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Housing Counsel: To Avoid Contract Disputes, Itemize Items That Convey
by Benny L. Kass
Question: We have signed a contract to buy our first house. Before we signed the agreement, there were two refrigerators in the house: one in the kitchen and the other in the basement. The real estate agent told us that both refrigerators would stay with the property. Settlement is scheduled for next week, and now we have been advised that the basement refrigerator will be removed. 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 an appliance store 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 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:
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 advises you that a particular item will convey, have this specifically written into your 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. When real property is involved, verbal statements will generally not be admissible in a court of law. The stakes are too high (especially with property values appreciating as they have been doing in recent years), and there can be a lot of confusion, when the parties do not reduce their promises and their commitments to writing. Too many homebuyers are often disappointed because they relied on what the agent or the seller said -- or what they thought the agent said -- and just did not reduce those representations to writing into the sales contract. In your case, my first question is whether the real estate agent was your agent or the seller's agent. If the latter, I would argue that the second refrigerator should stay with the property, or else the agent should buy you a second one. This is based not necessarily on the fact that it is a fixture, but on the promises made by the seller's agent -- and on which you relied. The seller, on the other hand, may have a case against their agent, if that agent did not have the legal authority to make the representation about the refrigerator. Be on the safe side: put everything into your written sales contract and have it signed by the buyer and the seller. Published: April 11, 2005 Use of this article without permission is a violation of federal copyright laws. |
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