Trade fixtures

Trade fixtures, often called "chattel" fixtures, normally come into play with leased property, especially commercial leases. Trade fixtures are any objects that a tenant attaches to the real property (land or building) for use in the tenant's business. However, even though they are attached, often with some permanence, trade fixtures remain the personal property of the tenant.

For example, business signage, display counters, store shelves, liquor bars and machining equipment are often well, if not almost permanently, attached to the building or land. However, they are personal property and can be removed by the tenant, since they are part of the tenant's business.

There is also an economic logic behind this exception for trade fixtures. If tenants could not remove them, then landlords would bear the responsibility of outfitting their tenants with such equipment and materials.

The landlord does have some protection. Any damage to the real property cause by the tenant's removal of trade fixtures must be repaired or paid for by the tenant.

If a trade fixture is not removed when the tenant moves out, those trade fixtures become the landlord's property through the process of "accession." For example, if a restaurant goes bankrupt and the owner foregoes his right and the expense of removing all the kitchen equipment, dining booths and other trade fixtures, those trade fixtures become the landlord's property. In this manner, they will no longer be trade fixtures and can actually become regular fixtures, hence real property.

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