It may not be the most interesting or entertaining debate, but it WILL come into play during the purchase or sale of your home.
Definitions aside, it is often left up to the courts to decide what is a chattel and what is a fixture.
Think it’s straight-forward; chattels and fixtures? Well then how would you classify a massive, 900-pound garden gnome?
First, let’s take care of the definitions:
“Chattel” – personal as opposed to real property; any tangible movable property (furniture, domestic animals, etc).
“Fixture” – an object firmly fixed in place
Why do we care?
In the sale of real property, a seller (and the other relevant parties; buyer, agents, lawyers, etc) must determine what objects in and around the property are chattels and which are fixtures so that it can be known which objects will be included in the sale of the property.
Here is an excerpt from The Free Dictionary:
In the law of real property, ‘fixtures’ are anything that would otherwise be a ‘chattel’ that have, by reason of incorporation or affixation, become permanently attached to real property. At law, fixtures are treated in the same manner as real property.
A classic case of a fixture is a building, which in the absence of language contrary in a contract of sale is considered to be a part of the land itself and not a separate piece of property.
Some examples of a fixture are obvious – a piece of lumber sitting in a lumber yard is clearly a ‘chattel.’ However, that same piece of lumber in a fence surrounding real property is considered to be real property itself.
You get the idea…
It should be obvious how these two definitions play a part in the everyday real estate transactions.
The old adage rings true: better safe than sorry.
Misidentifying chattels and fixtures is one of the most common sources of turmoil in real estate, and that’s why a good selling agent will carefully detail what is included along with the real property in the notes on the MLS listing.
But even if you take your time and make a list of inclusions and exclusions, there are still some grey areas.
The most common fixtures included in the sale of real estate are the appliances and electric light fixtures (ELF’s). If a condo-owner has a special, $2,000 chandelier in his living room, he may decide to take this with him to his new home and thus he will note on the MLS listing “Exclude: dining room ELF.”
Drapes, curtains, and shutters are also common inclusions/exclusions as well.
So where does the grey area come into play?
Well for years, we had our television sets sitting on the floor of our homes, or in a wall-unit or some other source of display. Along with the advent of flat-screen televisions came the wall-mount-brackets that we use to hang the televisions on the wall like a painting. Going by the standard definition of a “fixture” above, a wall-mounted television would certainly fit into that category.
If you drill holes in your wall and affix a mechanical contraption to hold your television firmly in place, your television becomes a “fixture,” and by rule, ALL fixtures are included in the sale of real property unless specifically excluded in the contract.
But let’s be serious for a moment – who leaves their 52-inch Sony Plasma TV behind when they move out of their condo? It doesn’t matter how many holes you’ve made in the wall, you’re tearing that sucker out!
However, a buyer may have a case that the wall-mounted television is a “fixture” and if it’s not excluded in the Agreement of Purchase & Sale, then the buyer is entitled to that television.
Clearly, this is why we use the “inclusions” and “exclusions” on the MLS listing and subsequently in the Agreement of Purchase & Sale. But not everything is so cut-and-dry.
Noted real estate lawyer Bob Aaron who writes for the Toronto Star was quoted in one of his articles as saying, “Law students are taught in first-year property courses that chattels are items of moveable or transferable property, unlike land and buildings that are fixed and immoveable.”
But even this definition can create grey areas!
A car parked in the driveway of a home that is for sale is clearly a chattel. It’s not going to be sold with the house just because it happens to sit on the land, and it’s moveable since all you need to do is put in in ‘drive’ and roll down the driveway.
A garden gnome is a chattel since you can pick it up and pack it in a box along with the rest of your belongings.
But what if you had a massive, stone, garden gnome that weighed 900-pounds? If that sat in the middle of your yard (I pity the home-owner, but I digress…), perhaps that would be considered a fixture since it’s essentially immoveable and it’s basically attached to the land much like the house itself!
If you used a forklift, surely you could “move” the garden gnome.
So how then does that moveable/immoveable definition help us?
I had a situation earlier this year where the chattel-vs-fixture debate was taken to a whole other level.
My clients took possession of their new home in North York and much to their surprise, every single towel-bar, shower-rod, and bathroom-mirror had been removed. Suffice it to say, they were less than pleased with the discovery while moving into their first home together!
By definition, a mirror could be a fixture if it were glued or mounted into place, but perhaps it’s a chattel if you can simply pull it down off the wall.
A towel-rod, I must say, is most certainly a fixture since it is affixed into place with screws and drywall-plugs.
So what was the remedy for my clients?
Unfortunately, they had none.
How much time do you want to spend chasing a bunch of sour, cheap, home-owners for taking $40 worth of towel-bars and towel-rods after you paid $800,000 for the house?
Now, if a very ornate, custom-designed mirror valued at $3,000 had been removed, then it would be another story.
But this is exactly why sellers and their agents need to make a list of inclusions and exclusions on the MLS listing!
Sometimes it won’t matter, as was the case of a first-time condo buyer I had a few years ago. This poor girl took possession of her King West condo on a Friday after work during the winter, and she arrived at her new home around 6PM when it was dark outside…..and inside! The seller had taken all the light-bulbs with him when he moved out! How cheap is that!?
Is a light-bulb a chattel or a fixture? Well, I think that the electric light fixture itself is a fixture (it helps that it actually has the word “fixture” in the name so there is no disputing) because it is screwed into place and affixed to the ceiling, but the light-bulb, on the other hand, is an object that is placed into the fixture, and is easily moveable.
So yes, a light-bulb would probably be considered a chattel, and the seller would be well within his rights to take all the light-bulbs with him.
WHY he would do that is another story. Maybe he really needed the $1.20 that they were worth…
Sometimes the list of chattels and fixtures on the MLS listing is a little ridiculous, such as including “Cedar Deck” on the inclusions. Are we really to assume that the seller would remove the cedar deck had he not included it in the listing?
However, consider a hot-tub that is on the back deck.
Or better yet, consider two scenarios with the hot tub:
1) the hot-tub is ON the deck, ie. it sits completely encumbered atop the planks of wood themselves
2) the hot tub is below-grade, ie. the deck was built around it or the hot-tub was built INTO the deck itself
Are these situations different?
Does the fact that the hot tub in scenario #2 sits within the deck itself change the definition of a “chattel” from scenario #1?
Some might say “yes,” while others might say “no.”
I don’t believe there is a single issue in all of real estate that carries as much grey area as the chattel-vs-fixture debate; a debate that is ongoing as countless buyers and sellers take eachother to task over the very definitions which we still can’t figure out!
In my personal opinion, almost ALL these debates could be rectified by stringent usage of the “inclusions/exclusions” on the MLS listings, but something tells me that the problems won’t go away.
Where there is grey-area in real estate, there will always be potential for disappointment.
Just ensure you do your homework on the chattels and fixtures in a given property well in advance of making an offer…