One of the common occurrences as a real estate agent, are sorting out chattels and fixtures that come with the sale of land and home. In fact, fixtures and chattels are part of every sale in the real estate industry, yet no one really takes the time to talk about what they are or how it works.
So, we will!
What are chattels and fixtures?
A chattel is something that you can easily remove. It’s something like a lampshade or dining room chairs. Fixtures are things that are affixed and are assumed to come with the property upon closing. However there can be exceptions and grey areas.
Should we discuss chattels and fixtures when listing our house?
Absolutely, yes. In fact, we’ve probably had more questions about inclusions and exclusions of fixtures and chattels than anything else!
When we are preparing to list a house for sale in Guelph, we always have an inclusions/ exclusions discussion with our clients in the first place. We ask them to have a very thorough look at what’s in the house. Why?
It’s a lot easier to list a house and properly articulate what’s you’re willing to include and exclude BEFORE an offer comes together. This sets the expectation with potential buyers on what they’re getting for the purchase price.
However, as a buyer it doesn’t mean you can’t negotiate to get chattels or fixtures. Consider the Agreement of Purchase and Sale (APS) as a negotiation. You can propose whatever you want, just as the Seller can counter offer with whatever they want.
So, the easiest way is to specifically outline in a listing what the seller is willing to include or exclude for the purchase price offered.
What chattels do you typically include in a sale?
Generally, none. The principal characteristics of a chattel are physical object(s) that can easily be removed and not attached. likely going to be things like furniture, a BBQ, pots and pans, wall hangings, lamps etc. But that doesn’t mean you can’t negotiate for them (more on that below). Chattels should be viewed as anything that you can remove that involves no mess or no damage.
In some cases, a seller may be moving out of country, or, downsizing from a large detached home to a condo. They may wish to include all furniture and just walk away from the house. This is something that is very common with the sale of a cottage or seasonal home. This often keeps the sale simple and the buyer can just negotiate a price with the buyer outside of the transaction.
As a result, they may be willing to part with some or all of their furniture. If this is the case, we typically advise the client to create a list of the chattels they wish to include with the sale. We include this with the listing as a Schedule that the buyer can just add to the agreement.
Can a seller leave behind any chattels they don’t want?
Absolutely NOT. If it’s not spelled out in the APS or negotiated after the deal, the APS specifically states that the sale of a property will be free of all furniture and debris. This is typically why we advise our clients to do a final walkthrough inspection to try and mitigate these surprises upon closing.
Often times, sellers will think they are doing the new owners a favour by leaving them random items: tables, chairs, patio furniture, plates and bowls. But in reality, the buyer didn’t ask for these items and doesn’t want them. If they did, they would have included them in the agreement. We always tell our sellers clients to assume the buyers want nothing more or less than the agreed to items.
What fixtures are included in an APS?
There are no hard and fast rules of what to include in a contract of sale, because most things can be negotiated. Generally, fixtures are ceiling lights/fans, built-in closets, and coat hooks or any other permanent fixture. The reason is that these items require a tool to remove them and they are considered part of the land.
Here are some items that most buyers expect to receive upon closing as part of the purchase agreement. These include:
Kitchen appliances and basement appliances (fridge, stove, dishwasher, washer, dryer)
Some other appliances that typically inclusions: microwave, water softener and hot water heater (if not a rental)
All window coverings and blinds (these are if they’re attached, but not the actual curtains that go on rods)
Garage door openers and remotes
TV brackets
Security cameras
Of course, there may be other fixtures to negotiate. For example, if the property is a rental in Guelph, the tenant may own the stove. In this case, the listing should exclude tenant’s fixtures.
If there is a concern that a fixture you own which a buyer could consider to be a fixture? Well there is a solution and therefore included, there is a solution. Simply remove it and replace with a basic model prior to listing photos. This way a prospective buyer will only be expecting the item they see, not the one you removed.
What are some of the most common chattels and fixtures items that cause problems?
