Chattels and Fixtures

Closet organizers – we can spend hundreds, even thousands of dollars on these contraptions, in order to make maximum use of our closet spaces. However, who gets the closet organizer when the house is sold? Can the seller take it with them, or must it be left behind for the buyer? The answer, unfortunately, is not clear, based on the law of chattels and fixtures.

Under the terms of the standard agreement of purchase and sale form, all fixtures must remain with the property unless excluded by the seller and all chattels can be taken by the seller, unless included by the buyer.

What is a chattel and what is a fixture? A wise man once said to me, “If it takes a tool, that’s the rule.” In other words, if the item is so attached to the home or the property that it requires a tool to remove it, then it is presumed to be a fixture. If it is not attached at all, or only attached by, for example, a plug or a hook on a wall, then it is a chattel. However, while some closet organizers can be removed by hand, others are completely built into the wall itself. As you can see, it starts getting confusing, and when there is confusion, lawyers start coming to court to figure it all out.

Over the years, I have heard about sellers taking mirrors, broadloom, drapes, light fixtures, light bulbs, garage door openers, swimming pool equipment, garden sheds and even rose bushes. A garage-door opener looks like a chattel because you can hold the remote in your hand, but it’s a fixture because it’s part of the built-in garage-door assembly. But the answer may be different if the garage unit is only resting on a wooden beam, and is not actually attached.

What about plasma televisions? The plasma television looks like a chattel if it is just affixed to a wall mount, but if it is part of permanent built in shelving and is attached via a complicated electronic hook-up inside the walls, then it could well be considered a fixture and thus must remain on the property after closing.

If the seller wants to keep the dining room chandelier and if you as the buyer agree to it, insist that they install a cheaper version before closing, or you may find the house completely dark when you move in, especially in the winter months.

When you’re a buyer, there is no such thing as too much detail regarding the chattels or fixtures that you expect to receive on closing. My best advice is to list the make and model (and serial numbers, if available) of all appliances that are being included, and also note the colour and location of all drapes, carpeting, pool equipment, satellite dishes, barbecues, sheds, bushes and anything else you expect to be on the property when you move in. Leave nothing to chance. During any home inspection, ask permission and then take photographs of all of the chattels and fixtures that you have included so you’ll know if they’ve been replaced before closing. Insert a clause in your agreement that permits a pre-closing visit so you can satisfy yourself that all the chattels and fixtures that are supposed to remain on the property are still there.

In my view, most closet organizers would legally be considered chattels. Still, if your agreement is specific as to who gets the closet organizer, then both the seller and the buyer will not be confused or disappointed after closing. That is the real lesson to remember.

What condition do the appliances have to be in on closing? What if the fridge breaks down one week after closing? What if the furnace stops working? Whose responsibility does it become?

In most agreements, the buyers typically request that the chattels and fixtures, including all heating, air conditioning and plumbing systems will be “in good working order,” on closing. This means that all chattels and systems will be working when the buyer takes possession of the property. This does not mean that the seller warrants that everything will be working one month after closing. Sometimes buyers can’t check all the chattels and fixtures on the actual date of closing. A clause has been developed to deal with this:

“The seller represents and warrants that all chattels, the furnace and the heating, plumbing and air conditioning systems will be in good working order on closing. This warranty shall survive closing but only to the extent that the said chattels, fixtures and systems are in good working order on closing.”

What this clause means is that if there is not enough time on the day you move in to check all the appliances and systems in your home, and you find out when you try them a day or two later that they are not working, then you can still ask the seller to repair them, as they were likely also not working on the day of closing either.

However, it is important to check the condition of all appliances as soon as possible after you move in.

In a case heard in 2008 in Ontario, a buyer bought a cottage and checked the dishwasher one month after closing, only to find that it was broken. The judge felt that this was too late to complain. Buyers, remember to check the condition of all chattels as soon as possible after you take possession because the seller typically will only warrant their condition until the closing date.

When we say that a warranty survives closing for a month, it is like a warranty that you receive when you buy an electronic item like an iPod. It means that if something breaks down during this one-month period, the seller is responsible to repair it. Sellers do not like to give these kinds of warranties on anything in the house after they move out because there is always the problem of determining whose fault it was that the item broke down.

That is why for the most part, sellers only give a warranty that everything will be working on the day that you move in, and no longer.

Sometimes, however, it is not possible to check whether an item is working, even a few days after you move in. An example might be the condition of the swimming pool when the property is purchased in February and there is no way for a buyer to check to see whether the pool is in good operating condition. One way to deal with this problem would be for the seller to give a warranty about the condition of the pool that will extend until May 1, when the pool is usually opened for the season. If sellers are reluctant to provide this, an alternative would be to ask the sellers to provide the pool closing report typically completed by the maintenance company that looks after the pool, which should indicate the condition of the pool at the time it was closed for the season.
In terms of appliances, if one breaks down after the agreement has been signed but before closing, the seller has to conduct the repairs.

Buyers may be able to purchase after-sale warranty protection for major appliances and home systems after closing, to give you peace of mind that you will not encounter unexpected repair bills during your first year of ownership. Companies such as Direct Energy sell these plans and I encourage buyers to look into them as a cost effective way of protecting your home systems and appliances after closing.

What about rental contracts? Some contracts are not transferable. So do your homework: ask about the hot water tank, the furnace, satellite receivers, air conditioning units, and the alarm system. You may prefer to install your own alarm system and the seller may have to incur a penalty for cancelling the contract before it expires. Ensure you ask questions of the seller regarding assuming contracts and what costs may be involved.

In a court decision in Ontario in 2003, a seller was caught switching appliances before the closing. The buyer had video evidence, taken during the home inspection that clearly showed the appliances - but not the appliances in the house on closing. The sauna wasn’t working; some other systems were also not working. The court ordered the seller to pay for replacing the appliances and to repair the sauna and the disabled systems. The seller also had to pay “punitive damages” - an extra $10,000 - for attempting to deceive the buyers. This case serves as a lesson to sellers that this type of behaviour will not be tolerated.

The lesson for buyers is to make and keep a detailed list or photographs of any chattels or fixtures you expect to receive on closing, and conduct a pre-closing visit to make sure everything you expect to receive is still on the property. Then immediately check the condition of all chattels and systems as soon as you move in. By understanding your rights relating to chattels and fixtures, buyers should be able to effectively protect their interests in any agreement of purchase and sale.

Dos and don’ts for homebuyers
DO keep a detailed list (including make and model where appropriate) of any items in the home you expect to receive
DON’T assume anything
DO insert a clause in your agreement that permits a pre-closing visit so you can verify all items that should be left in the home have been
DO ask permission to take photographs of all chattels and fixtures you have included in your agreement
DON’T forget to check the condition of all chattels and systems as soon as you move in
DO communicate with the seller to avoid any confusion
DO ask questions of the seller regarding assuming contracts and what costs may be involved.

What are chattels and fixtures? What are chattels in real estate?
Chattels definition: if it is not attached at all, or only attached by, for example, a plug or a hook on a wall, then this defines a chattel.
Fixture definition: if the item is so attached to the home or the property that it requires a tool to remove it, then it is presumed to be a fixture.

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