(Ontario Real Estate Source)
By Brian Madigan LL.B.
The series about chattels and fixtures will continue. The distinction between the two is important.
Fixtures are part of the land, they are real property.
Chattels are personal property and have nothing to do with the land.
Real estate agents often think that they are the only ones who ever deal with chattels and fixtures. They think that everything comes down to the agreement of purchase and sale, and whether they think something ought to have been included as part of the deal.
Actually, nothing could be further from the truth!
The law of real property deals with the distinction between chattels and fixtures. The law of contracts deals with personal property. In the Middle Ages, they were two separate bodies of law, each with their own courts and Judges.
Superior Judges dealt with important matters like land disputes. Such a senior Judge would have the authority and the power to make a court order which vested the ownership of land in the name of one of the parties. This was “real” power.
In the lower courts, the junior judges with lesser appointments would deal with contract matters and personal disputes. Money was a sufficient remedy. The item inappropriately obtained did not need to be returned. Money was enough.
So, during the 14th and the 15th centuries lawyers and Judges certainly knew the difference between chattels and fixtures. Your livelihood depended upon it, otherwise the litigating parties might find themselves in the wrong court and that meant that the had to start all over again in the right court, assuming that by then they were not out of time.
Today real estate lawyers do come across issue relating to chattels and fixtures but the problem is that the amount in dispute is usually very small. A used dishwasher might be worth only a few hundred dollars. A brand new central air conditioning unit may be $1,200. What this means simply is that no one can afford to go to court with these issues. They are small and no matter how they reach resolution, any compromise is better than a lawsuit. Then, at best, the matter might proceed to Small Claims court which today has a monetary jurisdiction to rule on cases up to $25,000. No matter what the decision, it is not a precedent and it is not binding on any other courts.
The lawyers who do deal with these issues all the time practice within the field of bankruptcy and insolvency. This is where the new law is made in this field.
There are basic principles that have been developed by the common law. There are also exceptions to the general rules.
So, first we’ll have a look at the basic principles and later we’ll look through the exceptions.
Once you understand the principles and the exceptions you will have a better understanding about how to approach the decisions relating to the chattel-fixture determination.
Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com
