Real property

In English common law, real property, real estate, realty, or immovable property is land which is the property of some person and all structures (also called improvements or fixtures) integrated with or affixed to the land, including crops, buildings, machinery, wells, dams, ponds, mines, canals, and roads, among other things. The term is historic, arising from the now-discontinued form of action, which distinguished between real property disputes and personal property disputes. Personal property was, and continues to be, all property that is not real property.
In countries with personal ownership of real property, civil law protects the status of real property in real-estate markets, where estate agents work in the market of buying and selling real estate. Scottish civil law calls real property "heritable property", and in French-based law, it is called "immobilier" ("immovable property").
Historical background.
The word "real" derives from Latin "res" ("thing"), which was used in Middle English to mean "relating to things, especially real property".
In common law, real property was property that could be protected by some form of real action, in contrast to personal property, where a plaintiff would have to resort to another form of action. As a result of this formalist approach, some things the common law deems to be land would not be classified as such by most modern legal systems: for example, an advowson (the right to nominate a priest) was real property. By contrast the rights of a leaseholder originate in personal actions and so the common law originally treated a leasehold as part of personal property.
The law now broadly distinguishes between real property (land and anything affixed to it) and personal property (everything else, e.g., clothing, furniture, money). The conceptual difference was between immovable property, which would transfer title along with the land, and movable property, which a person would retain title to.
In modern legal systems derived from English common law, classification of property as real or personal may vary somewhat according to jurisdiction or, even within jurisdictions, according to purpose, as in defining whether and how the property may be taxed.
Bethell (1998) contains much information on the historical evolution of real property and property rights.
Characteristics of real property.
Immobility.
Real property is immobile, preventing it from moving to a better market. Landlords are incapable of move their physical land to the desired location, such as to another city for sale. In order to benefit from using parcels of land, users must travel from location to location to increase utility, therefore, location is a large component of a real property's value. 
Externalities.
Changes that take place nearby will directly affect the real property’s value. Real property is vulnerable to externalities due to its immobile nature. External factors outside of the real property will affect the value of the real property, for example, the noises that neighbouring people and construction sites produce. 
Development.
A location of desired resources will draw attention to the location. Natural locational attractions include water supply, climate, soil fertility, water frontage, and mineral deposits. As the area develops revolving around such natural resources, these developments become components to look for when determining land use and real property values. The surrounding development and proximity, such as markets and transportation routes, will also determine the value of the real property.
Supply of Urban Land.
Although the amount of land in terms of the surface area is fixed, the supply of urban land is often not limited due to the nature of how urban land is supplied. By bidding land away from non-urban uses of land, such as farmland, will increase the supply of urban land. Urban land value is expected to exceed that of agricultural land value in the long run, therefore, creating the incentive to convert non-urban land to urban land. The value of the land is directly associated with its use. Zoning regulations regarding multi-story development are modified to intensify the use of cites, instead of occupying more physical space.
Identification of real property.
To be of any value, a claim to any property must be accompanied by a verifiable and legal property description. Such a description usually makes use of natural or man-made boundaries such as seacoasts, rivers, streams, the crests of ridges, lakeshores, highways, roads, and railroad tracks or purpose-built markers such as cairns, surveyor's posts, iron pins or pipes, concrete monuments, fences, official government surveying marks (such as ones affixed by the National Geodetic Survey), and so forth. In many cases, a description refers to one or more lots on a plat, a map of property boundaries kept in public records.
These legal descriptions are usually described in two different ways – metes & bounds, and lot & block. A third way is the Public Land Survey System, as used in the United States.
Estates and ownership interests defined.
The law recognizes different sorts of interests called estates, in real property. The type of estate is generally determined by the language of the deed, lease, bill of sale, will, land grant, etc., through which the estate was acquired. Estates are distinguished by the varying property rights that vest in each, and that determine the duration and transferability of the various estates. A party enjoying an estate is called a "tenant".
Some important types of estates in land include:
A tenant enjoying an undivided estate in some property after the termination of some estate of limited term, is said to have a "future interest". Two important types of future interests are:
Estates may be held jointly as joint tenants with rights of survivorship or as tenants in common. The difference in these two types of joint ownership of an estate in land is basically the inheritability of the estate and the shares of interest that each tenant owns.
In a joint tenancy with rights of survivorship deed, or JTWROS, the death of one tenant means that the surviving tenants become the sole owners of the estate. Nothing passes to the heirs of the deceased tenant. In some jurisdictions, the specific words "with right of survivorship" must be used, or the tenancy will assumed to be tenants in common without rights of survivorship. The co-owners always take a JTWROS deed in equal shares, so each tenant must own an equal share of the property regardless of any contribution to purchase price. If the property is someday sold or subdivided, the proceeds must be distributed equally with no credits given for any excess than any one co-owner may have contributed to purchase the property.
