My Study Guide to The California Real Estate License Exam | PART 1 | Property and Property Interests
- Odysseas Lamprianidis
- Sep 14
- 7 min read
Study Series Composed and Presented by Odysseas Lamprianidis
Property and Interests on Property
What is a property interest?
Well, first, what is a property?
I'm sure you have some idea of what a Property is, but the best teachings come from the assumption that you, the student, know nothing on the subject.
All the definitions and concepts you'll need to understand are fully encased within this series.
What "Property" Really Means
Real vs. Personal Property
Real Property
land PLUS everything attached to it: surface, subsurface (and it's minerals), and airspace.
It's more than just a "housing" -- it's the land, improvements, and rights attached to the land.
Personal Property
Anything that is NOT real property (let me explain)
It's typically something that is movable / temporary.
Cars; Furniture; Appliances
Something that transfers with a bill of sale, NOT a deed.
Personal Property can be tangible (you can touch it) or intangible (such as stocks; IP; Lease)
The "Bundle of Rights" (What Ownership Confers)
Your bundle of rights as a homeowner include all of the following:
Possession (use / occupy);
Quiet Enjoyment (use without unlawful interference);
Disposition (sell, gift, will)
Exclusion (keep others off your land)
Control (alter / modify).
These rights define what real ownership allows you to do--within the law and without infringing on others' rights.
Interference with Rights
Interferences with your rights as a homeowner also include:
Trespass (people unlawfully entering)
Encroachment (objects / buildings or other property lines that intrude over the boundary of your property)
Nuisance (odors, noise, unsightliness that disturb enjoyment)
These concepts are foundational for later topics like easements and encumbrances.
What "Comes With" the Land
Attachments, Fixtures, and Improvements
Natural Attachments include naturally made objects on your land such as trees and plants.
Manufactured Attachments include fixtures like built-ins (barbecues; bars; pools) and fences
Manufactured Attachments are usually considered Improvements on your land.
Improvements are major fixtures (such as a building) added on your land.
Unless agreements state otherwise, all attachments on the property are transferred with the land whereas personal property does not.
Think of it like this: if you sell your home, it's very unlikely that your car will also be sold as part of this deal. Your car is your Personal Property that requires a Bill of Sale. Your home is your Real Property.
Appurtenances (Rights That Run with the Land)
Air, Water, mineral Rights are all appurtenant--they usually transfer with the land but can be severed and sold/leased separately.
Such as a sale agreement for Mineral Rights.
Minerals are Real Property until extracted.
Water Rights
Riparian Rights = the right to flowing water (rivers and streams) along the property.
Think of a home with a personal dock in their backyard
Littoral Rights = a property owners right for land that borders a large, non-flowing body of water like a lake or ocean.
Appropriative Rights = Water rights established by diverting and beneficially using water for a specific purpose
This is acquired by obtaining a permit.
Natural Changes to Land
Erosion = The gradual loss of land.
Avulsion = The sudden tearing away of land (through a flood, earthquake, tornado, etc).
Accretion = The gradual addition of land or substance over time.
Alluvion = The formation of new land by deposition of a body of water.
Reliction = When the water recedes, exposing land.
These can all alter the boundaries, value and sometimes even the title on the land.
Personal Property in Practice
Transfer & Crop Rights
Personal Property on site doesn't automatically convey with real estate; using a Bill of Sale you can transfer ownership of Personal Property
the doctrine of Emblements as it relates to tenant farmers, protects farmers by allowing them to harvest a crop that was growing at the time their tenancy ended through no fault of their own.
Crops growing on the land are considered personal property.
Is It a Fixture or Personal Property?
The following is how the court will decide what is considered a Fixture and Personal Property.
This is the same method an agent must use and understand to help their clients during a sale.
Method of Attachment (can it be removed without damage?).
Adaptation / Customization (Is it custom-fit to the property?).
Agreement / Intent (written agreements control [take precedent]; value is not a factor).
Trade Fixtures (business equipment that a commercial tenant installs is personal property; unless otherwise stated in a WRITTEN agreement, they should be removed before lease end).
Possessory Interests: "Estates" in Land
An Estate is a possessory interest now or in the future. The two major families of Estates are: Freehold Estate (ownership) and Leasehold (tenancy).
Freehold Estate (Ownership)
A Freehold Estate (ownership) can be further broken down into the following forms of ownership titles.
Fee Simple Absolute = This is the fullest ownership possible.
It's inheritable; transferable; perpetual; and with no conditions limiting the bundle of rights.
