Linda Gifford's Excellent Advice on Fixtures (Real Estate)

MAR Legal Counsel Linda Gifford has published an article in today's MAR on-line newsletter about problems that can arise with fixtures. 

FORMS FYI by MAR Legal Counsel Linda Gifford:

Purchase and Sale Agreement (paragraphs 3 and 4):  The MAR Contract Review Committee gets requests each year for changes/clarifications to be made to the Fixtures and Personal Property sections of the Purchase and Sale Agreement (paragraphs 3 and 4).  The requests are non-specific, and really just underscore the importance of good communication, and thinking through the expectations of your client. 

The definition of a fixture is "an item of personal property which becomes affixed in such a way or used in such a way as to make it part of the real property." There are numerous items which could be argued either way.  Hot tubs often cause a problem.  If they are sunken, then they are probably a fixture.  If they are free standing, filled with a hose, and simply plugged in, then they are probably personal property. 

Garden sheds are another problem area.  They are typically set on the ground, without a foundation (perhaps just on pavers), and are probably personal property.

A listing agent should walk through the property as part of the listing process looking at things as if they were a potential buyer.  Then ask the seller client what they plan to take and suggest it be removed in advance, or be sure to exclude it in paragraph 3.  And the buyer agent should look at the property as if they were the seller, trying to anticipate what the seller might remove, and asking their client to identify all items they expect would be left, and then naming them in paragraph 4. 

Some recent hotline calls give us more examples.  One involved book shelves which had been built into a bedroom.  It turns out they were free-standing, and simply screwed to the wall behind them for stability.  The buyer agent said they were in a photo in MLS.  That doesn't make them fixtures.  Lots of things show up in photos.  She also said the home had been advertised with "lots of built-ins."  Again, that doesn't necessarily make the book shelves fixtures.  In this case, because of the fact they were attached to the wall, I would probably come down on the side of these being fixtures.  But during walk through, they had been removed, and the buyer and their agent didn't notice, so it did not become an issue at closing.  Once it was discovered, it was too late, they had been sold.  The learning moment in this is to note things that could be removed and list them in the P & S, and to be particularly vigilant during the walk-through.  Another example involved a fireplace screen.  The sellers took it before closing.  It was a custom built fireplace and needed an odd size. The buyers ended up negotiating the fuel to remain in the property instead of the screen, but since have had a very difficult time replacing the screen.  Was it a fixture?  Probably not since it wasn't screwed into the masonry.  But, was it an item that was necessary to the use of the home and difficult to replace?  Yes, so it could be considered to be a fixture. 

Communication is key.