Lesson 3: Legal Test of Fixtures

Three Conditions of Trade Fixtures

1. Essential for tenant business operation 2. Detachable without damage to the property 3. moved out within a certain period of time

Agreement of the Parties

Agreements and Bill of Sales

Method of Annexation

Can be removed without damaging what it's attached too

Relationship of the Parties

If there is a dispute between the people who added the items and the person who removed it. The court usually favorite tenants over landlords, and buyers over sellers in these situations.

Intention of Placing Items on the Land

Intention is the most important consideration in determining if the item should stay or go. Original intentions may change over time.

Five Legal Tests of a Fixture

Method of Annexation Adaptability of item for land's use Relationship of the parties Intention of the person placing the item Agreement of parties.

What does MARIA stand for

Method of Annexation (Attachment) Adaptability of Item to Land's use Relationship of the Parties Intention in placing Items on Land Agreement of the parties

Agreement

Simplest and first test: if the parties have agreed that an item will stay or go, then the agreement must meet legal tests

Relationship of the Parties

When a dispute occurs courts tend to favor tenants and buyers over landlords and sellers

Adaptability of Item to Land's use

adaption how the item is situated or adopted to the real property

bill of sale

agreement in the purchase contract meets requirement. Buyers sometimes believe fridges, washers and other appliances are fixtures but they're personal property

personal property

belongs to seller and goes with them

Agreement of parties

have the parties agree (in writing) whether the item will stay

Trade Fixture

is removable personal property that a tenant attaches to leased property in order to conduct business

Adaptability of use

is the item being used as personal property- has it been adapted or customized

Fixture

part of property being conveyed in a real estate transaction and should stay

Intention of Placing

was it intended to be temporary or permanent?

Method of Annexation (or Attachment)

whether the item is attached to the property or not. As well as how permanent it is