You have found the home of your dreams and are prepared to make a purchase offer. Before you do, make sure you find out what stays with the house and what goes with the seller. Making the assumption that you get everything you see can result in unpleasant surprises and even heated disagreements. To avoid disappointment and disputes, know what property conveys with the sale and put that information in writing.
Generally speaking, real property conveys; personal property can be removed. Fixtures typically transfer to the buyer with the real property unless they have been excluded from the sale. What’s the difference? Real property refers to the land and anything that is permanently attached to it like the house, trees, other buildings, etcetera. Personal property, also called chattel, is movable. It includes items that are not intended to be permanently fixed like furniture, area rugs and potted plants. Fixtures are items that would otherwise be personal property that have been attached. Examples include light fixtures, landscaping, and wall-to-wall carpeting.
These definitions appear to be clear. However, disputes do arise between buyers and sellers when applying those definitions to some items. This is especially true for items that appear to be fixtures. The seller is thinking they are personal property and the buyer thinks they are part of the home and therefore real property. Items that appear to be permanently attached like decorative lighting, ceiling fans, window coverings, and some appliances can present problems. If a dispute does arise about what is real versus personal property, the law specifies criteria for determination. Basically it looks at a number of tests including, but not limited to, the following:
- Method of attachment – If an attached item can be removed without causing substantial damage to the property, it is generally considered to be personal property. On the contrary, if the item is nailed, cemented, bolted, or otherwise attached in such a manner that removal would be destructive to the property, it probably would be part of the real property.
- Adaptability of use – This deals with the nature of the property and whether or not it has been adapted for use in a home. If an item was specifically fitted or designed for a particular location in a home, the argument could be made that this is a permanent part of the property.
- Intent of the buyer and seller – A couple of considerations are typically made here. One is whether the average person would consider the item to be real or personal property. The other relates to what was advertised or presented for sale. For instance, a freestanding washer and dryer could be moved, and a buyer might reasonably expect that the seller would take them unless stated. If the seller, however, advertises the home with a description that says new washer and dryer, then this usually shows the seller’s intent to include them in the sale.
If you are a buyer, the best way to avoid disputes or confusion is to spell out everything to be included in the sale in your purchase contract. Itemize each personal property item that conveys based on your agreement with the seller. Also include a clause in your purchase contract that addresses fixtures so that you can avoid problems. Consider a thorough list of fixtures like lighting, plumbing, heating, built-in appliances, security systems, fireplace inserts, and the like.
The above tips apply whether you are buying an existing home or a new home. Because new homes are sometimes pre-sold before they are built, buyers make decisions based on what is included in the model home. The model often includes fixtures that are upgraded and available at an additional price. Be sure you understand exactly what you are getting with your purchase.
If you are a seller, you can help avoid misunderstandings and possible disputes by being very clear and specific, in writing, about what is included in the sale and what is not. When it comes to fixtures, if you do not want an item included in the sale, consider removing it before the first prospective buyer sees your home. For example, you can take down your treasured chandelier in your dining room or those ceiling fans that you just cannot bear to leave, and replace them with suitable items that will transfer to the buyer.
Whether you are a buyer or seller, be clear about what items stay with the property and what may be removed and put what is agreed to in writing. Then you are better positioned for a smoother transfer of ownership of the real property and all that goes with it.