Texas Real Estate State Practice Exam

What is the process of transferring personal property back to being personal property called?

1. Annexation

2. Accession

3. Severance

4. Trade Fixtures

The correct answer is: Severance

The process of transferring personal property back to being personal property is known as severance. This concept is important in real estate as it differentiates between real property and personal property. When something that was once a part of the real property, such as a fixture that was attached to a building, is removed, it becomes personal property again. For example, if a homeowner removes a built-in dishwasher during a renovation, that appliance, initially considered a part of the real property, is now severed from the property, thus reverting to personal property. This distinction is crucial in transactions, as it affects ownership rights and what is included in the sale of real estate. Annexation, on the other hand, pertains to the process of attaching personal property to real estate, making it a permanent part of the property. Accession refers to the addition of value to property through improvements or natural processes and does not apply to the concept of converting property types. Trade fixtures are items used in a business and are typically considered personal property, but they do not address the general process of severance.