Tenant Insolvency: Chattel or Fixture

Whether a particular item is a chattel or fixture is often the subject of disputes between landlords and Trustees. A Trustee or Receiver will consider an item to be a chattel and include it in the list of items to be sold. The landlord, who believes it is a fixture, will challenge its removal. Whether an item is a chattel or fixture is a question of fact, and is usually easy to determine, when examined objectively. However, disagreements do arise. To assist in resolving the disagreements, several factors must be considered.

The degree of annexation and whether an item is attached for the betterment of the chattel or improvement of the building are primary factors when considering the issue. Other factors the Courts have considered include:

• Any item which is unattached to the property, except by its own weight, and can be removed without damage is a chattel;
• Any item that is plugged in and can be removed without damage is a chattel;
• Any item that is a fixture, but is a tenant fixture, can be removed if the property is left in the same condition it was when the tenant received it;
• If an item is attached to the property; however, part of the item can be removed from the property, and it still retains its essential character it is considered to be a fixture.