- Publish Date
- Thursday, 11 February 2016, 1:23PM
- By Nicola Kelland
The law distinguishes between chattels and fixtures. A chattel is a movable property. A fixture is a chattel that has been fixed or attached and can no longer be easily moved. For example, curtains would be a chattel, whereas a built-in bookcase would be a fixture.
The standard sale & purchase contract has a brief list of typical chattels included in a house sale. These are:
- Fixed floor coverings e.g. carpets, vinyl etc.
- Light fittings
- Curtains – usually sheer, designed to minimize daylight
- Drapes – Heavier fabric, usually lined, designed to retain heat
It is very important for sellers and buyers to be clear about what will stay and what can be taken. Confusion between what sellers see as chattels and buyers see as fixtures can cause no end of difficulty at the time of settlement. A recent case heard by the REAA, involved an expensive wardrobe system. The sellers thought it was a chattel and removed it on settlement day, while the buyers thought it was a fixture and should remain in the house. Confusion can also occur around certain objects that may not be as obvious, such as hot-tubs, children's play sets, garden decorations, and wall-mounted televisions.
The courts have debated the issue of chattels and fixtures for many years. On a case-by-case basis, the court will analyse all of the factors to determine whether the object is a chattel or a fixture. The court will consider numerous factors including the weight of the object, the purpose and use of the object, degree of affixation, etc. While these factors provide the courts with some legal terminology to reach a decision, it is clear that there is a great deal of confusion and inconsistency in this area of the law. To avoid time-consuming and expensive litigation, the parties in a real estate transaction should make it clear what items are to be included in the sale and what items will be excluded.
It is important when selling chattels that are mechanical e.g. waste disposals, dishwashers, alarm systems etc., that these are in working order, which is required under the general clauses in the sale and purchase contract. These chattels must be working when the house is settled. I have known of many cases where a pool pump stops working just prior to settlement day, or a seller has needed to replace a dishwasher when the original one finally gives up the ghost.
If you have chattels which for whatever reason don't work, my advice is to list those chattels, but note they are not in working order. Recently I sold a property with an irrigation system, but the irrigation system had not worked for a few years. The equipment etc. was still in the ground and with some work could be serviceable again. But to eliminate any confusion, the system was described as "Irrigation system" (not in working order)
Ultimately, if a seller takes a fixture, the buyer must then decide whether it will be worthwhile to pursue the seller for compensation. For example, if a seller takes the dining room light, the buyer will have to determine whether it is worth the time and money to sue the seller. For this reason, it is particularly important for sellers and buyers to specify anything of significant value in the agreement of purchase and sale. If there is any question as to whether something will be a fixture or chattel, it is best to deal with it ahead of time. Many good transactions between buyers and sellers have gone bad over chattels and fixtures, leaving all parties upset.
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