Real Estate Notes
Real property, or realty, includes land, anything permanently attached to the land, and anything incidental or appurtenant to it. Incidental means something that accompanies but isn’t a major part, while appurtenant means belonging to the land. Personal property, also called chattels or personalty, is everything that isn’t real property. It is usually movable, such as furniture, vehicles, or equipment.
A property owner holds a “bundle of rights,” which includes the right to possess, use, enjoy, encumber, will, sell, or even do nothing with the property. These rights can be sold or transferred individually. For example, leasing transfers the right to possess and use property for a certain period. Rights usually transfer with the land, but some, such as mineral rights, can be sold separately. Ownership extends not just to the surface but also to everything above and below, forming what is sometimes called an “inverted pyramid” of rights.
An appurtenance is something tied to the ownership of property, even if it is not a physical part of the land. Examples include minerals, air rights, water rights, or rights to sunlight and views. Some appurtenances can be sold separately, while others remain tied to the land. Air rights are often regulated by federal aviation laws, zoning rules, and private restrictions. For example, local zoning may impose height limits on buildings to preserve scenic views or solar access. Air rights may also be sold separately, such as in condominium developments.
Water rights apply to both surface and subsurface water. Riparian rights involve flowing waters like rivers, streams, or creeks, giving a landowner the right to use the water for domestic purposes. Littoral rights apply to standing waters such as lakes, ponds, or oceans. These rights generally limit use to the adjoining property; water cannot be transported elsewhere. If the body of water is navigable, ownership extends only to the mean high-water mark, with the land below that mark considered public. In non-navigable waters, the owner may hold title to the lakebed adjacent to their property. Because riparian rights do not work well in areas where water is scarce, states like Washington also use the prior appropriation system, which requires a permit to use surface or groundwater.
Mineral rights allow the extraction of solid minerals within the landowner’s inverted pyramid of ownership and may be sold separately. Once extracted, minerals become personal property. Oil and gas are governed by the Rule of Capture, meaning any oil or gas obtained from wells on a property belongs to that landowner, even if it migrated from neighboring land. Support rights ensure that land is physically supported by surrounding land; lateral support comes from neighboring land, while subjacent support comes from the ground beneath.
Attachments can be natural, like trees, or human-made, like houses and fences. Crops may be considered personal property, especially under the doctrine of emblements, which protects a tenant farmer’s right to harvest annual crops if a lease ends unexpectedly. Natural attachments can be severed and sold, while human-made attachments are called fixtures. Courts use several tests to determine whether something is a fixture: the method of attachment, its adaptation to the property, the original intention of the person who installed it, and the relationship of the parties. Items that are movable but treated as part of the property, like keys or specialized tools, are called constructively annexed.
Trade fixtures are different from regular fixtures. These are items installed by a commercial tenant to conduct business, such as manufacturing equipment, barber chairs, or farm equipment. They remain the tenant’s personal property, and the tenant must usually remove them at the end of the lease and repair any damage caused.
Manufactured homes are built in factories and transported to a site. They begin as personal property, requiring registration similar to vehicles, but they can become real property through a process called title elimination. Once converted, the home is subject to real estate taxes along with the land. If moved, it can be reclassified as personal property again. Mobile home sales typically require a dealer’s license rather than a real estate license.
A legal description is a formal method used to precisely identify a parcel of land. The main systems of legal description are metes and bounds, the government survey system, and the lot and block method.
The metes and bounds system relies on measurements (“metes”) and boundaries (“bounds”). Land boundaries are defined using monuments such as fixed markers, survey stakes, or the centerline of a road, along with courses and distances. Courses are compass directions, expressed in degrees of deviation from north or south (for example, “South 45 degrees East” means 45 degrees east of due south, while “North 30 degrees West” means 30 degrees west of due north). Distances provide the length of each boundary line.
The government survey system, also called the rectangular survey system, divides much of the United States into a grid of squares. Each grid is based on a principal meridian (a main north-south line) and a base line (a main east-west line). Washington and Oregon use the Willamette Meridian, while Idaho uses the Boise Meridian. The grid is further divided by range lines, which are north-south lines spaced six miles apart, and township lines, which are east-west lines spaced six miles apart. The columns created by range lines are called ranges, and the rows created by township lines are called tiers.
The intersection of range and township lines creates a township, which is a square measuring six miles on each side, covering 36 square miles. Each township is further divided into 36 sections. A section is one mile by one mile, or 640 acres in total. Since one acre equals 43,560 square feet, a square acre measures about 208.7 feet on each side. Because most parcels do not consist of a full section, properties are usually described as fractions of a section—such as a quarter section, quarter-quarter section, or even smaller fractions. To read a legal description using this method, it is best to begin with the smallest piece described (such as a section or quarter section) and work backward to identify its place within the township and range. Government lots are irregularly shaped parcels created when natural features like bodies of water make square divisions impractical.
The lot and block system is most often used in subdivisions. When land is divided for development, it is surveyed and recorded on a plat map, which shows the subdivision’s lots and blocks. A property is then legally described by its lot and block number, the name of the subdivision, and the county or city where it is located.
Condominiums require an additional element in their legal description: elevation. A condominium description must include the unit’s elevation, which is measured against a datum, or a fixed plane of reference. The three-dimensional space occupied by a condominium unit is often referred to as an “air lot.”
An interest in real property refers to a right concerning the property or a claim against it. Some interests are called possessory interests, or estates, because they include the right to exclusive use and possession of the property. An estate, in this sense, is the right to occupy and use real property, either immediately or in the future. If an interest does not allow exclusive use and possession—such as a lien—it is considered a nonpossessory interest and not an estate.
