The difference between a fixture and a chattel

If you have signed a contract for the sale or lease of a residential or commercial property, you may have encountered the terms "fixtures" and "chattels," which can be easily confused. Some items may be explicitly defined in the contract, but others may not be. To avoid confusion, it is important to understand the difference between these terms.

There are two common law rules to determine if a property is a fixture or a chattel. The first is the degree of annexation, which refers to how physically attached the property is to the land or building. A fixture is generally considered to be attached to the building, while a chattel is moveable property that does not belong to the land.

The second rule is the purpose of annexation, which involves determining whether the property was installed with the intention of remaining with the land or building. This determination is based on the facts and circumstances of each case.

The easiest way to remember a fixture is if you tipped the building upside down, a fixture is everything that would still be attached. Everything that would fall out is a chattel.

In some cases, the distinction between fixtures and chattels may be debatable, examples such as hanging pictures and tapestries.

Knowing the difference between fixtures and chattels is important to understand what property is included in a contract of sale or lease. To avoid confusion it is best to disclose whether or not a fixture or chattel is included in the sale.

Thank you to Rebecca Petroff from Sunstate Conveyancing for sharing this fantastic tip with us.