Shedding light on your fixtures and fittings.
Is the landlord or the tenant the owner of fixtures and fittings? When you are selling, what fixtures and fittings are automatically included unless you say otherwise? And what exactly are they anyway? It's a perplexing question. It is also an important question. Whether you are buying or selling, you need to know what you can take away and what you have to leave behind. With the rates of stamp duty land tax being what they are, the legitimate apportionment of the sale price between the bricks and mortar and fixtures and fittings can also help reduce the amount of tax paid.
It doesn't help that the two words get confused or are pushed together as though they were one and the same thing. 'Fittings' is not a legal concept. In law, fixtures are distinguished from 'chattels' or moveable things and form part of the land and premises, whereas chattels are always separate - even if they are fixed chattels.
The traditional view is that an object is a fixture if it has a substantial connection to the building (e.g. a fire place) and brings about a permanent improvement to the land, rather than be used for the owner's enjoyment.
Many tenants have wondered to whom trade fixtures and fittings at a public house belong. It has particular significance in the sales and purchases of pubs, loans that are secured on pubs by way of mortgage and leases and tenancies.
When selling a pub you must take care to exclude certain categories of items. Unless otherwise agreed, brewers and pub companies should always exclude dispensing equipment, cellar-cooling equipment and signage.
A tenant has always been able to remove tenant's fixtures - which were there to help him during his time at the property. Fixtures, however, pass to a secured lender on completion of a mortgage and a borrower has no right to remove tenant's fixtures.
If a tenant has not obtained permission to install such items, there's a real danger that the landlord is then entitled to treat them as his fixtures and fittings.
They could also be included in any future rent review - so the landlord could decide that the works have enhanced the building and the tenant could then pay a higher rent as a result.
A benevolent exception casts a kindly legal eye on certain fixtures, such as trade fixtures, ornamental and domestic fixtures and agricultural fixtures. This allows a tenant, at the end of a lease, to detach and take away fixtures that he or she had installed.
Before you make a move, make sure you're aware of what are your fixtures or you may end up with less than you think you own.
Richard Freeman-Wallace is head of property at Watson Burton LLP.
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|Publication:||The Journal (Newcastle, England)|
|Date:||Dec 2, 2009|
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