Rights in real property - Fixtures

Learning Outcomes

After reading this article, you will be able to identify what constitutes a fixture in real property law, distinguish fixtures from personal property, apply the legal tests for fixture status, and analyze the rights and obligations of owners, tenants, and third parties regarding fixtures. You will be equipped to answer MBE questions on fixture disputes, removal, and exam pitfalls.

MBE Syllabus

For the MBE, you are required to understand the rules governing fixtures in real property. This includes the classification of property, the legal tests for fixture status, and the rights of parties in fixture disputes. You should be able to:

• Define a fixture and distinguish it from personal property.
• Apply the tests for determining fixture status (intention, annexation, adaptation).
• Analyze fixture disputes between owners, tenants, buyers, and third parties.
• Understand removal rules for fixtures in both common and divided ownership cases.
• Recognize the effect of agreements and the rights of good faith improvers and trespassers.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which of the following is most likely to be classified as a fixture?
   1. A freestanding refrigerator in a rented apartment.
   2. Built-in kitchen cabinets installed by a homeowner.
   3. A tenant’s removable bookshelf.
   4. A garden hose left on the lawn.
2. Under the majority rule, which factor is most important in determining whether an item is a fixture?
   1. The cost of the item.
   2. The manner of annexation.
   3. The intention of the annexor.
   4. The color of the item.
3. If a tenant installs a ceiling fan in a leased apartment, when must the tenant remove it to avoid forfeiture to the landlord?
   1. Before the lease ends.
   2. At any time after the lease ends.
   3. Only with the landlord’s written consent.
   4. Never; it always becomes the landlord’s property.

Introduction

Fixtures are a frequent source of disputes in real property law and are tested regularly on the MBE. A fixture is an item of personal property that has become so attached to land or a building that it is legally regarded as part of the real property. Whether an item is a fixture affects ownership, transfer, and removal rights between sellers, buyers, landlords, tenants, and third parties. The classification of an item as a fixture or personal property can determine who owns it after a sale or lease and who bears responsibility for its removal or repair.

Key Term: Fixture
Personal property that has been attached to land or a building in such a way that it is considered part of the real property for legal purposes.

Classification: Fixture vs. Personal Property

The core issue is whether an item remains personal property or has become a fixture. This is determined by applying several legal tests, with the intention of the person who attached the item being the most significant.

Key Term: Personal Property
Movable property not attached to land or buildings, retaining its separate identity and ownership.

Tests for Fixture Status

Courts use a combination of factors to decide if an item is a fixture:

1. Intention of the Annexor: The primary test is whether the person who attached the item intended it to become a permanent part of the property. This is judged objectively, not by secret intent.
2. Manner of Attachment (Annexation): The more permanently an item is attached (e.g., nailed, cemented, or built-in), the more likely it is a fixture.
3. Adaptation to Real Estate: If the item is specially adapted or custom-fitted to the property (e.g., custom window shutters, built-in appliances), it is more likely a fixture.
4. Agreement of the Parties: Any express agreement between parties (e.g., in a lease or sale contract) will control if clear.

Key Term: Annexation
The act of physically attaching personal property to real property, potentially changing its legal status to a fixture.

Key Term: Adaptation
The degree to which an item is specially designed or fitted for use with a particular property, supporting fixture status.

Worked Example 1.1

A homeowner installs a custom-made bookcase that is bolted to the wall in the living room. When the homeowner sells the house, the buyer claims the bookcase is included in the sale. Is the bookcase a fixture?

Answer: Yes. The bookcase is physically attached (bolted), specially adapted to the space, and a reasonable person would intend it to be a permanent improvement. It is a fixture and passes with the real property unless the sale contract states otherwise.

Fixtures in Common Ownership vs. Divided Ownership

Common Ownership

When the person who owns the land also owns the item (e.g., a homeowner installing a furnace), the intention to make it a permanent improvement is usually decisive. Items incorporated into the structure (e.g., bricks, pipes) always become fixtures.

Divided Ownership (Landlord-Tenant, Buyer-Seller, Trespasser)

When the person attaching the item does not own the land (e.g., a tenant or licensee), the law is more protective of the annexor’s rights:

• Tenants: Tenants may remove trade fixtures and items they have installed for their own use, provided removal does not cause substantial damage and is done before the lease ends.
• Licensees: Licensees may remove items if done before the license ends and without damage.
• Trespassers: Good faith improvers may have limited rights to compensation or removal, but generally, trespassers forfeit improvements to the landowner.

Key Term: Trade Fixture
Personal property installed by a tenant for business purposes that remains the tenant’s property and is generally removable before the lease ends.

Worked Example 1.2

A tenant installs a pizza oven in a leased restaurant space. At the end of the lease, the tenant wants to remove the oven. The landlord objects, claiming it is a fixture. Who prevails?

Answer: The tenant. Trade fixtures installed for business purposes are generally removable by the tenant if removal occurs before the lease ends and does not cause substantial damage.

Removal and Timing

• Tenants must remove their fixtures before the lease expires. Failure to do so usually forfeits the fixture to the landlord.
• Life tenants and licensees must remove fixtures within a reasonable time after their interest ends.
• Buyers of real property take fixtures unless the sale contract excludes them.

Agreements Control

Any clear agreement between parties (e.g., in a lease or sale contract) will override default fixture rules. Courts will enforce the parties’ intent if it is explicit.

Good Faith Improvers and Trespassers

Modern courts may allow a good faith improver (someone who reasonably believed they owned the land) to recover the value added or remove improvements, but this is not guaranteed. Bad faith trespassers generally have no rights.

Worked Example 1.3

A tenant in good faith installs a greenhouse on leased land, believing the lease allows permanent improvements. The landlord refuses to compensate or allow removal at lease end. What is the likely result?

Answer: The tenant may be allowed to remove the greenhouse if it can be done without substantial damage and before the lease ends. If not, some jurisdictions may allow compensation for the value added, but this is not universal.

Exam Warning

On the MBE, do not assume that all attached items are fixtures. Focus on the intention, method of attachment, and adaptation. Watch for express agreements that override default rules.

Revision Tip

If a fixture dispute involves a tenant, always check if the item is a trade fixture and whether removal occurred before lease expiration.

Summary

Fixtures are items of personal property that become part of real property when attached with the intent to make them permanent. The main test is the annexor’s objective intention, but courts also consider the manner of attachment, adaptation, and any agreement. Tenants and licensees have special rights to remove certain fixtures if done timely and without damage. Express agreements control. Buyers take fixtures unless excluded by contract.

Key Point Checklist

This article has covered the following key knowledge points:

• A fixture is personal property attached to land or buildings with intent to make it part of the real property.
• The main test for fixture status is the annexor’s objective intention, judged by a reasonable person.
• Courts also consider the manner of attachment, adaptation to the property, and any express agreement.
• Tenants may remove trade fixtures if done before lease ends and without substantial damage.
• Agreements between parties override default fixture rules.
• Buyers of real property take fixtures unless the contract states otherwise.
• Good faith improvers may have limited rights; trespassers generally forfeit improvements.
• Removal must occur before the relevant interest (lease, license, life estate) ends.

Key Terms and Concepts

• Fixture
• Personal Property
• Annexation
• Adaptation
• Trade Fixture