Personalty, also known as personal property, refers to assets that are movable and not affixed to real property (land). Unlike real property, which includes land and buildings, personalty encompasses items like furniture, automobiles, electronics, and jewelry.
Types of Personalty
Tangible Personal Property
These are items that have a physical presence and can be touched, such as:
- Vehicles: Cars, motorcycles, boats, etc.
- Household Goods: Furniture, appliances, clothing.
- Jewelry and Collectibles: Art, coins, stamps.
Intangible Personal Property
These are assets that do not have a physical form but represent value:
- Securities: Stocks, bonds, mutual funds.
- Intellectual Property: Patents, copyrights, trademarks.
- Bank Accounts: Savings, checking accounts.
Historical Context
The distinction between real property and personalty has its roots in common law traditions. Historically, laws governing real estate developed separately from those regulating movable personal items. This separation allowed for more specific legal frameworks and protections tailored to each type of property.
Legal Considerations
Ownership and Transfer
Ownership of personalty can be transferred through sales, gifts, or inheritance. Legal documents such as bills of sale, receipts, or transfer agreements are commonly used to formalize these transactions.
Tax Implications
Personalty may be subject to various taxes, such as sales tax when purchased, and property tax in some jurisdictions, especially for high-value items like vehicles.
Security Interests
Creditors can secure interests in personalty through mechanisms like liens or pledges, which allow them to claim the property if a debtor defaults on an obligation.
Applicability and Examples
Everyday Scenarios
- Household Items: Moving furniture from one home to another.
- Business Assets: Transferring ownership of machinery upon the sale of a business.
- Investment: Buying and selling stocks or bonds through a brokerage account.
Legal Proceedings
In cases of insolvency or bankruptcy, personalty can be liquidated to pay off creditors. The prioritization of claims on personalty is determined by the nature of the creditors’ interests and applicable laws.
Comparisons
Personalty vs. Realty
- Mobility: Personalty is movable; realty is fixed.
- Legal Processes: Different procedures apply to the transfer and taxation of personalty versus realty.
- Depreciation: Personalty often depreciates faster than real property.
Related Terms
- Chattel: Another term often used interchangeably with personalty.
- Fixture: Items that start as personalty but become affixed to realty (e.g., built-in appliances).
- Bailment: A legal relationship where personalty is temporarily transferred without changing ownership.
FAQs
What is the difference between personalty and real estate?
How is personalty taxed?
Can personalty be used as collateral for a loan?
References
- Black’s Law Dictionary
- Property Law: Cases and Materials, 7th Edition
- United States Uniform Commercial Code (UCC)
Summary
Personalty or personal property encompasses movable assets that do not include land or buildings. It ranges from tangible items like vehicles and furniture to intangible assets like bank accounts and intellectual property. Understanding personalty is essential for managing everyday transactions, ensuring proper legal processes, and recognizing the distinctions from real property.
