One of the most common problems I am asked to deal with, is when a buyer finds on the day of completion he has actually bought rather less, or indeed more, than he anticipated. Less meaning that the eagerly anticipated garden shed or delightful light fittings have disappeared; and more meaning that not only loft and the garage is full of rubbish, but an undesirable caravan remains sitting in the drive!
Legally there is a vital distinction to be made between land and fixtures on the one hand, and fittings on the other. Unless the contract specifically states a fitting shall remain, the seller may take it.
So what is a fixture and what is a fitting or chattel? Predictably the law is somewhat complicated and contradictory requiring analysis of the extent of the annexation of the item to the land and the purpose of the annexation. For example, in 1986 a greenhouse bolted to concrete plinths was said to be a chattel and could be removed. In 1996 however, the Court of Appeal decided certain white goods in a fitted kitchen were fixtures, as they were in spaces specifically designed for them, so they should be regarded as part of the fitted kitchen.
The rule seems clear in that an object will be considered part of the land if it is sufficiently affixed to the land, and if the purpose of the annexation is that it should be treated as part of the land. But this test is notoriously difficult to apply. Often disputes only come to light on the day of completion when the buyer moves in, when he finds that items he thought he had contracted to buy have, in fact, been removed.
The answer is in fact simple: If you want to keep an item – say so. It is now standard practice for a Fixtures Fittings and Contents list to be prepared by the Seller prior to exchange of contracts which will state which items are to be removed and which will remain. The form cannot deal with the specifics of every case but it will be a good starting point and gives the seller the opportunity to specify items which are not included in the sale, or are to be offered separately for sale in addition to the sale price.
Consequently the argument as to whether an item is either a fixture or fitting does not arise. The list forms part of the contract and determines beyond doubt which items are, and which are not, included in the sale. In turn the form gives the Buyer a chance to check the list prior to purchase and that it tallies with what he believes was agreed orally between himself and the seller – and usually some weeks beforehand.
There is also another important reason for differentiation between fixtures and chattels and that is stamp duty land tax. If an object is a chattel no stamp duty is payable on that element of the sale price, provided that a realistic second hand value is apportioned to it. I imagine that the incidence of second hand carpets being worth in excess of £20,000 are rare, however I do come across buyers who try to convince me that this is the case, particularly it seems when they are close to the stamp duty limit. Such an attempt will not work and will be rejected by the Revenue.
The opposite problem on completion is when the seller has not cleared the property of rubbish. This results in expense to the buyer of hiring a skip, some considerable labour and is of course frustrating when you have just moved in. Unless the extent of the rubbish prohibits the taking of vacant possession the buyer probably has no recourse. It is therefore vital to make it a term of the contract that any particular rubbish that the buyer is concerned about will be removed by the seller at completion.
For more information on how you can avoid such issues, please contact Stuart Durrant on 01635 508080