First, let’s start with the basics.
What is a fixture? There are a lot of different definitions out there. There has been case law breaking down personal property versus fixture into three categories:
- Very clearly personal property. Not peculiarly fitted, not affixed to the property, zero intention of making it a part of the realty.
- Very clearly a fixture. So connected to the property that it “cannot be removed without material injury to the real estate or to themselves.” Clayton v. Lienhard, 312 Pa. 433, 436-37 (1933).
- The gray area. Physically connected with the real estate, able to be removed without destroying, but it comes down to the “intention of the parties at the time of the annexation.” Clayton v. Lienhard, 312 Pa. 433, 437 (1933). What is the intention of the party at the time they installed the personal property and whether they intended it to be permanently in the home when initially installed.
Unless otherwise stated by the parties, fixtures will generally convey with a property, while personal property does not. Of course, the fights between buyers and sellers generally happen over that third category of items that might be a fixture…but might not… and they generally occur because one party or the other (or both) makes an assumption about how the other side sees a particular item. That is where the Fixtures and Personal Property paragraph of the PAR Agreement of Sale comes into play.
Rather than guess on some of the more common items that might cause disagreements, the form has handy-dandy lists of items that are very commonly argued over and defaults them to be either included or excluded. It’s a big list, and if you have not taken the time to read it recently, you might find something you didn’t realize was already there. In fact, the PAR Legal Hotline recommends that agents (on both sides) should be reading this paragraph to their clients (on both sides) every single time a contract is being written. Not just reading it, in fact, but asking their clients “Does this sound right to you? If there’s anything else that you think should stay/go, now is the time to write it in.”
And that’s exactly what you should then be doing. If you are the buyer’s agent and you’re not sure if something your client wants is automatically included? Write it in as an inclusion. If your seller wants to take something that buyers might often expect would stay? Write it in as an exclusion. Simple. (Even better, if it’s something like a chandelier, artsy mailbox or expensive curtain rods, they could just remove the items before the property goes on the market to eliminate any confusion… but we run a Legal Hotline and not a Staging Hotline, so use your best judgment.)
Now it’s the week of settlement, sellers moved out, the buyers are doing their pre-settlement walk through and the (insert item here) is missing. Buyer’s agent frantically calls us, the Legal Hotline, asking what to do. In the past, we have had wine coolers, pool tables, pellet stoves and other things that are on both sides of the arguments. Even if the form is clear (“mailbox” is an inclusion by default, but there’s no mailbox on the post any more), there are no magic words to make the item show up or disappear (if the seller left behind something the buyer doesn’t want). Unfortunately, at that point it’s usually beyond the form and becomes all about negotiations. Both parties get mad at each other right near the end, and you can be sure that both parties are mad at both the agents for not realizing they needed to work it out earlier. It’s what they call a lose-lose – especially if the clients look to the agents to try to make it right in some way
Side note: One of the most comments we hear is “but it was in the MLS.” Doesn’t matter. The Agreement of Sale contains what’s called an “integration clause,” which states that the parties agree that all terms of the sale are included in the agreement and not in any other place. If the seller lists things they intend to take or intend to leave it is just that – a stated intention. But it’s not a binding term of the contract until it’s written in, so the seller can’t rely on it to justify an exclusion, nor can the buyer rely on it to justify an inclusion. If your client wants something, just write it in.
A lot of problems can be worked out by reading and communicating, but especially in paragraph 7. Calling the Legal Hotline will not give your clients the slam dunk they are looking for. We hear a lot of excuses, but at the end of the day, you as an agent need to look out for what your client wants and ensure that the contract reflects that desire.