Chattels vs Fixtures in residential sale and purchases
When purchasing a property, purchasers should be aware of the vendor’s obligations regarding the chattels that come with the house. Likewise, vendors should be aware of what they can take, what they must leave, and in what condition.
The standard form Agreement for Sale and Purchase includes a list of chattels to be included in the sale under Schedule 1. These include the following: stove, fixed floor coverings, blinds, curtains and light fittings. (Such chattels will only be included if actually present in the property at the time of the agreement).
Such a list can be amended or added to by either party – many agreements specify that heat pumps, aerials, heaters and garage door openers are to be included for instance. But whatever is listed in the final, signed agreement must be provided.
For the sake of clarity, vendors and purchasers should list the chattels to be included or excluded as specifically as possible to avoid later disagreements. The same goes for any fixtures that the vendor wishes to remove by settlement. Removing a fixture without doing so may then delay settlement or cause the purchaser to claim compensation or retain settlement funds until the item is returned or something is agreed to.
Vendor’s warranties and purchaser’s rights
Both vendors and purchasers should be aware of their rights and obligations regarding what is to be included in the sale.
The vendor’s warranties include that the chattels included in the sale are the free and unencumbered property of the vendor (clause 6.2(9)).
Additionally, under clause 6.2(1) all chattels and all plant, equipment, systems or devices which provide services or amenities to the property, including heating or cooling systems, included in the sale must be provided to the purchaser in reasonable working order or at least in the same state of repair, (subject to fair wear and tear), as at the time the agreement was entered.
So, vendors should ensure that if they have included the heat pump in their chattels list that the heat pump is kept in the property and is in the same condition as when the agreement was entered, subject to fair wear and tear. Vendors can also not remove chattels and replace them with similar ones of lesser worth or materials.
Likewise, purchasers should check all the included chattels (such as ovens and alarm systems) to check that they work so that they know what condition each is in before entering the agreement. Purchasers cannot later try to claim compensation for broken chattels if such chattels were broken at the time of entering the agreement but the purchaser did not check their condition.
Under clause 3.2, the purchaser is entitled to do a pre-settlement inspection of the property, normally conducted a few days ahead of settlement, to ensure that the property and included chattels are still in the same condition as when the agreement was entered. If there are holes in the wall, stains on the carpet or chattels that previously worked no longer do when tried, then the purchaser can claim compensation from the vendor.
What is a fixture and what is a chattel?
The general idea is that fixtures are attached to the land and chattels are not.
Fixtures are things that are annexed to the property and pass to the purchaser under a sale automatically (although it is still wise to specify it will be so if there are any doubts). A typical fixture will be attached to the land in a permanent way such that removing it would cause noticeable damage. Examples of fixtures include an attached garage, carport, and a bolted down garden shed, attached mantelpiece or bookshelves).
Chattels are things that can be more easily removed and are not necessarily attached to the land. The vendor is able to take chattels with them, so long as they do not form part of the chattels in the sale.
But what if an item is attached but also easily removed? There are many items in the grey area and this is where issues commonly arise come settlement when the vendor feels entitled to take the item with them but the purchaser argues that they are a fixture and therefore included in the sale.
What is a chattel or a fixture often depends on the circumstances, what was intended by the parties and the degree of annexation the item in question has to the land. For instance, a washing machine may be considered a fixture where it is attached to the floor or wall, has plumbing and wiring fixing it in. However, if it was actually quite easy to detach and was resting on its own weight instead of being fixed in, it could be argued to be a chattel.
In considering what is a fixture or a chattels, ask what a reasonable person would consider it to be based upon:
- The degree of annexation/ connection to the property.
- The purpose of the item and its annexation.
To be safe, it is best to specify what is included and what is to be removed in the contract. If you would like advice on whether an item is a fixture or a chattel or someone to check that your contract is suitable for your intentions, please contact one of our property law team.