You want to buy a home. The real estate agent has shown you 10 homes in three hours. Your mind is a blur.
You can’t remember if the cute cottage is also the one with the remodeled kitchen. Or is the one with the remodeled kitchen, which includes the new appliances, the one with the horrible floor plan? What about the house with the patio and all that expensive furniture? Did the agent say the furniture is included?
Frankly, there is no substitute for taking careful notes immediately after inspecting each house. But equally important is knowing which items are automatically included in a home sale and which are excluded. If you want an excluded item to be included in the sales price, you’ll have to put your request into the written sales contract.
When you buy a house, you obviously are purchasing the land and the structure. But what about that built-in Sony stereo, the beautiful dining room chandelier, the super-deluxe Wolf stove, the top of the line Sub-Zero refrigerator, the Kitchenaid dishwasher, the Whirlpool washer and dryer, the built-in GE microwave, the Genie automatic garage door opener, the Rheem 50-gallon water heater and the wall-to-wall Stainmaster carpets? Are they included, too?
Unless you list the possibly hundreds of special items in your home purchase contract, it pays to understand the basic law of fixtures.
This law says when a personal property item is nailed, bolted, screwed, plastered, cemented or built into the structure it becomes a fixture and is converted from personal to real property.
For example, that beautiful dining room chandelier was personal property when purchased at the lighting store. But when it was installed with bolts and screws, it became permanently attached to the house and was converted into a fixture which is automatically included in the sale price of the home, unless it is specifically excluded in the sales contract.
If the seller doesn’t want to include the chandelier, it must be specifically excluded in the written sales contract.
The same basic fixture rule applies to the other items listed above. Automatically included in the sales price are the stereo, chandelier, dishwasher, microwave, garage door opener, water heater and the carpets. Why? Because they are built-in or permanently attached to the structure.
But the stove, refrigerator, washer and dryer are not included because they are not permanently attached to the structure.
A good illustration is drapes. The hanging drapes remain personal property because they are not permanently attached to the house. But the drapery rods are screwed or bolted to the dwelling, thus becoming fixtures which are automatically included in the sale. If you want the drapes included, be sure to list them on your purchase contract, otherwise you’ll just get the drapery rods and the seller can take the drapes.
If the buyer and seller disagree as to what is included in the sale and a lawsuit develops, here are the five rules of fixtures which courts apply:
– Method of attachment. In this most important of the tests, courts ask if the disputed item was permanently attached by nails, bolts, screws, glue, cement or other method to the structure. If so, it has become a fixture included in the sales price. Otherwise, it remains personal property.
For example, the stove, refrigerator, washer and dryer above are not permanently attached and can be removed without damage to the building. However, if these items were built-in or otherwise could not be removed without damage, then they became fixtures automatically included in the sale.
– Adaptability for use with the property. Equipment which is built-in, such as intercom or stereo speakers and wires, are fixtures. But a TV which plugs into the wall and connects to a cable wire remains personal property. However, if it was built-in to a permanent cabinet, then the TV would be a fixture included in the sale.
– Intent of the buyer and seller. If the home’s Multiple Listing Service description says: “Beautiful patio with above-ground swimming pool,” that implies the seller’s intent of including the pool in the sale. However, if the seller hung a sign from the dining room chandelier stating “not included,” that shows intent to exclude it from the sale.
– Agreement of the parties. Smart real estate agents know to avoid disputes by listing any questionable items in the sales contract, if the buyer wants them included.
Many printed purchase forms cover this admirably, such as “All items permanently attached to the property including attached floor coverings, draperies with hardware, shades, blinds, window and door screens, storm sash, combination doors, awnings, light fixtures, TV antennas, electric garage door openers, outdoor plants and trees are included free of liens” (from the printed purchase contracts available at Professional Publishing Corp., 122 Paul Dr., San Rafael, Calif. 94903.)
– The relationship of the parties. This determines the result in litigation, if the above tests have been inconclusive. In close cases the courts tend to favor buyer over seller, tenant over landlord and lender over borrower.
However, two major exceptions to these rules apply. One is business trade fixtures which may be removed by a business owner if the premises are restored to their original condition. Examples include restaurant stoves, booths, signs and refrigerators.
The second exception, called the innocent improvement, applies when an improver mistakenly installs a fixture on the wrong property. If a fence company builds a fence around your house, but it should have been constructed next door, the innocent improver can remove the fence.
Further details on the law of fixtures are available from local real estate attorneys.
