Chapter 2 - § 2.3 • REAL PROPERTY VERSUS PERSONAL PROPERTY
| Jurisdiction | Colorado |
§ 2.3.1—Classification of Property as Real or Personal
The classification of property as real or personal may have various consequences. A number of these consequences are discussed below.
§ 2.3.2—Law Applicable
The devolution of title to real property and the acquisition of an interest therein, the modes of conveying or encumbering it, and the burdens that may be imposed upon it, within constitutional guaranties, are subject to the power of the state in which it is situated.108 The rights and titles to real property are governed by the law of the situs;109 the question of the ownership of lands within Colorado is a matter to be determined by the Colorado courts, since it involves the construction and interpretation of the laws of Colorado.110 Although a court of one state may enforce specific performance of a contract relating to real property in another state, it may not try the title to real property in another state111 or, in a probate proceeding, order the sale of property in another state.112 But a Colorado court may, apparently, entertain an action for breach of the covenant of seisin in a deed to property in another state.113 Although a divorce court in one state does not have the power directly to affect, by means of its decree, title to real property in another state,114 a court may issue an in personam decree requiring that a party under the court's jurisdiction execute a conveyance.115 The appointment of a conservator vests title in the conservator of all property of the protected person,116 including, apparently, real property in another state.117 Where there is no controlling federal legislation or rule of law, questions involving ownership of land are determined under state law, even where the United States is a party.118 Similarly, the law of evidence of the situs respecting real property rights and titles also governs.119 Real property can be conveyed only according to the law of the place in which it is situated.120
The devolution of title to personal property at death is governed by the law of the domicile of the decedent.121
§ 2.3.3—Method of Conveyance or Encumbrance
Real property must be conveyed by a deed, although an exception exists for conveyance by act or operation of law.122 Personal property may be conveyed by a bill of sale or by delivery.123
A deed of trust or other interest intended to secure the payment of an obligation affecting title to real property is a chose in action (i.e., personal property), which creates a lien on the land but not an interest in the land. Therefore, the statute of frauds does not apply to an oral agreement to execute and deliver a mortgage upon real property, since a mortgage does not transfer title, possession, or any interest other than a naked lien.124
A security interest in realty paper is personal property and is governed by the Uniform Commercial Code.125 But where the security agreement covers both personal property and real property, the secured party may exercise his or her rights regarding the personal property pursuant to the procedures governing real property.126
§ 2.3.4—Descent and Distribution
At common law, when a person died, his or her intestate real estate descended to his or her heirs;127 but his or her personalty, including chattels real, vested in his or her administrator.128 Thus, at common law a chattel real such as a lease for a term of years, which was personal property, was an asset in the hands of the administrator to be disposed of in the ordinary course of administration and settlement of the decedent's estate.129 In Colorado, however, by various statutes, interests in land such as chattels real and leases for a term of years are regarded as real estate instead of personalty,130 and as such they descend to, and, subject to the payment of the debts of the deceased,131 vest immediately in, the heirs.132
Prior to 1903,133 an action to quiet title to, or to recover possession of, real property could not have been brought by a decedent's executor or administrator,134 nor could the executor or administrator have brought an action for trespass or injury to land occurring after the death of the decedent.135 Now, however, the power of the personal representative to do so is granted by statute.136
§ 2.3.5—Legal Remedies
Certain legal remedies are applicable only to personal property. For example, (1) a building attached to the realty is real property, and therefore not repleviable;137 (2) except in the case of shares of stock in a mutual ditch company,138 an action to quiet title to personal property does not lie;139 (3) the implied warranty provisions of the Uniform Commercial Code do not apply to the sale of real property;140 and (4) the Uniform Commercial Code does not govern security interests in proceeds from the sale of real property.141 Conversely, certain legal remedies are applicable only to real property. For example, (1) a furnace not so placed in a building as to become a fixture gives no right to a mechanic's lien upon the building;142 (2) the seller of a warehouse recognized as personal property cannot recover rent upon failure of the purchaser to pay the purchase price;143 (3) a time-share contract does not create an interest in real property, and therefore does not come within the provision of a notice of public trustee's sale stating that the sale was subject to "any interest in and to the subject property, if any, by virtue of unrecorded timeshare documentation."144
In Colorado (at least since the 1971 re-enactment of the criminal code), real property may be the subject of theft.145 Prior to the 1967 amendment,146 only "personal goods and chattels" were the subject of larceny.147 The 1967 amendment introduced the term "thing of value," which the 1971 amendment148 defined to include real property. The phrase "obtains or exercises control" used in C.R.S. § 18-4-401(1) —
. . . includes the conveyance of real property through a quitclaim deed. In other words, a person may obtain or exercise control over real property by obtaining or retaining an interest in real property without authorization and with the intent to deprive another person permanently of the use or benefit of such real property.149
Physical control over the real property is not required.150 The stolen property statute151 does not permit recovery...
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