Is it included in the sale? Is it a fixture or is it a Chattel?
In the past ten years of working with buyers and sellers the question of will ___________stay or will it go is a question that comes up often and one we need to be very clear on. My answer to this is let’s put it in writing so as to avoid confusion at a later date.
That book case that is screwed to the wall for safety reasons chattel or fixture???
By definition a fixture is an asset that has been installed or fixed to a property as to become part of that building or land in property law, a permanent improvement to a property that becomes part of that property. Such obvious items would be wall-to-wall carpets, sinks, toilets, light fixture, a furnace, and central air condition. Fixtures are considered to be part of the sale and included as part of the purchase price unless otherwise excluded in the agreement of purchase and sale.
A chattel is an asset, which is moveable, removable personal property not fixed to the building such as window coverings, appliances and satellite dishes. A chattel may become a fixture if it is fixed to the home. For example, before it is installed a furnace is a chattel. Once installed, it becomes a fixture. Chattels are not usually included in the sale price of a home unless stated in the agreement of purchase and sale. Sometime sellers will include chattels such as appliances and window coverings to entice buyers to purchase their home especially in a competitive market.
Criteria developed by the courts to determining whether an asset is a fixture or a chattel:
- the method and degree of annexation,
- The object and purpose of annexation.
The first test is not conclusive. Some degree of physical affixation is required before a chattel becomes a fixture. If the asset cannot be removed without serious damage to, or destruction of, the property, that is strong evidence that it is a fixture. But it is neither a necessary nor a sufficient condition.
The second test is now accorded greater significance by the courts than the first. The courts look at the purpose and intention of the asset and its affixation. If, when viewed objectively, it is intended to be permanent and effect a lasting improvement to the property, the asset is a fixture. If the attachment is temporary and is no more than is necessary for the asset to be used and enjoyed, the asset remains a chattel.
So before you put your home up for sale do a room by room walkthrough noting items to be included or excluded from the sale this avoids any misunderstandings down the road. Buyers do understand some items have emotional ties, so perhaps the best strategy is to remove those items and replace them prior to putting your home on the market. This way great Aunt Hazel will not be upset you sold her wedding gift with the house.
Also keep in mind more inclusion generally helps to make a home more appealing to the buyer(s). You could compare this to going out to buy a nice suit and having the sales person throw in the shirt and tie for at the same price opposed to just getting the suit. Which offer would be more appealing to the buyer?
Cheryl Kelly
Broker with Signature Service GMAC Real Estate
www.cherylkelly.ca
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