How can real property be converted to personal property?

The process by which real property is converted into personal property is known as severance. Severance refers specifically to the act of separating a portion of real property from the land itself, thereby transforming it into personal property. For example, when a tree is cut down or a building is dismantled, the removed items are no longer considered part of the real estate and become personal property.

This process is significant in real estate law as it delineates the distinction between what constitutes real property and what is classified as personal property. Understanding severance helps in areas such as property sales, taxation, and legal ownership rights.

The other options refer to different legal concepts: transfer involves conveying ownership rights, assignment usually pertains to a legal obligation or lease, and exchange typically refers to a trade of properties or goods without addressing their classification as real or personal property. Each of these serves a distinct role in property law but does not specifically relate to the conversion of real property into personal property like severance does.