In essence a fixture is something fixed to the land and therefore, in law, is regarded as forming part of the land. It loses its chattel status on fixing, or “annexation” in the jargon, and becomes real property. Thus, for example, a building forms part of the land and so does anything fixed to that building. This is obviously of significance when land is being sold because, unless excluded in the contract, fixtures will pass to the purchaser. But it is also important in leases, mortgages and, indeed, in any disposition of an interest in land, as we shall see.
How do we know whether an object is a fixture or a chattel?
The law has evolved two tests to determine whether something is a fixture: the degree of annexation — how the object is fixed; and the purpose of annexation — why it was fixed.
(1) The test of degree of annexation
Because the basic rule is that whatever is fixed to the land becomes part of it, this test is satisfied by establishing a physical connection between the object and the land.
If, on the other hand, the object merely rests on the land then (subject to the purpose test, below) it remains a chattel. So, for example, a free-standing greenhouse or a mobile home is a chattel; whereas a fitted carpet, a fireplace, panelling, and things fixed by screws or nails etc, such as a bathroom cabinet, are fixtures.
(2) The test of purpose of annexation
The test of degree of annexation is rather a harsh and somewhat artificial test on its own and so is supplemented by a second test, the purpose of annexation. Indeed, recent cases indicate that this test is the more important of the two. Thus an object fixed to the land may be a chattel and, conversely, something not fixed may be a fixture — depending on the purpose test.
If this all seems somewhat confusing then that confusion may be resolved by bearing in mind the question the court will ask: was the object annexed to effect an improvement in the land or to enable the owner to enjoy it as a chattel? In the case of Leigh v Taylor(1) it was held that tapestries tacked on to wood nailed on to walls were chattels. The nature of the fixing was no more than necessary to display the tapestries. They were therefore merely ornaments not forming part of the land.
On the other hand, heavy statues and other garden objects have been held to be fixtures (although they rest on the land merely by their own weight) because they form part of a permanent architectural design. (This would obviously not include garden gnomes, although their owners may adhere to the strange belief that they improve the garden somehow.)
The effect of the combination of the two tests seems to be that a presumption is raised that an object is a fixture if it is fixed (or a chattel if it is not) unless there is evidence as to the purpose of annexation.
The onus of proof is therefore on the person who wishes to rebut this presumption, and in the absence of evidence he will fail.
Effect of the fixtures rule
The rule that a fixture forms part of the land has some consequences which the layman might find rather odd.
For example, a stolen chattel becomes part of the land and therefore the property of the landowner when it is fixed to his land. So, to use Megarry and Wade’s(2) example, if A steals bricks to build B’s house the owner of the bricks loses title to the bricks to B. He may, of course, sue the thief in the tort of conversion, but he cannot recover the bricks.
Likewise, if a machine is hired from the owner and fixed to the land of the hirer, the owner loses his title to it. He may even find that the land is subject to a mortgage and that therefore the machine is now subject to that mortgage — it has become part of the mortgagee’s security. Normally the owner will include a term in the contract of hire entitling him to enter the land and recover the article should the hirer default on his payments. This right of entry is an equitable interest in land, but the protection it gives the owner seems to be rather limited as regards third parties, such as purchasers or mortgagees. It would appear that in unregistered land it will bind a subsequent third party who has notice of it, but in registered land it seems to be neither registrable nor an overriding interest and therefore unenforceable against anyone except the hire(3).
In the case of tenancies, the effect of the rule is to provide the landlord (the owner of the freehold) with a free gift when the tenant fixes his own chattel to the land. This is so unfair that certain exceptions to the rule have been made. These exceptions are known as tenant’s fixtures, for they may be removed by the tenant by the end of the term or, except where the lease was forfeited or surrendered, within a reasonable time thereafter. (As with the removal of any fixtures, of course, any damage should be made good, otherwise the tenant is liable for waste.) However, where on expiry or surrender a new term was granted to the tenant immediately following the old, his right to remove tenant’s fixtures is preserved(4) in the new lease. But it should be borne in mind that the right to remove tenant’s fixtures in the first lease may simply have been excluded by an express term. Of course, one would expect such a term to have a depressing effect on the rent in most cases.
