To Avoid Contract Disputes, Itemize Items That Convey
Written By: Benny L. KassTuesday, April 25, 2017
Question. We have signed a contract to buy a house. When we first saw it, before signing the agreement, there were two refrigerators. One was in the kitchen and one was in the basement. The real estate agent told us that both refrigerators would stay with the property. Settlement is scheduled for next week, and we have now been told that the basement refrigerator has been removed. Our mortgage lender, however, insists on our signing a statement that the refrigerator remains as part of the house, and as part of the lenders security.
I do not understand when a refrigerator is a fixture and when it is not.
Answer: Your question has stumped a lot of people, including several law professors to whom this question was posed.
There is no easy answer as to what is a fixture. An item, standing by itself, may not be a fixture, but when made part of the property, it can change its characteristics. For example, a kitchen sink in a plumbers shop window is personal property. Once it has been installed in your house, however, it becomes a fixture and is part of the real estate.
Generally speaking, and in the absence of a contractual agreement to the contrary, fixtures remain with the house. Personal items can be removed by the seller.
As you can see, it certainly makes a difference if an item is characterized "personal property" or "fixtures." For example, can a seller take a removable wet bar from the basement, even though the plumbing is hooked up? Does a window air conditioning unit convey with the property?
There are no easy answers to any of these questions. The courts have applied a number of tests, including:
For example, the courts have held these items to be fixtures: pews in a church, screens and storm windows specially fitted to a house and electronic computing equipment installed on a floor specially constructed for it.
Going through this fascinating history of fixtures, one important caveat comes to mind.
When in doubt, spell it out in the contract. Furthermore, if the seller or the real estate agent verbally advise you that a particular item will convey, again spell it out in the real estate contract. If you want the refrigerator to convey with the property, put it in the contract to avoid any confrontation in the future.
Too many homebuyers are often disappointed because they >In your case, I would argue that the second refrigerator stays with the property. This is based not necessarily on the fact that it is a fixture, but on the promises made by the sellers agent -- and on which you >Custom in the area is also important. I understand that in the Western part of the country, refrigerators do not necessarily convey; however, they do in the Eastern states. But dont
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