2.1 Real Estate as Property

Real Estate as Property

Real estate is defined as land, air, water, and everything affixed to the land. In the U.S., real estate may be owned privately or publicly, but private ownership is not absolute. The government can impose taxes, restrictions, or even take property, and other private parties (like banks or neighbors) may also have certain rights.

Understanding real estate means knowing the differences between land, real estate, property, and the rights associated with each:

• Land: The surface, everything beneath it, and the air above it. Land is immobile, indestructible, and unique (no two parcels are exactly the same).
• Real Estate: Land plus all man-made structures (improvements) that are permanently attached, such as buildings and roads.
• Property: Something that is owned, along with the “bundle of rights” to use, transfer, encumber, and exclude others from it.
• Real Property: Ownership of real estate and its associated rights.
  Personal Property: Anything not considered real estate (e.g., cars, jewelry, stocks).

Real property rights include the right to possess, use, transfer, encumber, and exclude others. These rights can apply to the surface, subsurface (minerals, water), and airspace above a property.

Water rights are determined by state law and whether the water is moving or navigable.

• Littoral rights: Properties abutting non-moving water (lakes, seas). Ownership usually extends to the high water mark.
• Riparian rights: Properties abutting moving water (streams, rivers). Rights depend on whether the water is navigable.

Water rights usually transfer with the property.

Check-In Questions

• Which of the following is not a physical characteristic of land?
  Immobility
  Indestructibility
  Heterogeneity
  Portability
  Show Answer

  Correct Answer: Portability
  Land cannot be moved, so “portability” is not a characteristic of land.
• What do “littoral rights” refer to?
  Rights to use water from moving streams and rivers
  Rights to use water from lakes and seas
  Rights to minerals beneath the land
  The right to exclude others from property
  Show Answer

  Correct Answer: Rights to use water from lakes and seas
  Littoral rights concern properties abutting non-moving water like lakes and seas.