FIXTURE OR CHATTEL? WHAT’S THE DIFFERENCE?



April 29, 2020

By Lorne Shuman

 

Many clients do not understand the difference between fixtures and chattels. As a real estate agent, it is important that you are able to explain the difference between the 2 terms.

 

A chattel is a moveable possession of personal property that can be removed without damaging the property. Normally, chattels are deemed to be excluded from the purchase price unless they are specifically included in the Agreement of Purchase and Sale (APS). Conversely, fixtures are normally included in the purchase price unless the APS excludes them.

 

Generally speaking, the law is that fixtures remain with the property and chattels are items that are removed from the property by the Seller. However, disputes may arise between the parties as to whether a particular items is a fixture or a chattel. The problem often arises after closing when the Buyer moves in and discovers an item that they believed was included in the purchase price has been removed by the Seller. The most important lesson for the realtor is to be clear and precise as to what items are included in the purchase price and what items are excluded from the purchase price. This has to be clearly set out in writing in the APS. If there are disputes, rest assured that the first place the lawyers will look to is the wording in the APS.

 

In order to avoid disputes that can lead to additional costs to your clients, it is wise to ensure that your client, either the Buyer or the Seller is aware of which items will be either included or excluded from the purchase price. In some cases, depending on the item, it is not clear whether the item is a chattel or a fixture. For instance, wall-mounted televisions or brackets holding window coverings are ambigious. The brackets are attached to the wall while the television and window coverings can easily be removed. Similarly, bathroom mirrors, book shelves screwed into the wall and swing sets affixed to the ground are also ambiguous. The lesson here is to clearly state in writing what is staying and what is going so there are no surprises which could delay a closing or lead to litigation. When in doubt, spell it out.

 

On occasions, I am contacted following closing by a Buyer who is upset because the Seller removed an item that the Buyer believed to be included in the APS. There is very little that can be done following closing, but I will usually write a demand letter to the Seller’s lawyer. However, if it goes unanswered or unresolved, the only remedy that the Buyer has is to sue the Seller in small claims court. In most cases, it is not worth the hassle and expense The best practice is to clearly define fixtures and chattels to your clients. Specify which items will or will not be included in the purchase price and most importantly document in writing the fixtures and chattels in the APS.

 

Article Courtesy of:
LORNE SHUMAN
Isenberg & Shuman Professional Corporation
5075 Yonge Street, Suite 804
Toronto, ON M2N 6C6
Tel: 416-225-5136 x216
www.shumanlaw.ca

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