Wednesday, July 6, 2011

Chesapeake Real Estate: Do you know the difference between personal property and a fixture.



This post was inspired by Tim Brown's post Hey That's coming with Me!Thanks for sharing Tim, buyers and sellers often do not understand the difference between personal property and fixtures. They often want to keep items that are sentimental to them and don't understand why it does or shouldn't transfer. When I am working with a seller it is best to address issues of fixtures vs personal property up front. I tell my sellers - if you want it remove it or replace it before we list. I know it sounds simple but sometimes buyers will ask for some personal item furniture, art work, and nowadays flat screen TVs are often requested in an offer. So what do you do as a seller expect the off the wall request but you do not always have to give in. I advice my buyers to ask if they want but to be prepared if they are told H%#@ No! Sometimes it is matter of negotiations, or error, and sometimes its stupidity.

Wikepedia's Definitions- A fixture is a legal concept that includes any physical property that is permanently attached or fixed to real property. If the property is not affixed to real property it is considered chattel/ Personal property. Chattel or personal propertyis converted into a fixture by the process of attachment. Most states look at the method of how a fixture is attached and the intention between the parties as the greatest test of whether an item is a fixture. However if it was not clearly defined in the contract the purpose of the item and degree of attachment will usually be deciding factors.

So if you own wood and nails and its sitting on the side of your house, you might consider it personal property. The buyer may ask for it to transfer so they can build a fix - annexing (using) the wood and nails now makes it a fixture.

This may be easy to see but sometimes the buyer and seller have different intentions. Buyer sees a nice mirror bolted down and attached to wall in living room and doesn't note in contract and is mad when at walk thru there is a white wall with holes. If not specified upfront an issue will arise. What was intention? What was method of attachment?

Seller wants to take new washer and dryer with them. Since buyer just put washer and dryer to transfer on contract seller switches out with old model before walk thru. Buyer has a fit at final walk thru because they are expecting the washer and dryer that was there when they wrote contract and refuses to close. This will be an issue. What do you do?

I once had a seller remove all the toilet paper holders and all the towel bar racks. What was the intended use? and method of attachment?

Buyer sees a nice chandelier in dining room and wants light fixture to transfer and seller sees heirloom from grandma they want to take with them. Existing Light fixtures to transfer was written and agreed to in contract. Seller removes light fixture before closing. This is an issue? How should it be remedied???

So as you see this is not always clear to buyer and seller. If you use a good agent the problem can usually be avoided and if it arises it usually can be remedied quickly.



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