> Source authority: CA Department of Real Estate (DRE) Salesperson Exam Content Outline, CA Business and Professions Code §§10000–10580, CA Civil Code, CA Health and Safety Code. All percentages reflect the DRE's published exam weight distribution.
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Estimated study time: 45 minutes
Content:
Real property consists of land and everything permanently attached to it, including the soil, minerals beneath the surface, airspace above, and improvements such as buildings and structures. Personal property (also called chattel) is movable and not permanently affixed to land. The legal distinction matters enormously in real estate transactions because real property transfers by deed while personal property transfers by bill of sale. When a buyer and seller disagree about whether an item conveys with the property, courts apply the fixture analysis.
A fixture is personal property that has been attached to real property in such a way that it legally becomes part of the real estate. California courts use the MAIRI test (also presented as four factors) to determine fixture status (MAIRI — sometimes taught as 4 factors where the second I = Intent is the dominant factor; M=Method, A=Adaptability, I=Intention of parties, R=Relationship, I=Intent — the key determinant): (1) Method of annexation — how firmly is the item attached? Items bolted, nailed, cemented, or plumbed in favor fixture status. (2) Adaptability — is the item specifically adapted for use with the property? Built-in appliances, custom window treatments, and central vacuum systems favor fixture status. (3) Intent of the annexing party — what did the person intend when attaching the item? This is the most important factor in California. A chandelier installed by a homeowner intending to sell likely stays; the same chandelier installed by a tenant intending to remove it likely goes. (4) Relationship of the parties — courts are more protective of buyers and lenders than landlords or sellers.
Trade fixtures are an important exception. These are fixtures installed by a commercial tenant for use in their business (a diner's commercial hood vent, a salon's styling chair bolted to the floor). Trade fixtures remain the personal property of the tenant and must be removed before the lease ends, with the tenant responsible for any damage caused by removal. If the tenant does not remove them before lease expiration, they may legally become the landlord's property through accession.
Rights that attach to real property ownership include surface rights (use of the land surface), subsurface rights (minerals, oil, gas, water beneath the surface), and air rights (the space above the surface). California follows the doctrine of correlative rights for groundwater, meaning landowners share the water table proportionally. Riparian rights attach to property bordering flowing water (streams, rivers), giving the owner reasonable use. Littoral rights attach to property bordering standing water (lakes, oceans). The state owns the land below navigable waterways.
When completing a California Residential Purchase Agreement (RPA), the contract specifies what is included in the sale. The default is that all attached items convey unless specifically excluded. Sellers who wish to keep an attached item (a sentimental chandelier, for example) must exclude it explicitly in the listing and purchase agreement. Failure to do so may constitute a breach of contract or misrepresentation.
Key Terms:
Quiz Questions:
Q1. A seller installs a custom built-in bookcase in the living room. At closing, the seller removes it and takes it. The buyer objects. Which factor in the fixture analysis most strongly supports the buyer's claim that the bookcase should have conveyed? A) The bookcase was expensive to build B) The bookcase was specifically adapted and fitted to the room's dimensions C) The bookcase was built by a contractor D) The bookcase was listed in the MLS photos Answer: B — Adaptability (the item was custom-fitted to the specific space) is one of the four MAIRI factors favoring fixture status. While MLS photos can support intent arguments, adaptability is the most direct fixture factor in this scenario.
Q2. A tenant who operates a hair salon installs shampoo bowls bolted to the floor. When the lease ends, the tenant removes them, leaving holes in the tile. Which statement is correct under California law? A) The shampoo bowls became real property upon installation and belong to the landlord B) The shampoo bowls are trade fixtures and the tenant may remove them but must repair the damage C) The shampoo bowls are trade fixtures and the tenant may remove them with no duty to repair D) The shampoo bowls can