There are two main categories of estates: freehold estates and leasehold estates. Freehold estates include ownership (title), while leasehold estates involve possession without ownership. Among freehold estates, the two primary types are fee simple estates and life estates.
A fee simple estate—also called a fee estate, estate in fee, or simply fee simple absolute—is the most common and complete form of land ownership. It is perpetual, transferable, and inheritable, and is usually conveyed without qualifications or conditions. A variation is the defeasible fee estate, also known as a qualified fee or conditional fee estate, which places conditions or limitations on ownership. In these cases, the deed specifies that ownership continues only until or unless a particular event or act occurs.
Defeasible fee estates fall into two categories. A fee simple determinable provides for automatic forfeiture of title if the condition is violated; in this case, the title reverts immediately to the grantor or the grantor’s heirs, a right called the possibility of reverter. A fee simple subject to condition subsequent requires the grantor (or heirs) to take legal action to reclaim title if the condition is broken.
Life estates, unlike fee simple estates, are limited in duration. A life estate exists only as long as a particular person, known as the measuring life, is alive. The holder of a life estate is called the life tenant, and if the estate is based on the life of someone other than the tenant, it is referred to as pur autre vie, meaning “for another’s life.” When a life estate ends, the ownership interest that follows—called a future interest—may either revert back to the grantor (estate in reversion) or pass to another designated person (estate in remainder).
Life tenants have specific duties during their tenancy. They must pay property taxes, assessments, and liens; they must allow those holding future interests to inspect the property; and they must avoid committing waste, meaning they cannot damage or devalue the property to the detriment of future owners.
A leasehold estate gives the tenant the right to use and possess property, but not to own it. Title remains with the property owner. In a lease, the property owner is called the lessor, and the tenant is the lessee. While the tenant does not hold ownership, most leasehold estates can be inherited by the tenant’s heirs. A related concept is a chattel real, which is personal property closely tied to real estate, such as a lease itself.
There are four main types of leasehold estates. An estate for years, also known as a term tenancy, is created by express agreement for a fixed period of time. It has definite beginning and ending dates, whether it lasts for days, months, or years. A periodic estate, or periodic tenancy, continues automatically from one period to the next—such as month-to-month or week-to-week—until proper notice of termination is given by one of the parties. An estate at will, or tenancy at will, has no specified lease term and can be ended at any time by either party. Rent may or may not be paid, but this arrangement cannot be assigned to another person and it automatically ends upon the death of either the landlord or tenant. Finally, an estate at sufferance—also called tenancy at sufferance or a holdover tenancy—occurs when a tenant remains in possession without the owner’s consent after the lease has expired.
Leases can end in several ways. Termination by mutual consent is called a surrender. In most cases, leases may also be assigned to another party unless the lease specifically prohibits it. Periodic estates, because they lack a fixed end date, require one party to give notice to the other in order to terminate. However, Washington State law has limited this right for residential property owners. Under the current rule, a landlord cannot terminate a month-to-month tenancy simply by giving notice. Residential tenants may remain indefinitely unless the landlord has “just cause” for eviction. Just cause exists if the tenant materially breaches the lease or if the landlord removes the unit from the rental market—for instance, to occupy it themselves, substantially remodel, or demolish the property.
Property can be owned by a single person, by an organization, or by two or more individuals together. Ownership by one individual is called ownership in severalty, also known as separate or sole ownership. Property in severalty may be held either by a natural person (an individual human being) or by an artificial person (a legal entity such as a corporation, city, or state).
When more than one person owns a property, it is called concurrent ownership, or co-ownership. There are three primary forms of concurrent ownership: tenancy in common, joint tenancy, and community property. In a tenancy in common, each owner, called a tenant in common, holds an undivided interest in the property. “Undivided” means the property is not physically split among the owners, even if their ownership shares differ. Ownership percentages can be apportioned in any way as long as the total equals 100%, a principle called unity of possession. A tenant in common may sell, will, or mortgage their share without the consent of the other co-owners. Tenancy in common ends when all interests are sold to a single owner, or when the co-tenants agree to partition the property. Partition can be voluntary, dividing the land into separate parcels owned in severalty, or involuntary, through a lawsuit called a suit for partition, where a judge orders the property divided.
Joint tenancy is another form of co-ownership in which two or more people own property equally. It is distinguished by the right of survivorship: when one joint tenant dies, their interest automatically passes to the surviving tenants rather than to heirs. This transfer occurs regardless of any will, and any liens or creditor claims against the deceased tenant’s share are extinguished at death, leaving the survivors with a clear title. To create a joint tenancy, four legal requirements—known as the four unities—must be met: unity of interest (equal shares), unity of title (acquired through the same deed or will), unity of time (interests received at the same time), and unity of possession (the right to use and enjoy the entire property, not just a portion).
Community property is a system of ownership between spouses, where each spouse holds an equal, undivided 50% interest in property acquired during the marriage. Property owned before marriage, as well as gifts, inheritances, or purchases made with separate funds, remain the separate property of one spouse. Profits or proceeds from separate property, such as appreciation, rental income, or interest, are also classified as separate property. In community property states, a joinder requirement means both spouses must participate in transactions involving community real property. However, either spouse may transfer personal community property without the other’s consent, except for specific items such as household furnishings.
A tenancy by the entirety is a special form of ownership similar to joint tenancy, with the right of survivorship, but it is available only to married couples.