Ian has an MBA and is a real estate investor, former health professions educator, and Air Force veteran.
Fixtures and Personal Property
Jenny and Tom have found the house of their dreams and love nearly everything about it. From the appliance-stocked kitchen and laundry room to the windows, they are happy to pay what the sellers are asking. While putting together the offer their agent tells them that they need to include a part about fixtures and personal property to make sure they get exactly what they want. Let's make sure that Jenny and Tom understand these terms and properly go about completing the offer to avoid any misunderstanding about what is included in the sale.
In real estate transactions, every physical part of the property for sale is classified as different kinds of property. The house itself and the land is real property, while nearly everything else is considered personal property. Why the distinction? In a real estate transaction, the default assumption is that the sale is for the real property. Transactions involving personal property are a separate matter.
An important third classification is fixtures, which include the items that exists in the gray area between the other two. A fixture is an item that is physically attached to the house, while personal property is an item which can be removed without making changes to the physical structure of the house. Ceiling fans, built-in bookshelves, and kitchen counter tops cannot be removed without physically taking apart these structures at their attachment points.
For example, Jenny loves the curtains in the dining room. The curtains are hung on curtain rods which are screwed onto the wall. When the sellers leave, the rods will remain with the property as fixtures while they are free to take the curtains as personal property. A microwave oven that sits on the counter and is plugged into the wall is a piece of personal property. A microwave that is bolted to the wall above the stove is a fixture and would be expected to be left behind. A carpet is a fixture since it is stapled or glued to the floor, while a rug just sits on the floor and can be easily rolled up.
How to Avoid Problems
Buyers and sellers can use a couple of best practices to clear up any confusion. When listing the property, the seller and the agent should be sure to mention whatever fixtures are explicitly excluded from the sale. For example, if the seller intends to take those curtain rods, then that should be mentioned up front in the listing.
Sellers can make requests in the purchase offer for specific items that they would like to have included in the sale. If Jenny really wants those curtain rods, she should make sure the purchase offer includes a clause that the rods stay behind. There might be some back and forth negotiation over whether or not it is priced out separately or will just be included in the sale price.
A final walk through prior to closing is essential to make sure that there are no issues. If those rods are missing even though the seller agreed in writing to leave them behind, then Jenny can ask for compensation or compel the seller to return them before the deal is finalized.
In a real property transaction physical items can be classified as either fixtures or personal property. Fixtures are those items which are physically attached to the house while personal property includes all other types of property such as curtains, rugs, and portable appliances. In a property sale, confusion can be avoided with careful documentation. The seller should explicitly list any items of personal property that are not included in the sale and the buyer needs to specifically ask for any items of personal property that they want to purchase along with the home.
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