Question

Discuss the differences between real and personal property. What are the fundamental distinctions? How does tangible property differ from intangible? Can real property become personal property and vice versa? If so, give examples. And, what characterizes a fixture?

Answer 1

Distinction between Real property and personal property

1. Real property is immovable in nature. Real property can be described as land and anything that is attached permanently to land, it includes building, windows, doors, furniture , fixtures etc. lets say wood, building material or steel are not real property in themselves but becomes real property when attached to land i.e real property

Personal property is of movable kind. It is not affixed or attached to land, everything other than real property is personal property therefore it includes belongings of any kind so long as they are movable and owned by someone e.g books, vehicles, gadgets, insurance policy, bank accounts, stocks etc

2. Real property is mostly tangible in nature whereas personal property may be tangible or Intangible.

3. Real property is generally not destructible or long lasting or durable while personal property can be durable or may destroy after sometime or can be destroyed e.g if smartphone falls out of your pocket then it can break easily.

4. Real property cannot be kept hidden e.g you cannot hide your building while personal property can be kept hidden e.g we do not share our bank account details to everyone and it is possible to hide this.

Difference between tangible and Intangible property as follows

Tangible property has physical substance i.e it can be touched e.g Machinery, laptop, bike etc whereas Intangible property has no physical substance i.e It can cannot be touched e.g Goodwill, patent, Copyrights etc This is the only difference between between tangible and Intangible property

Conversion of Real property in to personal property

Real property is converted into personal property through an act of severance ( actual or constructive ) e.g If a tree affixed on land is separated from land then it becomes personal property whereas personal property can also be converted into real property e.g If Furnace ( personal property ) is installed on land ( Real property ) then Furnace becomes a part of land and hence it is also real property.

Explanation of the term Fixture

Any physical property that is permanently attached to real property ( generally land ) is called Fixtures. Fixture is a part of real property especially in case of security interest. e.g Furniture inside the house etc . But the most important thing is how do we test the fixtures ? so the the most important test for anything to be qualified as fixture is the method by which it has been attached to real property e.g use of cement, glue , nuts and bolts indicates the permanent fixation hence if furniture is fixed using bolts and nuts then its a fixture otherwise it will not be qualified as fixture.