Recently, I have seen what I call a number of post-closing disputes between Buyers and Sellers. These are situations where the deal has closed and the Buyer is upset because the Seller removed an item (like a mirror or window covering) which the Buyer believed was to be included with the purchase price of the property. In some situations, the Seller mistakenly took the item believing that they were entitled to remove the item(s) in question. When faced with dealing with these types of disputes, I will look to the Agreement of Purchase and Sale (APS) to determine the rights of the parties. In some cases, the dispute cannot be resolved due to unclear wording in the APS. This column will discuss fixtures and chattels and the importance of clear, concise and unambiguous wording in the APS.
Many clients do not understand the difference between fixtures and chattels. As a real estate agent, it is important that you are able to explain the difference between the 2 terms.
A chattel is a moveable possession of personal property that can be removed without damaging the property. Normally, chattels are deemed to be excluded from the purchase price unless they are specifically included in the Agreement of Purchase and Sale (APS). Conversely, fixtures are normally included in the purchase price unless the APS excludes them.
Generally speaking, the law is that fixtures remain with the property and chattels are items that are removed from the property by the Seller. However, disputes may arise between the parties as to whether a particular items is a fixture or a chattel. The problem often arises after closing when the Buyer moves in and discovers an item that they believed was included in the purchase price which has been removed by the Seller. The most important lesson for the realtor is to make it clear precise in the APS as to what items are included in the purchase price and what items are excluded from the purchase price. If there are disputes, rest assured that the first place the lawyers will look to is the wording in the APS.
In order to avoid disputes that can lead to additional costs to your clients, it is wise to ensure that your client, is aware of which items will be either included or excluded from the purchase price. In some cases, depending on the item, it is not clear whether the item is a chattel or a fixture. For instance, wall-mounted televisions or brackets holding window coverings are ambiguous. The brackets are attached to the wall while the television and window coverings can easily be removed. Similarly, bathroom mirrors, book shelves screwed into the wall and swing sets affixed to the ground are also ambiguous. The lesson here is to clearly state in writing what is staying and what is going so there are no surprises which could delay a closing or lead to litigation. When in doubt, spell it out.
Following closing, there may be a dispute and a Buyer may be upset because the Seller removed an item that the Buyer believed to be included in the APS. There is very little that can be done following closing, but I will usually write a demand letter to the Seller’s lawyer. However, if it goes unanswered or unresolved, the only remedy that the Buyer has is to sue the Seller in small claims court. In most cases, it is not worth the hassle and expense As stated previously, the best practice is to clearly define fixtures and chattels to your clients. Specify which items will or will not be included in the purchase price and most importantly document in writing the fixtures and chattels in the APS. Failing to do this will result in unhappy clients.