LAND LESSONS- What is the difference between Real Property and Real Estate?
What is Real Estate?
Real estate is defined as land and the buildings on it, along with its natural resources such as growing crops, minerals, water, and wild animals; immovable property such as trees and rocks BUT NOT the specific rights that come with ownership such as well as the right to sell the mineral rights while still owning the land above those minerals.
What Is Real Property?
Real property is a parcel of land and structures that are permanently attached to the land AS WELL AS the rights of ownership, including the right to possess, sell, lease, and enjoy the land.
What are the rights of ownership?
The term “bundle of rights” describes the set of legal rights associated with ownership of real property. The “bundle” is made up of five different rights:
- Right of Possession- refers to the right to own, the property. If you’re the title holder, you’re the legal owner of the property.
- Right of Control- this refers to your control over things such as renovations, changes to the property, or renting it out to earn an income. If your property is governed by a community HOA, their regulations can limit your rights. Government zoning laws can also impact your right of control. for example, you might not be able to run certain types of businesses out of your home or keep farm animals in your yard.
- Right of Exclusion- the right you get to say who can and can’t set foot on your property.
- Right of Enjoyment- the right of enjoyment gives you the right to lawfully enjoy your property how you see fit provided you do not break local laws or ordinances.
- Right of Disposition- you have the right to sell it, will it or otherwise transfer ownership to someone else.