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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.
This article discusses the ownership of land using the interpretation of real property as a legal term used in Anglo-American common law jurisdictions. Other legal geopolitical systems of government have different legal interpretations concerning the ownership of land. Terminology varies in these systems, as well: for instance, heritable property in Scotland; immovable property in Canada, United States, India, Malta, Cyprus, most of Europe including Russia, also South America, Malaysia, South Africa, Pakistan, Bangladesh, and many other countries and continents; and immobilier (real estate) in France.
History of the Word
In law, the word real means relating to a thing (from Latin res, matter or thing), as distinguished from a person. Thus the law broadly distinguishes between real property (land and anything affixed to it) and personal property (everything else, e.g., clothing, furniture, money). The conceptual difference was between immovable property, which would transfer title along with the land, and movable property, which a person would retain title to. (The word is not derived from the notion of land having historically been "royal" property. The word royal — and its Spanish cognate real — come from the unrelated Latin word rex, meaning king.)
In modern legal systems derived from English common law, classification of property as real or personal may vary somewhat according to jurisdiction or, even within jurisdictions, according to purpose, as in defining whether and how the property may be taxed.
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.
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.
Two differentiating characteristics of estates in land are their duration and transferability. Some important types of estates include:
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:
The following sections present an overview of real property interests as historically interpreted under British law.
Land 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.
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.
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.
Economic Aspects of Real Property
Because real immovable property is essential for industry or other activity requiring a lot of fixed physical capital, economics is very concerned with real immovable property and rules like the one regarding its valuation and disposition, and obligations accrueing to its owners. In economic terms, real property consists of some natural capital (or land, one of the factors of production especially in agriculture), and infrastructural capital (the buildings, water and power lines, and other improvements necessary to make immovable property useful for some human purpose). Other fixed physical assets, indistinguishable economically from infrastructure, such as machines, may be stored on immovable property and may require natural or infrastructural attributes (such as running water for a turbine or an isolated location to allow loud noise emissions) hard to duplicate even nearby.