The nature of property: physical components, real and personal property, and fixtures

Physical property and ownership

Land includes the surface, space above, and material below. Surface, air, and subsurface rights may be separated, subject to legal restrictions. Real estate includes land and permanent improvements; real property often emphasizes the accompanying ownership rights. Personal property, or chattels, generally includes movable things outside the real estate. Stock ownership is intangible personal property.

Florida's tax definition includes land, buildings, fixtures, and other improvements in real property. Its tangible personal property definition excludes household goods and inventory for that tax classification; an excluded sofa does not become real estate.

When property changes character

A fixture starts as personal property and becomes part of real estate through attachment or adaptation. Installing a sink illustrates annexation. Cutting a tree into logs illustrates severance, the reverse change. Naturally growing trees generally are real estate; cultivated annual crops generally are personal property. Emblements protect a qualifying tenant's harvest of annual crops when an uncertain tenancy ends without the tenant's fault.

Deciding whether an item is a fixture

Consider method of attachment, adaptation, relationship of the parties, objectively shown intent, and agreement. Easy removal does not settle the issue. A custom fitted installation can show adaptation, and an undisclosed intention to remove something does not determine its status. Put agreed inclusions and exclusions in writing. Classification and removal depend on facts and governing agreements; the tests are guides rather than a mechanical scorecard.

Trade fixtures are tenant-installed business equipment generally retained as the tenant's personal property. Removal is governed by the lease and applicable rules, with responsibility for repairing damage. Distinguish removable business equipment from the landlord's permanent improvements.

Florida subsurface disclosure

In the residential new dwelling transactions defined by section 689.29, a seller must disclose when the seller or a related entity has severed or retained, or will sever or retain, subsurface rights or the right of entry. Disclosure is due at or before contract execution. The statute does not describe every residential resale.