Property Law Guide

Property designates those things commonly recognized as the entities in respect of which a person or group has exclusive rights. Important types of property include real property (land), personal property (other physical possessions), and intellectual property (rights over artistic creations, inventions, etc.). A right of ownership is associated with property that establishes the good as being "one's own thing" in relation to other individuals or groups, assuring the owner the right to dispense with the property in a manner he or she sees fit, whether to use or not use, exclude others from using, or to transfer ownership.

Real Property

Real property is a legal term encompassing real estate and ownership interests in real estate (immovable property). It is a type of property differentiated from personal property.  In the United States, each state has its own real immovable property law.  All states except Louisiana rely on variations of common law for the basis of their real immovable property laws. Louisiana's laws are derived from Napoleonic Code but have adopted some of the common law terms over the years.

Relationship To Owner

Real property is not just the ownership of property and buildings — it includes many legal relationships between owners of immovable property (real estate) that are purely conceptual such as the easement, where the owner of one property may have some right on a neighbouring property, right-of-way, or the right to pass over a property, and incorporeal heridiments such as profit a prendre. Real property can also be held in various ways. In some jurisdictions real property is held absolutely, in England it may still be considered to be carved out of Crown's ownership of all property in the realm. Such distinctions are important in terms of the law of escheat or when property reverts to the state because it lacks an owner or has been abandoned.

Definitions

An important area of real immovable property are the definitions of estates in land. These are various interests that may limit the ownership rights one has over the land. The most common and perhaps most absolute type of estate is the fee simple which signifies that the owner has the right to dispose of the property as she/he sees fit. Other estates include the life estate where the owner's rights to the property cease at their death and fee tail estates where the property at the time of death passes to the heirs of the body (i.e. children, grandchildren, descendants) of the owner of the estate before he died.

In the law of almost every country, it is the state that is the true owner of all land within its territory, because it is the sovereign, or supreme lawmaking authority over it. Individuals don't "own" their land, but only "estates" in the land, also known as "equitable interests", such as the transferrable right to use and exclude others from use.

Estate Law

Estates may be held jointly as joint tenants with rights of survivorship or as tenants in common. The difference in these two types of joint ownership of an estate in land is basically the inheritability of the estate. In joint tenancy (sometimes called tenancy of the entirety when the tenants are married to each other) the surviving tenant (or tenants) become the sole owner (or owners) of the estate. Nothing passes to the heirs of the deceased tenant. In some jurisdictions the magic words "with right of survivorship" must be used or the tenancy will assumed to be tenants in common. Tenants in common will have a heritable portion of the estate in proportion to their ownership interest which is presumed to be equal amongst tenants unless otherwise stated in the transfer deed.  Real property may also be owned jointly through the device of the condominium or cooperative.

Types of Ownership Interests

The law recognizes different types of ownership interests in real property. These different interests, called "estates," encompass different rights. The type of estate held by a landowner is generally determined by the language of the grant through which the landowner acquired the land.

Estates In Land

Two differentiating characteristics of estates in land are their duration and transferability. Some important types of estates include:

1. Fee simple: This most common estate lasts forever and can be freely transferred.
2. Life estate: This estate lasts for the grantee's life. The grantee is called a "life tenant." Though it can generally be sold, sale does not change its duration, which must always be limited by the original grantee's life.
3. Leasehold: Leasehold estates are estates of limited duration. For example, an apartment-dweller with a one year lease has a leasehold estate in her apartment. Often, leasehold tenants must pay rent.

Future Interests

If an estate is of limited duration, whoever will take ownership of the land upon its termination has a "future interest." Two important types of future interests are:

1. Reversion: A reversion arises when a tenant grants an estate of lesser maximum duration than his own. Ownership of the land returns to the original tenant when the grantee's estate expires. The original tenant's future interest is a reversion.
2. Remainder: A remainder arises when a tenant with a fee simple grants someone a life estate, and specifies a third party to whom the land goes when the life estate ends. The third party is said to have a remainder. The third party may have some legal rights to limit the life tenant's use of the land.

Personal Property

Personal property is a type of property. In the common law systems personal property may also be called chattels. It is distinguished from real property, or real estate. In the civil law systems personal property is often called movable property or movables - any property that can be moved from one location to another. This term is in distinction with immovable property or immovables, such as land and buildings.  Personal property may be classified in a variety of ways, such as money, negotiable instruments, securities, goods, and intangible assets including chose in action.  Accountants also distinguish personal property from real property because personal property can be depreciated faster than improvements (while land is not depreciable at all). It is an owner's right to get tax benefits for chattel, and there are businesses that specialize in appraising personal property, or chattel.

The distinction between these types of property is significant for a variety of reasons. Usually one's rights on movables are more attenuated than one's rights on immovables (or real property). The statutes of limitations or prescriptive periods are usually shorter when dealing with personal or movable property. Real property rights are usually enforceable for a much longer period of time and in most jurisdictions real estate and immovables are registered in government-sanctioned land registers. In some jurisdictions, rights (such as a lien or other security interest) can be registered against personal or movable property.

In the common law it is possible to place a mortgage upon real property. Such mortgage requires payment or the owner of the mortgage can seek foreclosure. Personal property can often be secured with similar kind of device, variously called a chattel mortgage, trust receipt, or security interest. In the United States, Article 9 of the Uniform Commercial Code governs the creation and enforcement of security interests in most (but not all) types of personal property.

There is no similar institution to the mortgage in the civil law, however a hypothec is a device to secure real rights against property. These real rights follow the property along with the ownership. In the common law a lien also remains on the property and it is not extinguished by alienation of the property; liens may be real or equitable.

Many jurisdictions levy a personal property tax, an annual tax on the privilege of owning or possessing personal property within the boundaries of the jurisdiction. Automobile and boat registration fees are a subset of this tax. Most household goods are exempt as long as they are kept or used within the household; the tax usually becomes a problem when the taxing authority discovers that expensive personal property like art is being regularly stored outside of the household.

Intellectual Property

In law, intellectual property (IP) is an umbrella term for various legal entitlements which attach to certain names, written and recorded media, and inventions. The holders of these legal entitlements may exercise various exclusive rights in relation to the subject matter of the IP. The term intellectual property reflects the idea that this subject matter is the product of the mind or the intellect. The term implies that intellectual works are analogous to physical property and is consequently a matter of some controversy.  For more information on intellectual property, see our Intellectual Property Guide.