What are Fixtures and Chattels in Real Estate?

11 March, 2015 | Fiona Taylor

When you list a property for sale, it is important to be clear about what you are selling. And for buyers it is important they are aware of exactly what is included in the deal in addition to the land, such as the buildings and other items that are attached  (known as “fixtures”). Items that can be removed (known as “chattels”) may or may not be included as part of the sale and purchase.

To avoid any confusion and potential disputes (which can be lengthy and costly for all parties involved), it is best practice to list any items which are included or specifically excluded in the sale in the chattels section of the sale and purchase agreement. Why not take your vendor through the property before drafting the agreement – ask them which items they will be taking with them. And the purchaser before signing – ask them to point out items which they expect to be there on settlement?

In our experience, items that are in some way attached to the house (for example by screws, hooks, hanging off hooks, etc) cause the most problems.

If there is a dispute about whether an item is a fixture or a chattel, the starting point, at law, is to consider:

1.1. The degree of annexation (how is it attached to the house?); and

1.2. The purpose of the annexation (what purpose is the item serving? – note it is not a question of why the item was attached to the house).

When looking at these two points, it is helpful to step back and ask yourself whether a reasonable person would expect the item to be sold with the house?

When disputes arise, it is always a “he said she said” scenario with the agent being somewhere in the middle – “you told me the lampshade was included”, “I told you I was taking the dishwasher”, “it’s a fixture, that’s how it was marketed”, “it wasn’t in the agreement”. The one certainty is that there will be costs involved (legal costs, replacement costs, time spent, etc) for someone, sometimes everyone.

For further advice on buying or selling residential property contact residential conveyancing specialist, Fiona Taylor on 09 837 6845 or email fiona.taylor@smithpartners.co.nz