Property Basics

Posted by texaslawdiva on November 27, 2013 at 1:15 PM

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Property is defined as anything that can be owned.

There are two categories of property:

1.                 REAL PROPERTY

2.                 PERSONAL PROPERTY 

Real Property, which is property that is immovable, land and things permanently attached to the land.  The ownership of real property is transferred from one person to another by a DEED, in which the seller of the land is referred to and the GRANTOR and the buyer is the GRANTEE. 


Personal Property, which is property that is not land or attached to land. Personal property may be classified into two categories.


1.                 TANGIBLE – you can touch it (car, furniture, etc.)

2.                 INTANGIBLE – you cannot touch it (stock certificate, promissory note)


Tangible things have a “face” value.  Example, a car’s value comes from the fact that it is a car (make/model).  Intangible things are inherently worth very little, like a piece of paper, but they represent something much more significant.  (stock certificate, $10 bill, promissory note, etc.)


Why is this important?  There may be some items on the land or realty that become attached but still are not considered a part of the realty. 


How would you define a 1970 Sedan that has remained parked on your neighbor's front lawn for 10 years?  We will address this a little later. 

FIXTURES:  Now you could take something that is moveable, is not attached to land, like a dishwasher, or a rosebush in a pot, and attach it to the land.  That would change its character from personal to real.  An object whose character has been changed in this way is a FIXTURE, and once the fixture has been attached to the land it usually becomes part of the realty.  However, if you are renting an apartment and you install a ceiling fan, doe the ceiling fan become owned by the owner of the apartment building?


The law uses a three-way test to determine if the fan is now part of the real estate.  These are annexation, adaptation and intention.

1.                 ANNEXATION asks to question, how is it attached?  Is it meant to be permanent? Nailing something to the wall is a lot different than scotch taping it.

2.                 ADAPTATION asks the question, was this item of person property modified to fit in this particular space, like the wooden shelves cut a certain length to fit in a built-in bookcase.

3.                 INTENTION asks the question, what did the person installing the item intend? If the owner of the apartment installed the ceiling fan, clearly he intended the fan to be a permanent part of the apartment. IF it was the tenant installed the fan, however, he probably meant for the fan to be temporary. 

If the answers to these three questions show that the item of personal property was permanently attached, then it’s now part of the real property.

The law divides property into two categories for the purpose of inheritance:

          Probate and non-probate

PROBATE ASSETS are those items of real and personal property that can be passed to another person either by will or by the laws of intestacy.  While NON-PROBATE assets are those items of property that transfer to someone else at the death of the decedent, by some law other than the laws of inheritance.  In fact, non-probate assets cannot be transferred by will or inheritance. 

One thing that determines whether an item of property is a probate or non-probate asset is how that asset is owned.  In other words, it is important to determine how title to the property is held.

Let’s review the various ways a piece of property can be owned:  


1.                 IN SEVERALTY – owned by 1 person

          The sole owner of the property owns all the rights, privileges and interests that go with that property.

2.                 CONCURRENT OWNERSHIP – owned by more than 1 person at the same time

          There are several types of concurrent ownership:

a.                 joint tenancy

b.                 tenancy in common

c.                  tenancy by the entirety

d.                 community property

e.                  tenancy in partnership 


In joint tenancy, two or more people acquire interests in one piece of property.  The unique thing about joint tenancy is that ownership carried with it the right of survivorship, which means that when one of the joint tenants dies, his share does not go to his heirs or beneficiaries.  Rather, his interest goes to the other surviving joint tenants. While a joint tenant is alive, he can sell or give away his interest in the property, and when he does, the joint tenancy ends as to him.   In other words, a Joint Tenant can sever a joint tenancy by conveyance but not by will. 


 Amy & Bob & Chris & Dave joint tenants

Amy sells to Emily

Bob & Chris & Dave are Joint Tenants as to ¾ of the property and Emily is a Tenant in Common as to the other ¼.

In Texas, persons wishing to be jts must sign a written document in which they recite that they are to be joint tenants with right of survivorship.  If you do not do this, you do not have a joint tenancy, but a tenancy in common.      

To create a joint tenancy four events must happen:

1.     Unity of time – the joint owners acquire their interest in the property at the same time.

2.    Unity of title – the joint owners acquired their interest from the same transaction and on the same dealing/or source, the same deed or will.

3.  Unity of interest – the joint owners’ interests are identical in nature, extent, and duration.

4.     Unity of possession – Each joint owner as an equal right to possession to the whole of the property, but not a right to exclusion of any part.  This means that they all constitute a single “person” – “oneness”. 



In a tenancy in common two or more person each owns a fractional share of a single piece of property, but they do not divide the property. Rather, each person owns an undivided fractional share of the whole.


