Unit 1: Real Property & The Law

Terms in this set (44)

Land is the earth's surface, the mineral deposits under the surface, and the air above it. Real estate further expands this definition to include all natural and man-made improvements attached to the land. Real property describes real estate plus the bundle of legal rights associated with its ownership.

Different parties may own different rights to the same parcel of real estate: one owning the surface rights, one owning the air rights, and another owning the subsurface rights.

All property that does not fit the definition of real property is classified as personal property or chattels. When articles of personal property are affixed to land, they may become fixtures and as such are considered a part of the real estate. However, personal property attached to real estate by a tenant for business purposes is classified as a trade, or chattel, fixture and remains personal property.

The special nature of land is apparent in both its economic and its physical characteristics. The economic characteristics consist of scarcity, improvements, permanence of investment, and area preferences. Physically, land is immobile, indestructible, and unique.

Even the simplest real estate transactions reflect a complex body of laws. Laws that affect real estate include contracts, property, agency, state and local land-use and zoning laws, and federal and state environmental regulations and tax law.

Every U.S. state and Canadian province has some type of real estate licensing requirement. Students should become familiar with the licensing law in Pennsylvania.