portion of their property to a tenant. The tenant, in turn, may sublease a portion of their space to yet another person, known as a subtenant.

Other non-possessory interests in real estate may be created, such as liens. Liens are interests in real estate which secure payment or performance of a debt or other monetary obligation, such as a:

• trust deed lien; or
• local property tax lien.

On nonpayment of a lien amount, the lienholder may force the sale of the real estate to pay off and satisfy the lien.

Thus, an owner's rights in a parcel of real estate extend beyond the mere physical aspects of the land, airspace and improvements located within the legally described boundaries of the property.