Example:  Farmer Brown dies, leaving farm to his two sons, Tom and Ben.


In a tenancy in common, each co-tenant, Tom and Ben has an equal right to possess or utilize all of the property along with the other co-tenants, but other than that, they each own their own interest and can do with it whatever they wish, without the permission of the other co-tenants and without destroying the tenancy in common.


There is no right of survivorship in a tenancy in common; when one co-tenant dies, his interest goes to his heirs, with each of them receiving his proportionate share, and all the heirs become co-tenants.


Example:  Ben dies, leaving 8 kids.


Since Ben’s heirs inherited through him, we would say that Ben’s interest in the tenancy in common was a probate asset. 


Each of those kids has the right to use all the property and the right to sell his own undivided share of the property.   


Suppose one of Ben’s kids decides to build a house on the land.


He has the right to do so, but the house will become co-owned just like the land.


Or suppose one of Ben’s kids sells his interest to his brother ex-wife Sharon. (Note:  None of the siblings ever got along with her). Too bad!  They cannot prevent the sale.  Sharon now has the same right to live in the house that any of the siblings have.  Is there any thing they can do?  Of, course.  What can they do?


DEMAND A PARTITION.  A partition is a division of property held in joint tenancy or tenancy in common so that each owner of an interest in the property becomes the sole owner of a separate piece of the property.




This is a type of joint tenancy between husband and wife.  Whichever spouse outlive the other becomes the sole owner of the property.  The difference between the tenancy by the entirety and a regular joint tenancy is that the husband or wife cannot terminate the tenancy by attempting to sell his or her interest in the property.  In fact, neither spouse can mortgage, sell or give the property away whether while alive or by will, without the written consent of the other spouse.


One of the real advantages of this type of ownership is that a creditor who is owed money by one spouse cannot seize the tenancy by the entirety property to satisfy that debt. Exception:  only if the debt is a debt of both spouses can the property be seized.  So in other words, only death, divorce, mutual agreement, or execution of a joint creditor of BOTH the husband and wife can sever a tenancy by entirety.

In some states, when property is acquired by a married couple the property automatically becomes a tenancy by the entirety.  In other states, a written declaration their intention to hold it as a tenancy by the entirety is required. 


Texas does not follow either rule, because in Texas we have a different type of co-ownership between husbands and wives . . . COMMUNITY PROPERTY!!!




In this type of ownership, property that a married couple purchase during their marriage is COMMUNITY PROPERTY, considered to be owned ½ by each spouse, no matter whose salary was used to purchase the property.


However, property each spouse owned before the marriage took place, or property either spouse received as a gift or inheritance is SEPARATE PROPERTY, owned only by that one spouse, and the other spouse has not interest in it.


So, if the wife works and the husband does not, the wife’s salary is owned ½ by her and ½ by her husband.  The car or house they bought with the salary is owned ½ by her, ½ by him.


Now the rules about the right to sell the community property are a little different.  In Texas, each spouse has the sole right to manage or sell that community property which he or she would have owned if single. 


Since her salary bought the house, it is subject to her control.  It is her SPECIAL community property.


On the other hand, if a couple went in together and each contributed a portion of their salary to the purchase of a house their two special community interests have been COMMINGLED with the result that the property is considered to be MIXED community. Therefore, if they decided to sell the house, both of them must participate; in the transfer of the property.


Now if the wife dies while they still owned the house or car, the husband still owns his ½ of that house or car, no matter who she gives her ½ to in her will.


On the other hand, let’s say the husband possesses a beautiful lake-side view vacation home.  If he owned this house before they were married, it is his separate property and his wife owns no part of it.  He can sell or give it to someone other than his wife, even if she assisted in the care of the home, or even paid parts of the mortgage on the house. This is because of the INCEPTION OF TITLE RULE, which states that the ownership of the property is determined at the moment the property is initially acquired.  So, if you know the history of a piece of property, you can determine if it is separate or community. (Attorney Note:  Wife may not own the vacation home, but she does have an interest in it . . . But we will inform her about her rights later, just in case Husband ever tries to divorce her.)


Question:  What if you do not know the history of a piece of land? How would you determine if it is separate of community? Texas law says if you cannot tell whether a piece of property is separate or community, you must assume it is community.


Additional type of community property:  QUASI-COMMUNITY PROPERTY.  Personal property acquired while a couple is living in a non-community property state, and is still owned by them when they move to a community property state is considered to be quasi (or “almost’;) community property.  If one of the couple dies while they are living in that community property state, the quasi-community property will be treated as community property for the purposes of determining who inherits it.

That's enough for today...we'll talk more later!



Categories: Immigration Law, Will, Probate, Estate Planning, Real Property

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