Fee Simple Defeasible = This title is CONDITIONAL.
If a condition is broken, the title may revert back to the grantor / heirs (sometimes automatically; sometimes by court order depending on how it's written).
Life Estates = This title lasts only as long as the specified owners measuring life... (say you have a life estate. Ownership transfer back to the old owner after you pass [your property is uninhabitable]).
Ordinary Life State (life tenant = measuring life) vs.
Pur Autre Vie (measuring life is someone else)
Life esnants can sell / mortgage / lease only what they own.
Leasehold (Non-Freehold) Estate (Tenancy)
Estate for Years (also known as Tenancy for Years)
Definite start / end dates; auto-terminates; no notice needed; not ended by death or sale. Any length is okey if the end date is explicit.
Periodic Estate (from period ot period)
Renews automatically in like (similar) periods; notice is required to terminate leasehold agreement (per state law).
Estate at Will
Occupancy with owner permission without a formal term / rental period.
Estate at Sufferance (also known as Holdover Estate)
When the Lease has ended, and tenant remains wrongfully.
If the landlord accepts rent, it make become a periodic tenancy.
Non-possessory Interests: Burdens, Uses, and Permissions
These are claims / limitations on title -- often called encumbrances -- They don't grant possession.
Here we'll focus on Easements and Liens.
IMPORTANT: Licenses and Encroachments are NOT treated as Encumbrances here)
Easements (The Right to Use, not Possess)
Easements are the legal right for a proeprty to use a portion of someone else's land for a specific purpose, without actually owning that land.
This runs with the land when recorded; it binds future owners.
Easement Appurtenant involves two separate parcels that are owned by different parties.
This easement burdens one piece of land, called the Servient Tenement, for the benefit of the other piece of land, called the Dominant Tenement.
Easement in Gross is a right across one property for the benefit of another party.
Easements in gross that belong to a company can be assigned to another company.
the land that is burdened by an easement in gross is the servient tenement; there is no dominant tenement.
License vs. Encroachment
A License is a revocable, non-assignable permission to enter / use land for a purpose.
this DOES NOT run with the land.
An Encroachment is a physical intrusion by a structure / improvement onto a neighbor's land
Liens and Priority (Money Claims Against Property)
A Lien is a financial claim (it's a security for a debt) that can lead to foreclosure if unpaid. (Like having an unpaid mortgage that allows the bank to reclaim your home).
Liens can be Voluntary (with the owner's consent [such as a mortgage]) or Involuntary (without consent from the owner [such as property taxes]).
Common Liens include
Property Taxes (Ad Valorem) and Special Assessment Liens:
involuntary, and Specific Liens.
These pay for public services and improvements
HOA Assessment Liens:
Involuntary, Specific Lien
For unpaid dues and assessments
Income Tax liens:
Involuntary, General.
This attaches to all property.
Mechanic's Liens:
Involuntary, Specific.
For unpaid labor / materials on improvements.
Say you hire a Contractor to paint your calls... and you don't pay them for their work... you may have a Mechanics Lien placed on your home.
Attachment Liens:
It's intended to prevent the transfer of a property until the outcome of a court case.
Judgment Lien:
Involuntary, General.
A satisfaction of judgment (from a court action) removes the lien when paid or satisfied.
Homestead laws may protect some equity in a primary residence.
Priority Rules (Who Get's Paid First?)
Property tax liens are always first (They have what the government likes to call "Super-Priority").
Junior Liens are generally paid in order of when they attached.
IRS income-tax liens can sometimes jump ahead of others--but never ahead of your proeprty taxes.
A lien DOES NOT block a sale! Buyers can take property subject to a lien, but most closings clear liens at settlement.
Long story short... you can't avoid your taxes unless you want to your home to disappear.
Quick Mastery Check (What You Should Now Be Able to Do
After having reviewed this article, you can now confidently say you know how to :
Distinguish real vs/ personal property and identify what conveys with each.
Explain the bundle of rights and typical interferences (trespass, encroachment, nuisance).
Identify fixtures / improvements, appurtenances, water rights, and natural processes.
Apply tests to decide fixture vs. personal property (and the rule for trade fixtures).
Classify freehold vs/ leasehold estates and recognize each subtype.
Differentiate easements, licenses, encroachments; and list ways easements are created.
Classify liens and their priority.
In Part Two we'll learn about Ownership and Title.
In the comments tell me how else you'd like me to share this learning information? Do you want videos? video shorts? podcasts?
Thank you for your time!
-- Odysseas Lamprianidis
Why does the distinction between real and personal property matter in a sale?