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Fixtures versus Personal Property

June 30, 2008 · 3 comments

Attending my company’s quarterly event last week, I was reminded of the many, many aspects of a purchase contract that we agents take for granted, but that the general public is unaware of. One of those aspects regards the transfer of personal property via the sale.

Section 1g of the standard Arizona Residential Resale Real Estate Contract says:

Fixtures and Personal Property: Seller agrees that all existing fixtures on the Premises, and any existing personal property specified herein, shall be included in this sale, including the following:

free-standing range/oven flush-mounted speakers outdoor landscaping, fountains, and lighting
built-in appliances attached fireplace equipment water-misting systems
light fixtures window and door screens, sun screens solar systems
ceiling fans storm windows and doors pellet, wood-burning or gas-log stoves
towel, curtain and drapery rods shutters and awnings timers
draperies and window coverings garage door openers and controls mailbox
attached floor coverings attached TV/media antennas/satellite dishes storage sheds

If owned by the Seller, the following items also are included in this sale:

pool and spa equipment (including any mechanical or other cleaning systems) security and/or fire systems and/or alarms water softeners
water purification systems

The standard contract does a pretty good job of articulating many of the fixtures within a home to provide clarity as to what should stay. However, you may be wondering, what exactly defines a fixture? A fixture is anything in your home that would require a tool to remove from the home. The tool can be as simple as a screwdriver or alan wrench. Another good way to decide if something is a fixture, is to imagine turning your house upside down. Does the item in question stay there? Or does it fall free? Pictures hanging from a nail on the way will fall free. Flat panel TV screens, which are attached to the wall via a bracket, will stay in place. Built in microwaves stay in place. Countertop microwaves fall free.

Refrigerators (those that aren’t built in), washing machines, and dryers are the #1 most commonly requested pieces of personal property. There are simple check boxes to include them in the sale on the purchase contract, because they are so often included in a sale. If you want to purchase the existing washer, dryer or fridge, as part of your home purchase, you should do yourself a favor and not only check the check boxes, but note the make and model number below in the area “As described”. If a $2000 fridge is on display, but upon move-in, you find a $200 fridge, you may have a hard time winning a case that you didn’t get what was called out for in the contract, if the only thing in the purchase contract is a checked box for fridge.

Flat panel TVs and built-in home theatre equipment (a projector and/or screen and/or speakers) are often considered by the owner to be personal property, when by definition (and thus law) they may actually be fixtures. A good real estate agent should provide you with advice regarding what in your home would be considered a fixture versus personal property, but its always handy to know the rules yourself. Also, if you are making an offer on a home, and there appears to be a fixture that isn’t specifically called out in the list above, be sure it gets noted in the contract, just to be clear. This might include a built in china cabinet, for example.

As well, when a seller knows something is a fixture (for example, a dining room chandelier that is a family heirloom), but doesn’t want it to be included in the sale, it is important to exclude this item explicitly in the contract, or a counter-offer to the contract, so that it is in writing. Having it noted in a listing agreement or in MLS is not binding between the buyer and seller. It must be in the contract.

But as better advice: Don’t show anything to a potential buyer, you don’t want to be potentially included in the sale. Sure as rain in Seattle, if you have a 50″ plasma screen mounted next to your pool table, the buyer is going to request, or even demand, it’s inclusion in the deal. If the custom draperies in your bedroom match the custom comforter on your bed, it’s a near guarantee the buyer that falls in love with your home will find them appealing, and want them included in the deal. If the 200 year old fountain from Italy by the front door that took 6 months on a slow boat to arrive, and you have no intention of ever letting it go, is the Feng Shei element that tips the scales for the buyer, it will undoubtedly be a deal breaker if it’s not there at close. The best way to handle items like these is simply to pack them up now, and put them in the garage, at the time you list your home. This way no buyer ever sees them, and thus there will not be a contract dispute. You may have to cover up a now bare spot on a wall, but that’s a much better problem to deal with than fighting over a fixture in an arbitration hearing or court.

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{ 3 comments }

1 Jon Griffith July 1, 2008 at 12:38 pm

One item to note, which has has been a questionable item is the flat panel television. Mounting brackets come in all shapes and sizes. From flat mounts, tilt mounts, flush mounts, and articulating mounts, not all of them will secure the television to the wall, rather, they’ll simply keep it from falling.

Most mounts are gravity mounts which means the bracket on the wall is permanently affixed to the house, usually through studs (if installed correctly,) and a bracket is installed on the television. Two separate parts. The television bracket typically rests on a lip on the wall bracket. I suppose the argument could be offered that the mount is designed to be one full piece and because the television is attached to half of the mount, it is considered attached to the wall mount. Many of these mounts come with a security screw that prevents the television from being accidentally knocked off.

If the security screw, which isn’t required to mount the television, were left out of the installation and you turned your house upside down, the television would fall off of the wall.

The best bet, regardless of anything you’ve heard or speculated upon, is to remove that which you do not want to convey and replace it with something that you do want to convey. Purchase a dummy flat-panel to show what it would look like with a television if you’d like to avoid the gray areas.

2 Eric Murrietta July 1, 2008 at 2:57 pm

Steve,

Thank you for the great information and very useful to lenders as well. Sometimes we have to help real estate agents who list some really random things as part of the contract that can’t be part of the contract. I especially like the part about the heirlooms and chandeliers, things people hardly consider when going through the selling process.

3 Steve Belt July 1, 2008 at 8:01 pm

@Jon- The way a flat panel TV is “attached” is definitely an area in which the line is blurred. I personally have 3 of them attached in various manners around the house, and I really don’t know if any of them would be considered a fixture. I’d have to look at each of them carefully to determine that. And then regardless, if my home were up for sale, we’d be very clear in the listing and any purchase contract to clarify each one of them, if they were on display during the listing period (I’d have a hard time forgoing the one in the exercise room).

@Eric- yes, if there’s a bunch of value assigned to personal property in a sale, that would certainly mess with a loan. Personal property really needs to be addressed via a separate bill of sale in those cases.

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