Inevitably, most transactions have an element of grey items, where the buyer expects something different from the seller. You would typically negotiate this between the buyer and seller realtors, but sometimes even then we cannot create a solution.
In this case, the only way to move beyond is to have the lawyers settle it. And in extreme cases, small claims court may be necessary. However, we encourage clients to not get emotional, as a small amount of money could resolve all issues prior to closing.
Note that some people believe these items will come up in a home inspection. Although they may be discussed, the home inspection is designed to determine major flaws of a home, not fixtures and chattels.
Common examples of fixtures that contribute to grey areas include:
Light fixtures: Does a hanging crystal chandelier light fixture stay with the house? Technically, yes. It’s attached. In real estate, the common term is “ELFS” (existing light fixtures) and it’s often on a list of inclusions.
Wall- mounted televisions and TV mounts- this is a tricky one. Usually a TV mount screws into a wall, which means yes you should consider it a fixture. But, what it holds- a TV- you should consider it a chattel because you can easily remove it. However, if the TV mounts are going with the seller, the seller is usually responsible for patching the holes where the TV mount was.
Outdoor shed- a chattel because you can remove it. However, if the owners mount it into the ground, concrete or something else, some buyers may consider it a fixture.
Flowers- along with bushes and other garden plantings, this is grey. In most cases, these are permanent because they have roots. Some buyers may love the gardens so much that it’s a major factor of their purchase price and could seek legal action if removed.
Other common items:
Mirrors- do they attach to the wall? Or do they hang on a wire? These two situations can make a big difference. The status of items like this should be a discussion point so both the buyer and the seller are aware of who gets to keep it.
Hot tub- probably the most controversial grey area or classification of fixtures. Most buyers assume that because you attach it electrically that it’s part of the physical property. But if it’s just sitting on patio stones, a seller could interpret that as being moveable and want to remove it. It’s extremely important to address this prior to listing.
Tenant belongings or tenant’s fixtures are not a piece of property. Therefore, as they are personal property most buyers understand that these are not to be part of the real property.
Building materials- a seller always thinks it’s helpful to leave extra hardwood flooring, paint cans and ceramic tile for the new buyer. However, sometimes, the buyer doesn’t want these. This should be a discussion between buyers and sellers agents before closing to avoid disappoint on both sides.
How to avoid grey areas and issues with chattels and fixtures
When working out a deal, the first rule: never assume. Buyers and sellers need to be specific and clear.
The best way is to have it in writing with the initial offer so that everyone knows what they’re getting- and not getting. Whether chattel of fixture, just about everything is negotiable. Although not likely to be part of a conditional offer in real estate, these are sometimes vital inclusions and inclusions.
Always get the details down in writing – complete with makes, models and serial numbers. The effort will go a long way toward minimizing misunderstandings, disappointment and litigation.
What to do when there is a dispute over fixtures and chattels
Inevitably, there can be a dispute or a grey area in terms of what to include or exclude in a deal. Often times, you can resolve it through your real estate agent talking with the buyer or sellers real estate agent.
Further, you can likely resolve it without any legal advice. It’s possible there is just a misunderstanding, and once clarified, both parties come to an agreement. Other times, there is an exchange of money to ensure that items remain. This could mean that the buyer agrees to pay a certain amount of money for the relevant item to remain (this is outside of the original purchase agreement)
On any items that the buyer and seller agree to leave or remove, we recommend a final walkthrough (usually worked into the terms of the agreement).
This walkthrough ensures there isn’t much damage to the home by the seller when moving out. It also ensures anything agreed to as a fixture or chattel remains at the home. If there is something missing, or significant damage real estate lawyers have time to fix prior to closing.
Read here for more common real estate terms
Work with a real estate agent who understands fixtures and chattels
Beth and Ryan’s real estate team understands fixtures and chattels. Not every deal is the same and there may be a particular item that a buyer thinks their new home should include.
And the seller may disagree with them! That’s where we come in, to help identify classification of an item. If you’re looking for Guelph real estate agents, give us a call!
