Recent dramatic price reductions in the cost of plasma, LCD and LED televisions have resulted in flat panel TVs becoming some of the most popular electronic devices. Today you would be hard pressed to find a household without one or more flat panel televisions and at least one of these will likely be mounted in an elevated position on a wall by means of a mounting bracket.
The question that arises is how should flat panel televisions be dealt with in a real estate transaction?
For reasons that will be discussed in greater detail in this article, if you have your hearts set on removing a mounted television when you move out, then you’d better be listing this item as a “fixture” not remaining with the property. On the other hand, if you want that wall mounted television and bracket, then, as the buyer, in the offer to purchase you should be specifying these items as a “chattel” to remain with the property on closing. Anything else, and in particular remaining silent about this item in the contract, is likely to give rise to disappointment and hurt feelings on possession day.
Relevant provisions in the standard form contract
A number of years ago AREA’s standard form contracts introduced the plain language terms “attached” and “unattached” goods to replace “fixture” and “chattel”. The key provision in the Residential Real Estate Purchase Contract that deals with this issue is paragraph 1.1 which states that:
“The Property is the Land, Buildings, Attached Goods (unless excluded) and included Unattached Goods located at (municipal address):.................”
If clauses 1.3 and 1.4 are left blank, then the contract includes everything that is attached to the property and excludes (the seller is entitled to remove) everything that is detached from the property. Clauses 1.3 and 1.4 are provided to enable the parties to deviate from the default provision. Most commonly one will find standard kitchen appliances listed in clause 1.3 (unattached goods to be included) as “stove, fridge and dishwasher”. This is problematic because failing to be specific in terms of the make, model and colour of the appliances can lead to substitutions of appliances by sellers prior to possession day. Such substitutions are difficult to prove and therefore remedy. Clause 1.4 (attached goods to be excluded) is used less frequently, but might indicate “the heirloom dining room chandelier” as being an attached good that the seller intends to remove from the property on closing.
Clearly the key to completing these clauses correctly is an understanding of what constitutes “attached” and “unattached” goods.
The Common Law
All available court precedents that have addressed this issue have done it in the context of “fixtures” and “chattels” rather than the new terminology. I expect, however, that the same analysis would apply. The clearest rules that I could find were set out in a British Columbia decision (Royal Bank of Canada v. Maple Ridge Farmers Market Ltd. S.C.B.C. 1995, No. A950858) as follows:
1. Any item which is unattached to the property, except by its own weight, and can be removed without damage to ... (the premises) that will need repair, is a chattel.
2. Any item which is plugged in and can be removed without any damage or alteration is a chattel.
3. Any item which is attached even minimally (i.e., it cannot simply be unplugged) is a fixture. For example, if an item requires the removal of screws, nails, bolts, detachment of plumbing, or the cutting and capping of hardwire, it will be a fixture.
4. If a piece of equipment is attached to a structure, a part of which could be removed but which would be useless without the attached part, then the entire piece of equipment is a fixture.
The foregoing makes it clear that any appliance which is simply plugged into an electrical outlet but otherwise stands on its own is a chattel (unattached good) but the moment that the appliance is screwed or glued or otherwise attached to a cabinet or wall it becomes a fixture (attached good). It also makes it clear that if a part of an appliance can be removed (such as attachments to a vacuflow or remote controls for a garage door opener) but would be useless without both parts, then all of the parts are considered to be a fixture.
Where does the foregoing leave us with respect to common appliances and the flat panel TV?
Stove: could be an attached or unattached good depending on whether it is free standing and only plugged into an electrical outlet, or built in or wired directly into the electrical system.
Cook top: will usually be wired directly into the electrical system or gas line, and as a result is an attached good.
Refrigerator: can be either free standing or built in or, potentially, directly tied into a water line if it has a water cooling or ice making feature and, as a result, could be either a chattel or a fixture.
Dishwasher: needs to be connected to the water supply and may be wired directly to the electrical lines (rather than plugged in) and, in addition, will likely have some screws attaching it to the cabinets, and, as a result, will be an attached good.
Microwave oven: can either be a free standing chattel (if it is simply standing on a ledge) or a built-in fixture (if it has venting grills attached to both the appliance and the cabinets).
Garbage compactor: unless there are some screws to hold it in place, will usually be a free-standing appliance.
Washer and Dryer: may be either attached or unattached goods depending on the nature of the connection of the water lines to the washer and the exhaust vent from the dryer.
Garage door opener: is always a fixture as the motor is bolted to the ceiling of the garage and connected to the garage door. The remote controls are an integral part of the whole as they are useless without the motor.
Ceiling fan: is always an attached good as it will be screwed to the ceiling or the electrical box.
Vacuflow system: is always a fixture due to the motor being attached to the wall and the system pipes, and the attachments are an integral part of the whole.
Wall-Mounted Panel Television: First of all, there is no question that the mounting bracket is an attached good as it will be screwed directly into the wall. However, the television itself is more problematic. Unlike the power head of a vacuflow system, the television could be removed from the bracket and still function and be useful on its own. However, rarely will a wall-mounted television simply hang on a bracket by its own weight. Usually there will be some degree of attachment to the bracket by screws, bolts or safety pins. This would make it appear to be more of an attached rather than an unattached good.
In order to avoid misunderstandings and problems on possession day, where doubt exists about any goods being attached or unattached, it is best to list such goods in either 1.3 or 1.4 depending on what the intention of the parties may be. Frankly, even where there is no doubt at all about an item being a “fixture”, there is no harm in a buyer including it under clause 1.3 in order to avoid a misunderstanding on closing.
courtesy of Lubos K. Pesta