What is a fixture and what is personal property

[HHM]

This issue pops up from time to time when discussing what an owner can and cannot remove from a house that will eventually foreclosue. Here is a recent decision.


Elements for personal property to become fixture under Kansas law:

Kansas courts have imposed a three-part test for determining if personal property has
become a fixture, and thus part of the real estate: (1) annexation to the realty (how firmly the items are attached and how easily they can be removed); (2) the intent of the parties (whether they intended the item to be permanently affixed to the real estate); and (3) how operation of the goods is related to the use of the realty (adaptability). All three requirements must be met before property will be deemed to be a fixture under Kansas law.

The burden of proving that an item remains personal property lies with the party claiming the item is, in fact, personal property.

Parties may agree that property will remain personalty despite incorporation into realty: The parties to a purchase agreement can agree to treat property, which would otherwise qualify as fixtures, as personal property, subject to certain caveats, such as that the agreement is not binding on third parties without knowledge of the agreement, and that the intent of the parties may be overridden if removal of the items in question would cause extensive damage to the realty. See In re Williams, 381 B.R. 742 (Bankr. W.D. Ark. 2008); In re Hinson, 77 B.R. 34 (Bankr. M.D. N.C. 1987); Hoffman Management Corp. v. S.L.C. of North America, Inc., 800 S.W.2d 755 (Mo. App. W.D. 1990). Thus, here, windows purchased by the debtors remained personal property, although they were installed in the debtors’ home, where the purchase agreement explicitly provided that “[y]ou agree that any property described in this charge slip will remain personal property and will not become a fixture even if attached to real property.”

Creditor’s security interest was enforceable in property that remained personalty:
Accordingly, the security interest the creditor (which financed the debtors’ purchase of the windows) held in the windows was enforceable, and the creditor’s claim was secured.

In re Dalebout, 2011 WL 1792659 (Bankr. D. Kan., May 10, 2011)

(case no. 5:10-bk-41813) (Bankruptcy Judge Janice Miller Karlin)

[tobee43]

would it vary from state to state...in ny:

In Potter v. Cromwell"(18)"

That it was the permanent and habitual annexation, and not the mannerof fastening that determined when the article annexed became a part of the
realty."

The Court quoted with approval from Winslow v. Merchants Insurance Company (19) that essential parts of a mill and adapted to and used in connection with it "'though not at the time of the conveyance or mortgage attached to the mill, are yet a part of it, and pass with it by a conveyance, mortgage or attachment (10), and continued:

"the permanency of the attachment does not depend so much upon the degree of physical force with which the thing is attached, as upon the motive and intention of the parties in attaching it. If the article is attached for temporary use, with the intention of removing it, a mortgagee cannot interfere with its
removal by the mortgagor. If it is placed there for the permanent improvement of the freehold he may."

Similar expressions are found in Voorhees v. McGinnis (21) and McRea v. Central National Bank. (22)

Annexation in these cases, it would seem, is regarded more as evidence of intent than as a requirement in itself. In Snedeker v. Warring, (23)
it was said:

"Its character may depend much upon the object of its erection. Its destination, the intent of the person making the erection, after exercising a controlling influence, and its connection with the land is looked at principally for the purpose of ascertaining that intent...

Storm doors and screens designed to fit a particular building, though used only seasonably and stored otherwise,have been held fixtures as between mortgagor and mortgagee (24).

additionally, this goes on and on depending on the what and where you look. it makes it even more confusing in some cases

then in nc we have:

What’s the difference between personal property and fixtures? Do the bathroom mirrors stay?

to sum it up:

a fixture: a fixture as anything glued, screwed, or cemented to the property. It can’t be removed without doing some kind of repair after removing it... attached audio /video equipment, an outdoor swing set...

So what’s PERSONAL PROPERTY? Personal property can be described as anything that can be packed up and taken off the property without causing damage to the property. For example curtains or draperies can be packed up and taken out of the home, HOWEVER the hardware holding them up can not (it’s screwed into the wall).