One aspect of real estate that many people assume they understand is the various definitions of real estate terms. Unfortunately, those who do not thoroughly understand the underlying concepts are apt to engage is real estate deals that are less than advantageous. Taking just a few minutes to understand the various definitions is one of the most effective things anyone interested in real estate can do.
First, understand the term real estate. Real estate is more than land. It is, in fact the land as well as any improvement or additions. This may include buildings as well as sidewalks, sewers and other improvements to the land. It is important to note that these improvements must be physically tied to the land. In other words, ‘real estate’ does not extend into space. Finally, one must consider anything located underneath the property, for example oil. There are several rules and guidelines governing ownership of products such as these.
In addition to the basic definition of real estate, there are several other concepts to be considered. Fixtures and trade fixtures are two prime examples. At their heart, they are very similar, but in practice very different. Trade fixtures and fixtures are both improvements made to a piece of land or an improvement located on a piece of land. That is where the similarity ends. Fixtures that are permanent are part and parcel of a real estate deal. Trade fixtures, even those attached to a piece of property, are not and must be removed by a vacating tenant.
There are other concepts as well, such as personal property, but understanding the definition of real estate and fixtures is, perhaps, the best place to start. Understanding these concepts and what they include will help you understand what you are buying and what will be removed by the seller.