Real estate refers to land and anything permanently attached to it.
Land includes the earth’s surface, everything beneath it, and the air above it to a reasonable height.
Land is considered indestructible, meaning it cannot be destroyed, only changed.
While land itself does not depreciate, improvements on land can lose value over time.
Improvements include permanent man-made additions such as buildings, foundations, streets, and sewer systems.
Trade fixtures are not considered improvements because they belong to a business tenant.
Real estate includes natural components like trees and minerals while they are attached to the land.
Once natural items like timber or minerals are removed, they become personal property through severance.
Personal property includes movable items such as furniture and equipment.
Patio furniture is an example of personal property because it is not permanently attached.
Fixtures are items that were once personal property but are permanently attached to real estate.
A bathtub or built-in fireplace is considered a fixture.
Awnings may be fixtures depending on how they are attached.
In Pennsylvania, a newly manufactured home is considered personal property unless legally converted.
The bundle of rights includes possession, control, enjoyment, exclusion, and disposition.
Owning the full bundle of rights includes owning surface, subsurface, and air rights.
Mineral rights are part of subsurface rights and can be sold separately.
When mineral rights are sold, the owner no longer owns subsurface rights.
Air rights may be limited near airports through aviation easements.
The Federal Aviation Authority has the power to obtain aviation easements.
Railroad rights-of-way allow trains to operate as usual even if buildings are constructed above them.
A lease transfers possession but not ownership of real estate.
A tenant does not own the land or minerals beneath it.
Trade fixtures installed by a tenant remain personal property.
Restaurant equipment like ovens and counters never become real property.
Appurtenances are rights and privileges that transfer with ownership.
These include easements and improvements that benefit the land.
Environmental law is important in real estate due to contamination concerns.
Contract law governs agreements between buyers, sellers, landlords, and tenants.
Zoning and land-use laws regulate how property can be used.
Corporate and business law is generally less important for real estate licensees.
Real estate does not include movable items like farm equipment.
Buildings, fences, and growing trees are considered real estate.
Property can change classification from real to personal by severance.
Attachment causes personal property to become real property.
Hypothecation refers to pledging property as security for a loan.
Licensees must complete continuing education after licensure.
Prelicense exams do not need to be retaken.
Continuing education keeps licensees legally active.
Ownership transfers include land, improvements, and appurtenances.
Real estate rights can be separated and sold individually.
Surface rights involve using the land’s surface.
Subsurface rights involve minerals and underground resources.
Air rights involve space above the land.
Real estate is affected by supply and demand.
Land ownership is subject to government powers.
Understanding these concepts is essential for real estate exams.
