A fixture is a legal concept that includes any physical property that is permanently attached or fixed to real property Real property and personal property are the main classifications of property in the common law. Real property refers to land and the improvements made by human efforts—buildings, machinery, the acquisition of various property rights, and the like. Real property is also termed realty, real estate, and immovable property. If the property is not affixed to real property it is considered chattel Personal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personalty. In the civil law systems personal property is often called movable property or movables - any property that can be moved from one location to property. Fixtures are treated as a part of real property, particularly in the case of a security interest A security interest is a property interest created by agreement or by operation of law over assets to secure the performance of an obligation, usually the payment of a debt. It gives the beneficiary of the security interest certain preferential rights in the disposition of secured assets. Such rights vary according to the type of security interest,. A classic example of a fixture is a building, which in the absence of language to the contrary in a contract of sale, is considered to be part of the land itself and not a separate piece of property. Generally speaking the test for deciding whether an article is a fixture or a chattel turns on the purpose of attachment. If the purpose was to enhance the land the article is likely a fixture. If the article was affixed in order to enhance the use of the chattel itself then the article is likely a chattel.[1]
Chattel property Personal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personalty. In the civil law systems personal property is often called movable property or movables - any property that can be moved from one location to is converted into a fixture by the process of attachment. For example, if a piece of lumber sits in a lumber yard it is a chattel. If the same lumber is used to build a fence on the land it becomes a fixture to that real property. In many cases, the determination of whether property is a fixture or a chattel turns on the degree to which the property is attached to the land. For example, this problem arises in the case of a trailer home. In this case the characterization of the home as chattel or realty will depend on how permanently it is attached--such as whether the trailer has a foundation.
The characterization of property as a fixture or as chattel is important. In most jurisdictions, the law respecting the registration of security against debt, or proof that money has been lent on the collateral of property, is different for chattels than it is for real property. For example, in the province of Ontario Ontario is a province located in east-central Canada, the largest by population and second largest, after Quebec, in total area. (Nunavut and the Northwest Territories are larger but are not provinces.), Canada, mortgages against real property must be registered in the county or region's land titles office. However, mortgages against chattels must be registered in the province-wide registry set up under the Personal Property Security Act.
In the case of a trailer home, whether it is a fixture or chattel has a bearing on whether a real property mortgage A mortgage is the transfer of an interest in property to a lender as a security for a debt - usually a loan of money. While a mortgage in itself is not a debt, it is the lender's security for a debt. It is a transfer of an interest in land (or the equivalent) from the owner to the mortgage lender, on the condition that this interest will be applies to the trailer. For example, most mortgages contain a clause that forbids the borrower from removing or demolishing fixtures on the property, which would lower the value of the security. However, there have been cases where lenders lend money based on the value of the trailer home on the property, where that trailer is later removed from the property. Similarly, a chattel mortgage granted to allow a person to purchase a trailer home could be lost if the trailer is later attached to real property.
The law regarding fixtures can also cause many problems with property held under a lease A lease is a contract conferring a right on one person to possess property belonging to another person (called a landlord or lessor) to the exclusion of the owner landlord, and all others except with the invitation of the tenant. It is a rental agreement between landlord and tenant. The relationship between the tenant and the landlord is called a. Fixtures put in place by the tenant belong to the landlord if the tenant is evicted from the property. This is the case even if the fixture could have legally been removed by the tenant while the lease was in good standing. For example, a chandelier hung by the tenant may become the property of the landlord. Although this example is trivial, there have been cases where heavy equipment incorporated into a plant has been deemed to have become fixtures even though it was sold as chattels.
Because the value of fixtures can often exceed the value of the land on which they were affixed, lawsuits to determine whether a particular item is a chattel or a fixture are common. In one case in Canada, a provincial government argued that a huge earth dam was a chattel, as it was only held in place by gravity and not by any type of affixation (the claim was rejected).
In a sale of land, fixtures are treated as part of the land, and may not be removed or altered by the seller prior to the transfer of the land.
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