There are only two classes of property--realty and personalty. It is important to distinguish between these two classes of property because the laws applied to each class are very different. Robert W. Semenow describes them as follows:
At the outset, it is important to remember that certain words and phrases in connection with real estate have a technical meaning and a different interpretation than is generally attributed to them by the average layman. The all-inclusive term "property" may be said to be the rights or interest which a person has in lands and chattels to the exclusion of all others. Blackstone defines land as comprehending all things of a permanent substantial nature. Estate means quantity of ownership, and title is the evidence of ownership. Estate stands for quantity and title refers to quality. Lands are realty; chattels are personalty. All property of whatever kind and description that is capable of being owned must fall into one of these two classes--realty or personalty. Realty, in turn, includes a twofold classification, corporeal realty and incorporeal realty. Personalty, likewise, may be divided into two groups, tangible (a desk) and intangible (copyright). "Corporeal" is derived from the Latin word corpus, meaning body. Corporeal realty, like land, a building, or a tree, can be seen and felt. In other words, real property includes land and almost anything built upon, growing or affixed to the soil. Incorporeal realty includes rights issuing out of, annexed to, or exercisable within land, such as a right of way. It is frequently stated that realty includes lands, tenements, and hereditaments. The relationship of these three classes may be represented by three concentric circles. The smallest circle embraces lands; the next, tenements. Tenements, therefore, include lands and certain things which are realty but which cannot be described as land, such as a building. The largest circle contains whatever may be classed or inherited as realty. Hereditaments embrace lands, tenements, and certain other things, usually of an incorporeal nature, such as a right of way.1
Title passes differently for realty and personalty and is very often a source of much misunderstanding. Disagreements about classification of property items can seriously damage transaction negotiations.
1Robert W. Semenow, Questions and Answers on Real Estate, Eighth Edition (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1975) p. 214.