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Fixtures and Real Property

Fixtures and Real Property

•    Fixtures – A fixture is personal property that is converted into real property by physical annexation to (attachment to or close association with) the land or its buildings.

⁃    Example: A piece of equipment that is physically installed into the floor of a factory building would become a fixture and is one with the property. It is no longer personal property and cannot be removed from the real property without the consent of the real property’s owner.

⁃    Discussion: Should personal property that is permanently attached to real property become part of the real property? Would this have any effect on businesses that sell or rent personal property?

⁃    Practice Question: Megan owns a warehousing business. She purchased a $1 million storage facility and financed it with a bank mortgage. She purchased heavy steel shelves to stack heavy pallets of goods and installed them in the factory. The shelves cost approximately $200,000 and are financed by the seller. The steel shelves are anchored to the floor of the building with a heavy steel bolts that are driven into the concrete floor. Has the steel shelving become a fixture of the warehouse building?

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