On the matter of rent, whether something is a tenant’s fixture or not will affect the rental valuation on lease renewal or rent review. Something which is a chattel or a tenant’s fixture must be disregarded in the valuation of the premises since it can be removed by the tenant and is therefore not available for use by any hypothetical tenant in the market for the premises. Landlord’s fixtures, on the other hand, may enhance the rental value of the property.
Another interesting point is that tenant’s fixtures cannot be the subject of distress because they are not chattels — they form part of the land. This seems rather odd when one considers that in theory the fixtures belong to the landlord until severed by the tenant (when they could be distrained upon!) Theory and practice diverge so widely here that it might be more realistic to admit that tenant’s fixtures never do belong to the landlord until the tenant loses the right to sever them.
What are tenant’s fixtures?
Tenant’s fixtures fall into three categories:
(1) Trade fixtures
These are things attached for the purpose of the tenant’s trade or business and include such things as pub fittings, petrol pumps, machinery, boilers etc.
(2) Ornamental and domestic fixtures
So long as no substantial injury would be caused to the building by their removal, ornamental and domestic fixtures such as mirrors, panelling, fireplaces, stoves, blinds etc will be treated as tenant’s fixtures.
(3) Agricultural fixtures
Under section 10 of the Agricultural Holdings Act 1986 an agricultural tenant may remove engines, machinery, fencing or any other fixture and any building, so long as the object was erected or fixed by him.
Sales and exclusion of fixtures
It is very important for there to be no misunderstanding between vendor and purchaser as to what “fixtures and fittings” are included or excluded on sale. (Fittings appears to mean objects which are not fixtures, ie chattels, and I will use the word in that sense.) Unfortunately, misunderstandings frequently arise and sometimes end in litigation.
In Hamp v Bygrave(5) there was a dispute over certain garden ornaments which were not mentioned in the contract of sale. The vendor removed them, much to the annoyance of the purchaser, who thought they were included in the sale. The vendor believed they had been excluded by oral agreement. The judge found as a fact that they had not been excluded. He also held that they were fixtures and should therefore be returned or, where irrecoverable, damages paid.
Ideally, the matter of fixtures and fittings should be resolved by the answers to the purchaser’s inquiries before contract. These answers are provided by the vendor’s solicitor after consulting his client. But there is scope for misunderstanding and error and in some cases this may be attributable to the ambiguity of some of the standard forms of inquiries before contract(6).
For example, a purchaser who does not know the difference between a fitting and a fixture may believe, quite reasonably, that he is entitled to garden fittings because the vendor has indicated that he is leaving all garden fixtures. So he is aggrieved when he moves in to find the greenhouse gone. (The best way to avoid this sort of problem is for the solicitors to get both vendor and purchaser to draw up a list of what each thinks are included and excluded, then compare the lists and sort out any discrepancies. Some standard form lists are now in common use.)
In cases such as these the agent’s particulars of sale can be of help even if they are not expressly referred to in the contract of sale. This is because the courts may invoke the doctrine of estoppel to give effect to the purchaser’s expectations based on the agent’s particulars. The judge in Hamp v Bygrave did indeed invoke the doctrine, although it was academic because he had already held that the garden ornaments mentioned in the sale particulars were fixtures.
It should be noted in this context that as fixtures are land, any contract to transfer them is subject to section 40 of the Law of Property Act and requires written evidence or part performance to be enforceable.
However, tenant’s fixtures are not subject to section 40 because an agreement to transfer them is regarded simply as an assignment of the right to remove them.
Conclusion
This article demonstrates how important it is for the agent to understand what a fixture is because if he is selling, valuing or managing land that land will include all fixtures, unless they fall within the exception of tenant’s fixtures. It follows that an agent who does not understand the law of fixtures cannot do his job properly nor give his client proper advice. It is hoped that this article goes some way towards enlightening those who remember that fixtures were something to do with dusty old cases concerning Greek statues and valuable tapestries but do not know what on earth they had to do with surveying.
References
(1) (1902) AC 157
(2) The Law of Real Property, Stevens
(3) Poster v Slough Estates Ltd (1968) 1 WLR 1515.
(4) New Zealand Government Property Corporation v HM&S Ltd (1982) QB 1145
(5) (1983) 266 EG 720
(6) See Professor J E Adams (1986) 136 New Law Journal 652
