PERSON in Real Estate

Definition

In real estate law, the term “Person” refers to an entity with legal rights and obligations. A person can be classified into two main categories:

1. Natural Person: A human being who has reached the age of majority (legally recognized as an adult).
2. Artificial Person: An entity other than a natural person that is endowed by law with legal rights and responsibilities. Examples include:
   • Corporations
   • Partnerships
   • Governments and governmental bodies
   • Certain other recognized bodies, such as trusts or foundations

Example: When creating or signing a real estate contract, it is important to identify the involved persons precisely, whether they are natural persons (individual buyers or sellers) or artificial persons (corporate entities).

Examples

1. Natural Person in Real Estate: John Doe, a 35-year-old individual, can legally enter into a contract to purchase a house.
2. Artificial Person in Real Estate: ACME Corp. is a corporation that can buy and sell property just like an individual, provided it follows corporate governance procedures.

Frequently Asked Questions (FAQs)

What is the significance of distinguishing between natural and artificial persons in real estate?

The significance lies in legal rights and responsibilities. For example, a natural person has certain consumer protections under the law that might not apply to corporations. Similarly, corporations often have tax and regulatory considerations that must be accounted for.

Can a minor be involved in real estate transactions?

Generally, minors cannot enter into binding contracts; however, guardians or parents can act on their behalf. Some exceptions exist but usually require court approval.

How do partnerships work as artificial persons in real estate?

Partnerships as artificial persons can own property and enter into contracts. The specific rights and obligations depend on the type of partnership (general, limited, etc.).

Can a government be considered a “person” in real estate transactions?

Yes, governments and governmental bodies can buy, sell, and lease property. They are considered legal persons in such transactions.

What are the legal implications of an artificial person defaulting on a property contract?

If a corporation, for instance, defaults, the ramifications follow corporate law guidelines. This can include legal action against the corporation but does not typically implicate personal liability for corporate officers or shareholders, barring circumstances like fraud.

Related Terms with Definitions

• Corporation: An artificial person created by law with rights and liabilities distinct from those of its members. It can own property, enter contracts, and be sued or sue.
• Partnership: An arrangement where two or more persons agree to cooperate to advance mutual interests, which can be a general or limited partnership affecting its real estate dealings.
• Natural Person: A living human being with individual legal responsibilities and rights.
• Majority: The age at which a person legally becomes an adult and can enter contracts, vote, and other legal importantly duties.
• Minor: A person under the age of majority, usually considered not fully legally responsible for their actions.

Online Resources

• Investopedia: Understanding Legal Entities
• Cornell Law School: Legal Information Institute

References

• “Black’s Law Dictionary” – Provides comprehensive definitions and legal context for various legal terms including “person.”
• U.S. Legal Code – Statutory definitions and guidelines for persons in legal contexts, accessible through online resources like GovInfo.

Suggested Books for Further Studies

1. “Black’s Law Dictionary” - Bryan A. Garner
2. “Real Estate Law (South-Western Legal Studies in Business Academic Series)” - Marianne M. Jennings
3. “Property Law: Rules, Policies, and Practices” - Joseph William Singer
4. “Essentials of Real Estate Law” - Lynn T. Slossberg

Real Estate Basics: PERSON Fundamentals Quiz