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Know the difference between chattels and fixtures

By Andrew Oh, Associate & Mark Mitchell, Senior Solicitor

First published in The Press 10 September 2011

If you’re in the red zone and have to quit your home, what can you take when you leave your property? It seems simple enough, as long as you know the difference between a chattel and a fixture.

The general rule is, you take your chattels and leave your fixtures. If you choose option one, the Crown is buying your house and land, this includes fixtures. If you choose option 2, any settlement with your insurer for your house will also most likely include fixtures. In both cases, your chattels are excluded from the settlement.

However, like everything, there are grey areas.

So how do you know what is a chattel and what is a fixture?

Chattels are generally things that are not fixed to the house or land, including the likes of curtains, rugs, carpets not fixed to the floor, plug-in stoves, lightshades and household furniture and other personal property as well as pot plants and garden ornaments.  Fixtures are permanently attached or fixed to the property, and which may damage the property if removed. They include things such as kitchen cupboards, hard-wired stoves, floorboards, tiles or fixed carpets, heat pumps, bathroom fittings and light fittings.

The distinction between the two will usually be determined by looking at how and why the item was fixed to the property. As there is no set formula, there is always scope for disagreement. The best thing you can do to avoid problems is to record in any settlement agreement what you are expecting to take with you. It is always best to enter into any legally binding agreement knowing what you are going to get when it settles rather than be faced with unexpected but avoidable problems.

So what if you have handmade your kitchen cabinets and bench and would like to take them with you when you move?  Clearly they are a fixture and under any standard agreement will form part of the sale. But, all is not lost because you may still be able to take a fixture with you if you have the consent of the Crown or your insurer (depending on the option you choose). Because the Crown or your insurer is buying the fixtures, the price you are paid for your property includes the price for those fixtures. This means that if there is some value in the fixtures you want to take, the Crown or your insurer may want to be paid for the loss of those fixtures, and if so, this will affect your eventual pay-out.

It follows that as tempting as it may be, you must not do a wholesale stripping of all the valuable fixtures from the house so that you can sell them separately.  Although you may see value in selling the soon to be redundant hot water cylinder to a scrap metal dealer, it is not yours to sell.

If there are fixtures you wish to take, you should talk with the Crown or your insurer (depending on the option you choose) and reach agreement on this, including the value to be deducted from any pay-out. 

In summary, if you want it, put it in the settlement agreement. This will avoid unexpected delays and deductions on settlement. If you are unsure what you can take then talk to your lawyer.

Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.