May 21 2008
Should it Stay or Should it Go?
Sometimes, the issue of what property is included in a real estate sale can be a source of disagreement and contention between a Buyer and Seller. When a Buyer looks at information in the MLS, he/she should not assume that the items stated there to be included in the sale will necessarily be there after closing. The agreement of sale is the only document that can be used to determine the terms of the sale.
In Pennsylvania, the Standard Agreement for the Sale of Real Estate contains the following section (paragraph 4), to which both Buyer and Seller need to pay close attention:
4. FIXTURES & PERSONAL PROPERTY (9-05)
(A) INCLUDED in this sale are all existing items permanently installed in the Property, free of liens, including plumbing; heating; lighting fixtures (including chandeliers and ceiling fans); water treatment systems; pool and spa equipment; garage door openers and transmitters; television antennas; unpotted shrubbery, plantings and trees; any remaining heating and cooking fuels stored on the Property at the time of settlement; sump pumps; storage sheds; mailboxes; wall to wall carpeting; existing window screens, storm windows and screen/storm doors; window covering hardware, shades and blinds; awnings; built-in air conditioners; built-in appliances; and the range/oven unless otherwise stated. Also included:
(B) LEASED items (not owned by Seller):
(C) EXCLUDED fixtures and items:
Fixtures are defined as any article that was once personal property but has been attached to the land or a building in such a way that the law interpets it to be a part of the real estate.
There is a legal test as to what constitutes a fixture (real property). The guidelines are: Intent, Method of annexation, Adaptation to real estate, and Agreement. Let’s briefly look at these.
Intent - refers to the intention of the person who installed the item. Was the intention to have the item be permanent or to be removed at some future time?
Method - refers to the permanence of the method of attachment.
Adaptation - refers to the character of the item. Is it being used as real or personal property?
Agreement - refers to agreement between the Buyer and Seller as to whether or not an item is real or personal property.
So, for example, let’s say the Seller has an expensive chandelier hanging in the dining room that he does not want included in the sale. The chandelier can easily be regarded as a fixture. During the time of the listing, the Seller should tag the fixture with a note that the chandelier is not part of the sale and indicate that in the sales agreement.
In order to avoid legal haggling over what may be considered real estate versus personal property, both Buyer and Seller should make sure that paragraph 4 of the sales agreement (or an addendum to the agreement) explicitly states which items will remain with the property and which items the Seller will take.
