Real property

Key Takeaways

• Real property is the land itself, the buildings, improvements, and fixtures attached to it, and the rights and privileges that run with the land.
• RCW 84.04.090 defines real property for taxation as the land plus all buildings, structures, improvements, or other fixtures on it, together with the rights and privileges belonging to it.
• Real property moves by deed. RCW 64.04.010 requires a deed for every conveyance of real estate or any interest in it.
• A mobile home becomes real property in Washington only once it has substantially lost its identity as a mobile unit, sitting on a permanent foundation with fixed utility connections (RCW 84.04.090).

What It Means

Real property is land, everything permanently attached to that land, and the legal rights that come with holding it. The physical half is easy to point at: the ground, the house, the garage, the well, the fence, and every Fixture bolted, wired, or plumbed into place. The legal half is the part students underestimate. Ownership carries a Bundle Of Rights, which includes the right to possess the land, use it, exclude other people, and transfer it, along with interests in the space above the surface, the substances below it, and any water rights that attach.

The contrast term is Personal Property, which is movable and unattached. The same object can cross between the two categories. A stack of lumber sitting in a driveway is personal property, and the deck built out of that lumber is real property.

Some textbooks split the idea three ways, calling the ground land, calling land plus improvements real estate, and reserving real property for the physical thing plus the rights. Washington's statutes do not follow that split. RCW 64.04.010 says real estate and RCW 84.04.090 says real property, and both reach the land together with what is attached to it.

How It Works in Washington

In Washington, RCW 84.04.090 supplies the working definition. Real property means "the land itself, whether laid out in town lots or otherwise, and all buildings, structures or improvements or other fixtures of whatsoever kind thereon," plus "all rights and privileges thereto belonging or in any wise appertaining" and the substances in and under the land. The same section settles the manufactured housing question: a mobile home counts as real property once it "has substantially lost its identity as a mobile unit" by being permanently fixed in location and "placed on a permanent foundation (posts or blocks) with fixed pipe connections with sewer, water, or other utilities."

WAC 458-12-010 fills in the fixture half of that definition, covering "any fixture permanently affixed to and intended to be annexed to land" or intended to be a component of a building on the land, including machinery and equipment that become fixtures. The rule adds that intent "is to be gathered from all the surrounding circumstances at the time of annexation or installation of the item," looking at the nature of the item, the manner of annexation, and the purpose behind it, rather than at what the installer later says they meant.

Because it is real property, it changes hands by deed. RCW 64.04.010 requires a deed for every conveyance of real estate or any interest in it, and RCW 64.04.020 requires that deed to be in writing, signed by the party bound, and acknowledged. The Real Estate Excise Tax rules reach wider still: WAC 458-61A-102 defines real property as "any interest, estate, or beneficial interest in land or anything affixed to land, including the ownership interest or beneficial interest in any entity that owns land," so that tax follows interests in landholding entities and not only recorded deeds. Our post on Washington's evolving tax landscape covers how brokers handle those conversations.

Example

Priya buys a five acre property outside Olympia for $340,000. The statutory warranty deed conveys the land, the house, the pole barn, the well pump, and a recorded easement that lets her reach the county road. Every one of those is real property, and every one of them passes with the deed without being itemized.

The seller also offers his tractor, a portable greenhouse resting on skids, and a chest freezer for $18,000. Those are movable and unattached, so they are personal property and travel on a separate bill of sale. Priya pays $358,000 in total, but only $340,000 of it buys real property, and that is the figure the excise tax on the conveyance is measured against, since WAC 458-61A-102 ties the selling price to the value of the real property conveyed. The lender's deed of trust encumbers the same $340,000 of real property, which is why the tractor never appears in the appraisal or the collateral.

Common Mistakes and Exam Traps

• Fixtures are real property. Once an item is attached with the intent that it stay, it conveys with the land unless the purchase and sale agreement carves it out.
• Rights are real property too. An easement, a mineral interest, and water rights are interests in land even though there is no object to point at.
• Standing timber owned separately from the land is excluded from real property by RCW 84.04.090 and listed as personal property in RCW 84.04.080.
• A mobile home is not automatically real property. RCW 84.04.090 requires that it lose its identity as a mobile unit through a permanent foundation and fixed utility connections.