Real Estate Chattel and Fixture

What is the Difference Between a Chattel and a Fixture?

When it comes to buying, selling, and financing real estate, you might have heard of the terms “chattel” and “fixture”. These terms are used to describe different types of personal property and have some significant legal differences between them.

A chattel is a movable personal property and not permanently affixed to the land. The most common examples of chattels are furniture, appliances such as dishwashers, dryers etc., and personal items. In Ontario, chattels are typically not included in real estate purchases unless specifically agreed by the parties. When a buyer purchases the property, they buy the land or building with fixtures attached to it unless otherwise specified.

However, a fixture is a personal property that is attached or affixed to the land or building in such a way that it becomes part of the subject real estate property, and its removal might damage the land or building. One way of determining whether a personal property is a fixture or a chattel is to observe its degree of attachment to the land or building. If the item is attached in a way that it is an integral part of the property, it might be considered a fixture.

For example, a microwave sitting on a kitchen counter might be considered chattel since it is movable and not permanently attached to the property. However, if the microwave is built-in or affixed and is an integral part of the subject property, it might be a fixture.  

Buyers and sellers can agree to include or exclude certain items in their real estate transactions. However, determining these items is essential as the inclusion and exclusion of chattels and fixtures have different implications in purchase and sale agreements. The wording of many Agreements of Purchase and Sale is structured to compel the involved parties to specify precisely the chattels included in the purchase and the fixtures deliberately excluded from the purchase.

If you are a buyer and a specific item holds significant importance to you, it is crucial that you mention it in the agreement as a chattel that is to be included. It is advisable to provide a comprehensive description of the item in the agreement, especially if it does not fall under the obvious category of a chattel or fixture.

If you are the seller and plan to detach a fixture, it is recommended that you list it in the MLS and make sure that the Agreement of Purchase and Sale clearly states that the fixture is excluded. Or you should consider removing the fixture before selling the property.

Therefore, it is of utmost importance for both parties to ascertain their actual intentions concerning these items and convey them explicitly to each other.

The classification between chattels and fixtures is important, especially regarding financing. When a buyer takes out a mortgage to purchase a property, the mortgage is typically secured by the property itself, including any fixtures. Chattels, on the other hand, are not included in the mortgage and may need to be financed separately.

If you need assistance in understanding the difference between a chattel and a fixture, contact our real estate lawyer today and see how we can help you!

The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.

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