Working in real estate I hear a lot of questions from home buyers about purchasing a home. One of the most common questions I get when looking at homes with buyers is, “Will this item (tv, shed, stereo equipment etc.) come with the home?”
Of course many homes on the MLS (multiple listing service) will spell out in the listing information things included with a property. Some of these common items include dishwasher, cooking range, refrigerator, microwave, laundry machine and dryers.
But to answer the basic question of, “What will I be getting when I purchase this home” we will need to discuss what real property is.
The definition of real property includes the rights that come with the property and also the different forms of real property when talking about real estate.
Real property is descirbed as a bundle of rights that includes the 5 legal rights of ownership: 1. right of possession 2. right of enjoyment of the property 3. right to control the property’s use 4. right to exclude others from the property and 5. right to dispose of the property.
In California the term real property is synonymous with the term real estate. The California Civil Code definition of real property includes all of these elements: land, fixtures (attachments) to land, anything incidental or appurtenant to land, and anything immovable by law.
Land is the soil, the material that makes up earth. Land includes the substances beneath the surface that extend to the center of the earth and include oil, gas, and water.
Fixtures are anything, including improvements that are attached (affixed) to land. A fixture can be attached by its roots (trees & shrubs) or imbedded in the land (walls). A fixture might also be something permanently resting on the land, such as a building. A builidng would include all things customarily considered permanently attached to it, such as siding, plaster, nails, doors, and windows.
Appurtenances to land is anything used with the land for the benefit of its owners, such as a roadway or waterway. Examples of appurtenances are some rights of way and condominium parking spaces. An appurtenance is said to “run with the land” because it is transferred when the land is transferred. For example when a condo is sold the parking spot goes to the new owner as well. Another example is if you buy a home that has an easement (the right to use) over someone else’s land, need to use a private road or driveway to get to your home, that privelage is transferred as well.
All real property: Land, Fixutres, Appurtenances, and anything Immovable will be transferred from seller to buyer unless negotiated out of the contract.
99% of the time buyers have questions about real property it is about fixtures, when is something really affixed to the property?
Fixtures are personal property before being attached to the land, but what kind of attachment will convert personal property to real property. California courts use five general tests in determing whether a specific thing is a fixture, considered a permanent attachemnt to land.
Tests for a Fixture
- Method by which the thing is affixed. The greater the degree of permanence in the attachment, the more likely it is a fixture. Example: patio attached by concrete vs screened enclosure fixed down with tent stakes.
- Adaptability of the thing for the land’s ordinary use. The better adapted, the more likely it will be considered a fiexture. Example: A custom fitted item, such as a swimming pool cover, would fall into this category.
- Relationship of the parties. If a residential tenant attaches something to the premises, there will be a presumption that it is personal property and removable.
- Intent in placing the item on the land. This is the most important consideration. The intent may be for reasons of health and safety rather than to improve the property, such as installation of a fire extinguisher.
- Agreement of the parties. If the parties are knowledgeable, they can avoid ambiguities by specifying in writing whether various items are fixture or personal property and how those items will be affected by the transaction.
In this example the lights, tv, and seats would stay depending on how securely they are attached. The speakers, dvd player, and receiver will be taken with the owner as personal property. This is only if the contract does not talk about how personal property will be handled.
Because of the many legal and tax situations that can arise through the sale and purchase of real estate ALWAYS consult with your ATTORNEY or ACCOUNTANT before making ANY decisions in ANY transaction
* THIS ARTICLE WAS POSTED AT Thomas Feng’s Bay Area Real Estate Blog *