Chattels and Fixtures: A Seller’s Perspective
Once a buyer’s offer has been accepted, one of the main points in a written real estate agreement that needs to be cleared up is what stays in the property and goes.
This brings up the distinction between fixtures and chattels.
By definition a “fixture” refers to generally anything that is screwed, glued, nailed, bolted or attached to the property in any form. Fixtures are deemed to go with the house unless it is expressly excluded.
Obvious items that are defined as a fixture would be wall-to-wall carpets, sinks, toilets, light fixture, a furnace and central air condition. Fixtures will be considered to be part of the sale and included as part of the purchase price unless it is otherwise excluded in the sales agreement.
“Chattels” are all other items that are not fixed to the house, and generally you will not find these items included in the purchase price unless the real estate agreement specifically states it. Chattels are moveable, removable personal property.
To entice a buyer, the seller will sometimes include chattels into the price of the home, such as appliances and window coverings.
Between you and the buyer, you have to understand the distinction between fixtures and chattels. You have to draw a clear line between what you both expect to be included and/or excluded as part of the purchase, regardless of what class they might fall into.
Criteria developed by the courts to determining whether an asset is a fixture or a chattel is as follows:
• The method and degree of annexation
• The object and purpose of annexation
The first test is not always conclusive. There will always be some degree of physical affixation before a chattel becomes a fixture. An asset is a fixture if it can be removed without serious damage to or destruction of the property.
The second test is accorded with greater significance by the courts. The courts will look at the purpose and intention of the asset and its affixation.
When viewed objectively, if it is intended to be permanent and effect a lasting improvement to the property, then the asset is a fixture. If the attachment is temporary and is only necessary to be used and enjoyed, then the asset remains a chattel.
Take a walk through your home, room by room and look at what you want to be included in the house price.
Keep in mind what will be appealing to the buyer, and from there you will have the general idea of what to include with your house price.
Julian Merry is a Broker with Royal LePage/Johnston & Daniel Division. Julian is a regular contributor to the Muddy York Toronto Real Estate Blog. Julian’s website is located at www.julianmerry.com.
