Author: Warren Gilmore - Law Student
Edited By: Ryan Carson
One of the most common questions that clients have with regard to a real estate Agreement of Purchase and Sale pertain to what household items can be categorized as either a chattel or a fixture.
One of the more general explanations given for helping clients understand the difference between these two classifications involves a theoretical example. If you were to pick up the house (again, this is just theoretical) and shake it upside down, anything that would become lose and fall would be classified as a chattel. Whereas, anything that would remain attached to the house would be classified as a fixture. This is often an effective example for helping clients visualize the difference between the classifications.
More specifically, chattels are items that are not permanently attached to the property, both the land and the house itself. For the sake of filling out the applicable section of an Agreement of Purchase and Sale, chattels typically include major appliances such as stoves, fridges, and dishwashers. However, it is important to include in the appropriate section of the Agreement exactly what items are to be included in the transaction. Failure to specifically list them in the Agreement will have the effect of leaving any unlisted items out of the transaction.
On the other hand, fixtures are items that are attached to the property, either the land or the house, that cannot be removed without considerable effort. These items typically include things like sheds, expensive counter tops, wall mounts, etc. When it comes to the Agreement of Purchase and Sale, all fixtures at the property will be included aside from any that are specifically mentioned as being excluded within the Agreement.
When it comes time to list these items in the Agreement, a prudent measure would be to list the specific serial numbers for any chattels that are to be included in the transaction. This ensures that purchasers will receive that exact chattels or appliances agreed upon, while preventing the sellers from swapping the current appliances out for ones of lesser quality. The more identifying information that can be provided in the Agreement the better.
If you are still unsure of how to classify a particular item in the Agreement, it is always advisable to make any intentions as a clear as possible. The most suitable place in the Agreement to provide for this would be in the conditions section. If necessary, you could attach a new schedule to the Agreement pertaining specifically to any particular items to be either included or excluded.
Articles written by Warren Gilmore:
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Amending Your Last Will and Testament
Trust in Real Estate Services Act
Buying and Selling Real Estate On The Same Closing Day
GST/HST New Housing Rebate
Assignment of an Agreement of Purchase and Sale Separation Agreements and the Transfer of Matrimonial Property Estate Planning for Reconstructed Families
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The Prudent Real Estate Investors Checklist Alternative Approaches To Purchasing A Recreational Property Power of Attorney General Overview Power of Attorney General Overview - Continued Non-Resident Speculation Tax
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