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An interesting e-mail received from a reader last week
highlights one of the perils of buying cottage property. At the
same time, it underlines the important difference between
fixtures and chattels when it comes to buying and selling real
estate.
Last fall, Henry retained a well-known local agent to find a
lakefront cottage in Eastern Ontario. An ideal property was
located and both vendor and purchaser signed the offer in
October.
Henry viewed the property twice before signing the offer and
again during a pre-closing home inspection.
Both the vendor and the agent were present during the
detailed and extensive inspections. At each showing, the docks,
which had been removed from the water, were being stored for the
winter on the sea wall at the water's edge.
Neither the vendor nor the real estate agent ever said that
the docks were not included in the sale of the property. The
docks were not excluded on the offer to purchase, nor were they
excluded on the original feature sheet Henry received from his
agent. Henry assumed that they came with the cottage.
On closing day, with the vendor's approval, Henry took
pictures of the property and docks on the seawall.
After closing, Henry was surprised to learn the vendors had
removed the docks from the property. His lawyer complained to
the vendor's solicitor, who replied that the docks were not
included in the sale.
The vendor's position is that the docks were chattels, and
Henry's position is that they were fixtures.
Law students are taught in first-year property courses that
chattels are items of moveable or transferable property, unlike
land and buildings that are fixed and immoveable. If the items
are neither land, nor permanently attached to land or a
building, they are, by definition, chattels. (The word chattel
dates back to feudal times when cattle were the most valuable
item of property — except for land.)
Typically, if an item is attached to land only by its own
weight, it is not usually considered part of the land unless the
surrounding circumstances make it clear that they were intended
to be part of the land.
By the same token, a fixture is a piece of equipment which
has been attached to real estate in such a way as to become part
of the premises, and its removal would do harm to the building
or land.
Using these definitions, a mirror that is hanging on a hook
is a chattel and can be removed by the seller.
The same mirror becomes a fixture if it is permanently
attached or mounted to a wall in the house.
A furnace delivered to a house, for example, is a chattel or
item of moveable personal property when it leaves the store.
When it is installed in the owner's house, and permanently
connected to the ductwork, floor, electrical and plumbing
systems, it becomes a fixture that remains with the building
when the owner moves out.
Over the years, courts have attempted in many cases to
determine whether an object is a chattel or fixture. Judges will
often examine the purpose of the attachment or annexation of the
item to the property, and the actual degree or extent of the
attachment.
Buyers and sellers of land — and their agents — should always
direct their minds to the question of chattels and fixtures
before the agreement of purchase and sale becomes firm.
In the cottage dock scenario, Henry is looking at a bill of
more than $2,000 to replace the docks he thought he was buying.
He says he would never have purchased the property at the
price he paid if he believed the docks were not included.
He blames not only the vendor from whom he purchased the
property, but also the real estate agent whom he relied on for
his expertise and experience.
Henry says the agent had a responsibility to ensure he did
not lose the docks in this matter.
The vendors, he says, should have made certain that the
feature sheet for the property made clear that they were taking
the docks.
Were Henry's docks fixtures or chattels? Ultimately, that
question will have to be decided by a Small Claims Court.
Bob Aaron is a Toronto real estate lawyer. He can be
reached by e-mail at bob@aaron.ca,
by fax at 416-364-3818, or visit
http://www.aaron.ca |
