Real Property and Personal Property

Real and personal property: the basic distinction

According to Cornell’s Wex, “A fundamental distinction in property law is between real property (land and things permanently attached to it) and personal property (movable items).” Personal property “is any movable thing or intangible item of value that is capable of being owned by a person and not recognized as real property,” and is “Synonymous with chattel.”

Why it matters

• Transfer. Land passes by a written deed recorded in the county records; most personal property passes by delivery or a bill of sale.
• Security interests. Liens on land are mortgages or deeds of trust. Security interests in personal property fall under UCC Article 9, which “applies to … a transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract” (UCC § 9-109(a)(1)).
• Titled vehicles. For cars, boats and similar property, state certificate-of-title laws control how a lien is perfected (UCC § 9-311(a)(2)).
• Taxes and estates. States tax and probate the two kinds of property under different rules.

Bailment

Possession can be separated from ownership. A bailment “is defined as a non-ownership transfer of possession” (Wex); for example, leaving a car with a valet or a coat with a cleaner. The bailee must take reasonable care of the property and return it.

Researching real and personal property in your state

First, find the statute or rule that governs real and personal property where you live. State law controls most of these questions, so the answer can change from one state to the next. Next, read recent decisions from the appellate courts in your state. They show how judges apply the law today. Also, check the local rules of the court that would hear your case. Our state procedures guide links to each state’s official rules. In addition, the Research Center explains how to confirm a source is still good law.

Sources and further reading

Official sources used on this page:

• law.cornell.edu
• law.cornell.edu
• law.cornell.edu
• law.cornell.edu

Related reading on Lawtopolis:

• Estates in Land and Co-Ownership: Fee Simple, Life Estates, Joint Tenancy
• Deeds and Recording Acts: Warranty Deeds, Quitclaim Deeds and Race-Notice Rules
• Automobiles as "Consumer Goods" and "Household Goods": The UCC, Customs and Will Cases