Issue 29, February 2011: How Attached Are We?

Can a $100 light fixture be the deal breaker in a $4-plus million-apartment sale? It’s possible, as the conveying of fixtures has taken on a larger role in apartment transactions.

Much plays into this. Perhaps it is that civility is changing, or perhaps it is the current market where buyers are seeking to maximize the value they receive and sellers often feel they should be getting more.

Whatever the cause, the issue brings forth emotions and tension. In recent years, new technology has compounded the matter.

The issue revolves around the definition of a fixture and which fixtures are conveyed, i.e., stay in the home as part of the sale. The general legal definition says a fixture is conveyed with the home or apartment if it is affixed and has become part of the real estate. This would include built-in shelves, wall-to-wall carpeting, chandeliers, window treatments and anything attached by a plug, screw, nail, adhesive or something similar. Another part of the definition is the question of how permanently attached the item is and whether damage would be caused by its removal. There is no simple answer. As you can see, there is much room for interpretation.

An heirloom chandelier is a good example. It is attached by wiring and some form of screws or adhesive. Yet, it probably can be removed leaving only a bare spot on the ceiling.

There are two schools of thought on this: the first says that if the item is attached, it is conveyed. The second states that the fixture is not conveyed unless specified in the contract by the buyer.

The simple solution is, brokers who represent either buyers or sellers need to negotiate what is to be conveyed and what is not. Unfortunately, this is not typically done. I believe with the increased number of disputes, it will soon become more prevalent than ever. If not, disagreements will increase and deals broken over issues that are as tiny in the overall scheme of a sale.

Human emotion plays a key role. Sellers often believe they are not getting enough for their apartment and want to either sell items or take items with them rather than give them to the buyer. Buyers believe they should be getting more for their money, especially in a market as opportunistic as this.

In recent years, a new wrinkle has been added — wall-mounted TVs and built-in, sophisticated audio systems. These, obviously, are attached, but are they fixtures and will there be damage if taken down?

There appears to be little case law on this matter, so it is up to buyers and sellers and their brokers to work to resolve the issue. What I typically suggest is walking through the residence with the seller and clearly outlining what is to be conveyed with the sale and what is not. The best route to avoid this is to be specific. Buyers should then also go through the apartment and identify the items they wish to be conveyed upon the purchase and work with the seller to reach a common agreement. Putting this in writing saves a lot of confusion and anger, and the possible breaking of a deal both parties want.