What is 'Real Property'
Real property, also referred to as real estate, realty or immovable property, is any property attached directly to land as well as the land itself. It is any subset of land that has been improved through legal human actions. Real properties include buildings, ponds, canals, roads and machinery, among other things.
BREAKING DOWN 'Real Property'
Real property is composed of any designated portion of land and anything permanently placed on or under it. The elements on or under the land include natural resources and/or human-made structures.
Owning real properties involves different types of estates, which define the rights of the owner to use, transfer and/or sell his real properties. These estates are recognized by the law. The kind of estate depends on the terms of the lease, deed, will, land grant and/or bill of sale through which the estate was received.
Fee simple ownership, also called the fee simple absolute, is the most common type of freehold ownership on a real property. This is the highest possible type of ownership interest that can be owned by a real property holder. Those who own properties under this type of ownership have the right to sell the house, leave it to their beneficiaries or make changes, even if they still owe money on their mortgage. These rights are bounded by government powers of compulsory purchase, taxation, escheat and police power.
Life estate ownership implies the owner may only own and use the involved properties during his lifetime. The owner may not give away, sell or leave the property to someone else. Owners of life estates are called “life tenants."
Future interest ownership belongs to those who will own properties in the future. Rights of owners of future interest do not include the ownership, use and enjoyment of the involved properties in the present. Current possessors of properties may create a term of a deed or an irrevocable trust that allows the future interest owner to inherit the involved properties when the current owner passes away.
In contingent interest, the involved properties are not passed to designated inheritors unless one or more conditions of the current owner are fulfilled. If these conditions are not met, the properties are passed to someone else.