What term describes the act of converting real property into personal property?

The act of converting real property into personal property is referred to as severance. Severance occurs when a fixture, which is generally considered to be part of the real estate, is removed from the property, thereby transforming it into personal property. For instance, if a homeowner removes an attached light fixture from the wall, that fixture, which was once affixed to the property and classified as real estate, becomes personal property after removal.

Understanding severance is crucial for real estate professionals since it impacts ownership rights and the categorization of property during transactions. Recognizing the distinction between real property (land and anything attached to it) and personal property (movable items) can influence appraisals, sales, and legal agreements in real estate dealings.