In my previous newsletter I have tried to educate you on different issues concerning Real estate sale and purchase. Sometimes you are selling property and sometimes buying. As such your role and duties differ as a seller and buyer.
In this article let me to provide you some insight on fixture and chattels and rental items. I have seen in real estate closings that the buyers and sellers take this important aspect quite lightly.
Fixture and chattels
One of the contentious issues arises in a real estate transaction is that of chattels versus fixtures. Sellers and buyers both lose sight of the fact that they are contracting for items that are usually in the hundreds of thousands of dollars. However, there have been instances where a transaction was put in jeopardy for some ten dollar object. The OREA form has made the chattels and fixtures issue much simpler. The rule is simple. If it is fixture it must stay unless specified to be excluded and chattels will not be present unless specified to be included.
The chattels section simply stated asks for “chattels included”.
The rule to follow is “when in doubt spell it out”. Detail in chattels section (model, colour, serial no., etc) is strongly recommended. It is possible for seller to suggest that the fridge in the garage is the one that was the one to be left behind. Not the brand new one the buyer saw in the kitchen. In addition, as a buyer‘s solicitor, it might be appropriate to provide for a warranty in the agreement as to the good working order of the chattels on closing.
When it comes to fixtures, it is important to specify those items that the seller wishes to remove. These may include things like the dining room chandelier.
There are number of items that would be listed in this section. These include hot water tanks, furnaces and equipments, water softeners, air conditioner, etc. It is important to disclose these items. They appear as fixtures. If not mentioned specifically as rental, the buyer is going to believe that the buyer will be the owner of these items when such may not be the case.
I have seen in my practice that the sellers many a times believe that that they own the equipment’s when got installed however in realty these might be rental or leased or the installing company had put a lien against the property and the seller perhaps was unaware. There are many varied situations as such my advice is to consider this section seriously while listing your property for sale or buying the property to avoid legal complications in closing the transaction.
Please note that this is for information only and not to be considered a legal opinion or advice and each situation is different. You need to check up with me along with details of your case.
Feel free to call me
Barrister, Solicitor, & Notary Public
201-10 Kingsbridge Garden Cir, Mississauga, ON L5R 3K6
PH: 905 290 7205