The death of a co-owner of a tenants in common (TIC) deed will have a heritable portion of the estate in proportion to his ownership interest which is presumed to be equal among all tenants unless otherwise stated in the transfer deed. However, if TIC property is sold or subdivided, in some States, Provinces, etc., a credit can be automatically made for unequal contributions to the purchase price (unlike a partition of a JTWROS deed).
Real property may be owned jointly with several tenants, through devices such as the condominium, housing cooperative, and building cooperative.
Bundle of Rights.
Real property is unique because there are multiple rights associated with each piece of property. For example, most U.S. jurisdictions recognized the following rights: right to sell; right to lease; right to acquire minerals, gas, oil, etc. within the land; right to use; right to possess; right to develop; etc. These multiple rights are important because owners of the real property can generally do what they choose with each right. For example, the owner could choose to keep all the rights but lease the right to drill for oil to an oil company, or the owner could choose to keep all the rights but lease the property to a tenant. In other words, the owner can elect to keep, lease or sell the rights to the land.
Jurisdictional peculiarities.
In the law of almost every country, the state is the ultimate owner of all land under its jurisdiction, because it is the sovereign, or supreme lawmaking authority. Physical and corporate persons do not have allodial title; they do not own land but only enjoy estates in the land, also known as "equitable interests".
Australia and New Zealand.
In many countries the Torrens title system of real estate ownership is managed and guaranteed by the government and replaces cumbersome tracing of ownership. The Torrens title system operates on the principle of "title by registration" (i.e. the indefeasibility of a registered interest) rather than "registration of title". The system does away with the need for a chain of title (i.e. tracing title through a series of documents) and does away with the conveyancing costs of such searches. The State guarantees title and is usually supported by a compensation scheme for those who lose their title due to the State's operation. It has been in practice in all Australian states and in New Zealand since between 1858 and 1875, has more recently been extended to strata title, and has been adopted by many states, provinces and countries, and in modified form in 9 states of the USA.
United Kingdom.
In the United Kingdom, The Crown is held to be the ultimate owner of all real property in the realm. This fact is material when, for example, property has been disclaimed by its erstwhile owner, in which case the law of escheat applies. In some other jurisdictions (not including the United States), real property is held absolutely.
England and Wales.
English law has retained the common law distinction between real property and personal property, whereas the civil law distinguishes between "movable" and "immovable" property. In English law, real property is not confined to the ownership of property and the buildings sited thereonoften referred to as "land". Real property also includes many legal relationships between individuals or owners of land that are purely conceptual. One such relationship is the easement, where the owner of one property has the right to pass over a neighbouring property. Another is the various "incorporeal hereditaments", such as "profits-à-prendre", where an individual may have the right to take crops from land that is part of another's estate.
English law retains a number of forms of property which are largely unknown in other common law jurisdictions such as the advowson, chancel repair liability and lordships of the manor. These are all classified as real property, as they would have been protected by real actions in the early common law.
United States.
Each U.S. State except Louisiana has its own laws governing real property and the estates therein, grounded in the common law. In Arizona, real property is generally defined as land and the things permanently attached to the land. Things that are permanently attached to the land, which also can be referred to as "improvements", include homes, garages, and buildings. Manufactured homes can obtain an affidavit of affixture.
Economic aspects of real property.
Land use, land valuation, and the determination of the incomes of landowners, are among the oldest questions in economic theory. Land is an essential input (factor of production) for agriculture, and agriculture is by far the most important economic activity in pre-industrial societies. With the advent of industrialization, important new uses for land emerge, as sites for factories, warehouses, offices, and urban agglomerations. Also, the value of real property taking the form of man-made structures and machinery increases relative to the value of land alone. The concept of real property eventually comes to encompass effectively all forms of tangible fixed capital. with the rise of extractive industries, real property comes to encompass natural capital. With the rise of tourism and leisure, real property comes to include scenic and other amenity values.
Starting in the 1960s, as part of the emerging field of law and economics, economists and legal scholars began to study the property rights enjoyed by tenants under the various estates, and the economic benefits and costs of the various estates. This resulted in a much improved understanding of the:
For an introduction to the economic analysis of property law, see Shavell (2004), and Cooter and Ulen (2003). For a collection of related scholarly articles, see Epstein (2007). Ellickson (1993) broadens the economic analysis of real property with a variety of facts drawn from history and ethnography.