Most real estate transactions involve far more than just a plot of grass, and even more than just the structure of the house itself. Think of everything inside your home. The sofa, ceiling fans, area rugs, teacups, bath towels and coffee maker are among countless physical items in a home. You wouldn’t expect a seller to leave you teacups and bath towels when you purchase their home, but some items are not so obvious and can, and often do, lead to conflict.
So, what stays and what goes?
Real estate is defined as land and all things permanently attached to it, whether natural or artificial. By this definition, the house, plumbing, electrical, drywall and other structural components are part of the real estate and included in any sale.
Personal property would be any object you own – your clothes, dishes, furniture, etc.
But what happens when we bring a piece of personal property into our home and permanently attach it to the structure of the house? A fancy ceiling fan that you purchased at the store is personal property; however, once you install it in your home, it becomes permanently attached and is considered part of the real estate.
In real estate, we call those items fixtures – personal property that has been so affixed to the land or building that, by law, it becomes part of the real estate.
When deciding an argument over whether an item is a fixture or personal property, the courts evaluate the “intent.” To evaluate the intent of the person who affixed the item, courts rely on three basic tests:
- Method of Attachment – How permanent is the attachment? Can it be removed without causing damage to the surrounding property?
- Adaptation to the real estate – How is the item being used? A refrigerator is usually considered personal property, but if it has been adapted to match the kitchen cabinetry, it could be considered a fixture.
- Agreement – Have the parties agreed to treat an item as a fixture or personal property?
The third test is the most important because agreement is how to prevent conflict. As a REALTOR®, it is my job to help sellers understand the difference between fixtures and personal property and make any arrangements necessary for them legally remove items that they do not want to leave behind. REALTORS® on both sides of a transaction should be very thorough in outlining which items stay with a property and which will be taken by the seller.
Sellers should communicate with their agents to make sure their wishes are honored. Buyers should ask questions and review the agreement to make sure they are not misunderstanding what will be present when they show up after closing.