What are the three basic tests to differentiate between real and personal property?

The three basic tests to differentiate between real and personal property are annexation, adaptation, and agreement.

Annexation refers to the physical attachment of a property to real estate. If an item is physically affixed to a piece of real estate in such a way that it becomes an integral part of it, it is considered real property. For example, a built-in appliance in a home would be classified as real property due to its annexation to the structure.

Adaptation involves assessing whether an item is specifically designed or adapted for a particular use related to the real estate. Items that are tailored for a specific function in the property, such as custom cabinetry, may also qualify as real property because of their intended use within that context.

Agreement pertains to the mutual understanding or contracts between parties regarding property classification. If the buyer and seller agree that a particular item should be considered part of the real property even if it is not physically attached, it can be classified accordingly. For example, a seller might include certain fixtures in the sale of a home if this is agreed upon in the sales contract.

These three tests help establish whether an item should be classified as real property, which is typically immovable, or personal property, which is movable and not affixed