Also known as: realizations · realize · realized · tax realization
Written by attorneys · grounded in primary & secondary sources — see below
An event or transaction that converts noncash assets into cash or substantially alters a party's economic position. The change triggers legal consequences such as the ability to enforce rights against collateral.
Riverfront Developments leased a warehouse to Rebecca Ross without disclosing a hidden structural flaw. After Ross took possession, heavy snow caused a collapse injuring a visitor. The landlord's realization of the risk through prior knowledge established liability under property law.
Ralph Richardson obtained a license to build a road across Radiant Technologies' land after representations it would last ten years. Richardson spent substantial sums. The company's revocation led to realization upon expenditures allowing continued use to recover capital outlay.
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Raymond Ramos faced an attacker wielding a knife and responded with a single punch fracturing the attacker's jaw. Realization that the punch was neither intended nor likely to cause serious harm kept Ramos's conduct within privileged self-defense bounds.
Raven Logistics issued a promissory note granting the holder power to seize and sell equipment upon default. Realization on collateral via the clause prevented the note from qualifying as a negotiable instrument under the UCC.
Regal Apparel sold a building with unstable exterior scaffolding to Roberto Reyes. The scaffolding collapsed onto a pedestrian. Realization that the condition posed unreasonable risk to persons outside the property left Regal Apparel liable as if it retained possession.
A landlord realizes a risk when it knows or has reason to know of a dangerous condition and appreciates that the condition poses an unreasonable risk of physical harm to persons on or outside the leased property.
A licensee who made capital or labor expenditures in reasonable reliance on representations about license duration is privileged to continue use to the extent reasonably necessary to realize upon those expenditures.
An authorization or power to the holder to realize on or dispose of collateral prevents a note from qualifying as a negotiable instrument.
A landlord who transfers possession in a condition it realizes or should realize involves unreasonable risk of physical harm to others outside remains liable for subsequent harm as though it had retained possession.