In the context of the law, personal property is anything other than land that may be subject to ownership. Because of this, the characteristic that defines personal property is that it is movable.
However, real property or real estate that is not movable is different. Personal property can also be further categorized as belonging to one of two categories: tangible and intangible.
Tangible property includes personal property that can be physically handled, for example:
Other examples of personal property include:
- Sports or hobby equipment;
Intangible personal property is property that cannot be physically handled, for example, stocks, trust fund accounts, and similar things. Another way personal property can be defined is that it is any property that is not attached to land or structures on a piece of real estate.
Other terms for personal property may include chattel or personality. In contrast, property that is attached or fixed to real estate is referred to as realty or real property.
Fixtures that can be removed without damaging a structure may also, in some cases, be included in the legal definition of personal property.
How Does the Definition of Personal Property Compare With Real Property?
The differences between real and personal property are very important, as the property laws that apply to an issue may differ depending on whether the item is classified as personality or realty. In addition, property laws can vary depending on the jurisdiction where the property is located.
Due to the fact that real property is defined as any property that is land or that is attached or affixed to land, it includes crops and buildings. It is also typically assumed that the majority of real property has a higher value than personal property.
What Are Some Legal Applications of Real vs. Personal Property?
The differences between the legal definitions of real property and personal property can be applied in many different areas of law. One example of this would be in contract law. Contract law is the sale of real property that is required to be in writing. However, not all sales contracts for the sale of personal property have to be in writing to be considered valid.
One other example is personal property tax consequences. There are 42 states that place state-wide taxes on personal property, including:
- North Carolina;
Other states, however, that do not have state-wide personal property taxes may allow other government entities to enact personal property taxes. One example of this is how the State of Pennsylvania does not tax personal property on a state-wide level. However, it does allow its local governments to levy a personal property tax.
There are also certain types of personal property that may be taxed based on the state in which an individual resides or if it helps them earn an income. There are also some states that tax both tangible and intangible personal property.
What About Personal Property Contracts?
An additional legal application of real property versus personal property is personal property contracts. A personal property contract can be used in order to govern the sale of goods.
Although some personal property sales may involve an item of relatively low value, some may involve high-value items, for example, heirloom jewelry and keepsakes. Regardless of the property being sold, it is generally advisable to form a contract so that the parties who are involved have a sales record of the transaction.
A property sales contract generally requires some basic elements to be satisfied in order to be legally valid and enforceable, including:
- Subject matter of the sale: The item of personal property that is being sold has to be identifiable in the contract;
- Price: This is the price that the parties previously agreed upon;
- Although the contract can also mention the item’s fair market value at the time of the sale, this is not a requirement;
- Mutual agreement: This is when all of the parties involved in the sale must consent to all of the terms of the contract.
Pursuant to the Statute of Frauds, personal property contracts have to be in writing if the item is worth over $500. This is intended to help provide both parties involved with legal protections for sales transactions involving relatively valuable items.
Other examples of common legal applications include:
- A division of property in a divorce or legal separation;
- Property distributions in a will or trust;
- A description of real property in a title deed;
- A distribution of property when a business is sold.
It is important to note that some personal property items may become real property, such as if they are attached to a building or if materials are made into a fence or gate that is attached to the land.
What Are Personal Property Sales?
A personal property sale involves the transfer of personal property from one party to another party. This transfer may be accomplished using an informal oral agreement, for example, at a garage sale or using a written contract, as discussed above.
A personal property sale involves the sale of moveable items, which may include:
- Appliances and furniture;
- Clothing, drapes, and linen;
- Electronics, such as:
- Television sets;
- Other types of electronics;
- Mechanical and hand tools;
- Jewelry, watches, and other valuables;
- Fine art and other collectibles.
Personal property sales may be conducted by any individual or business entity. In the context of a business, a personal property sale refers to the sale of goods that are moveable, regardless of whether an individual or business owns the goods being sold.
Sales of personal property are governed by the principles of contract law. Although the specific requirements may vary, in general, there are three requirements for a value personal property sale, including:
- Subject matter of the sale: The item or items of personal property that are included in a sale should be clearly identified in the sales contract;
- In addition, the personal property must be deliverable at the time that the sale is completed;
- Price: The price of the personal property must be a definite amount or be capable of calculation; and
- Mutual consent: All of the parties who are involved in the sale must agree to the price and terms of the sale;
- Any sale that is completed because of duress, coercion, or force is legally prohibited.
If any of these elements is not satisfied, the sale may be considered invalid under property laws. Written contracts can serve as evidence in cases where disputes arise regarding the sale of personal property.
Do I Need a Lawyer for Help With Legal Definitions of Personal Property?
If you have any issues, questions, or concerns related to personal property law or real property issues, it is important to consult with a property lawyer. If you are considering making a personal property sale or purchase, your attorney can advise you of the applicable laws and help you draft a contract for the sale.
If any legal issues arise related to your personal property sale or contract, your attorney can represent you in court and help you resolve your personal property disputes. Having a lawyer involved at the beginning of the sale will help ensure it goes smoothly and there are no issues that arise in the future.