Real Estate vs. Real property: while these two terms may be similar, they each include a different set of rights. The differences, while nuanced, matter most in terms of the legalities.
This guide aims to help homeowners, tenants, and business owners understand the rights bundled with their property.
Fausett Law has been protecting the rights of those in the Chicagoland area for 17 years. We’re a team of dedicated attorneys specializing in real estate (and real property) law, mortgage foreclosure defense litigation, business law, and estate law.
What is the definition of real estate?
So, what is real estate? The definition of real estate is a plot of property — including any improvements or attachments.
These improvements or attachments are considered real estate whether they are natural improvements – such as trees and water, or human-made – such as houses, barns, and even sidewalks.
What are the three types of real estate?
There are three types of real estate under which all other real estate falls. The three types of real estate are:
- Residential real estate: This umbrella of real estate includes houses, apartments, townhomes, and other residential structures.
- Commercial real estate: This type refers to property and improvements/attachments that serve a commercial interest. Examples of commercial real estate include restaurants, shopping malls, and more.
- Land real estate: This term refers to plots of land, farms, ranches, and more. This category of real estate can include attachments or improvements. Alternatively, it can consist of what is known as “raw land”. Other natural attachments that are considered land include mineral rights and water rights.
What is the definition of real property?
In comparison to real estate, real property includes a certain “bundle of rights” in addition to the prescribed rights included with owning real estate.
This bundle of rights covers rights outside the physical existence of the land. We’ll cover the five types of real property in the next section.
What are the five types of real property?
The real property definition includes a bundle of five rights that together make up real property. These five rights consist of:
- The right to possess: This right means the owner or the investor of the property holds the title. In other words, they have the right to occupy the property.
- The right to control: Conveys the right to use the property in its full capacity.
- The right of exclusion: The title owner carries the right to exclude or prevent other people or parties from using or entering the property.
- The right of enjoyment: The owner of the property can use the property in any capacity.
- The right of disposition: The titleholder of the property can rent, sell, etc., the property.
The five rights of real property are rights that exceed the physical rights that real estate carries with it.
However, it is essential to note that the courts can overwrite these five rights if they do not align with law enforcement. For example, a police warrant would override the right to exclusion.
Key differences between real estate vs. real property
The critical differences between real estate vs. real property often boil down to the legalities of use, property transfer, and occupation. Real property focuses on the physical attributes of the property and adds the rights that come with ownership of such property.
In order to best understand your property rights, review your contract and consult with a lawyer.
Trusted advice from the law offices of Lora Matthews Fausett
The Law Offices of Lora Matthews Fausett are experienced in many areas of real estate and real property and can provide a comprehensive defense to Chicagoans. For more information, give us a call at (630) 858-0090 or fill out our consultation form online.
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