Agreements of Purchase and Sale: Fixtures, Chattels and Rental Items

Fixtures and chattels

The specification of chattels versus fixtures happens to be one of the more contentious issues arising in a real estate transaction.  To recap past articles, generally chattels are generally easily movable property such as household appliances and furniture and fixtures are generally immovable property such as a well in the backyard or a kitchen island.  While the standard form Ontario Real Estate Association  (OREA Agreement) has made the chattels and fixtures issue simpler to specify, buyers and sellers should always take care in specifying exactly what stays and what goes.  The OREA Agreement states “Fixtures Excluded” and “Chattels Included”.  Should it be a fixture, it has to stay unless it is specifically excluded; conversely a chattel would not be included unless specified in the Agreement. The rule to follow is “when in doubt spell it out.” Extensive details in the chattel section (i.e., model, colour, serial no.) are recommended strongly because believe or not Sellers have been known to switch chattels such as appliances for ones of lesser value right before the transaction.  So if the buyer wants that high end stainless steel talking fridge, the buyer should make sure that the model and serial number of that specific fridge is spelled out in the Agreement.  Further it is appropriate to provide for a warranty in the Agreement as to the “good working order” of the chattels on closing.  Often lawyers and or Realtors will take out the word “good” as this word is open for interpretation.  In regards to fixtures, it is important to specify those items that the seller wishes to remove, such as things like the “dining room chandelier” which in case law has been determined to be a fixture (not easily movable).

Rental items

There are a number of items, which could be listed in this section, such as, hot water tanks, water softeners, furnaces and equipment. Accurate disclosure of these items is imperative here, because they may appear to be fixtures. Should such items be not mentioned in this section, the buyer may be under the erroneous impression that he or she would become the owner of these items only later to find out that they are liable to continue leasing or renting that equipment.

Don’t do anything before fully understanding your rights and obligations.  Contact the lawyers at Levy Zavet today to hear more about how we can make your next Real Estate transaction as smooth as possible.