Wednesday, 7 Oct 2015

Property news…..Court of Appeal confirms rules regarding Chattels and Fixtures

Property news…..Court of Appeal confirms rules regarding Chattels and Fixtures

The recent case of Spielplatz vs Pearsons required the court to consider whether a holiday chalet counted as a chattel (i.e. a loose moveable item) or a fixture (i.e. integral to the land and forming part of it). Who constructed the chalet was not of importance here as if something has become part of the land it then forms part of the property that is let under the lease.

The claimant owned a naturist resort. The resort was divided into plots and leases of the bare plots were granted to various tenants. Some left them as vacant land whereas others built structures on them. In this case the Tenant built a chalet. Initially the Tenant used the chalet as a holiday home but eventually came to live in it full time as their permanent residence.

The Landlord served notice on the Tenant under the terms of the lease to terminate. The issue of whether the chalet was a fixture was important as if it was then the Landlord should have given notice in accordance with the protections under the Housing Act 1988 notwithstanding the terms of the lease. The act would have placed a more onerous obligation on the Landlord.

The law on the distinction between fixtures and chattels is well established. The test relates to the ‘degree of annexation’ of the item to the premises. In simple terms one test that has been used is if you turned a property upside down the items that would fall out are chattels and those that wouldn’t are fixtures. In more specific terms it has been held that where an item could not be removed without demolishing it it was a consideration of high importance in determining whether an item is a fixture or not. This allows for items that have to be bolted down for safety but can then be unbolted and removed.

In this case perhaps unsurprisingly the Court of Appeal in applying the tests found (through expert evidence) that to remove the chalet would be to demolish it. Consequently it was a fixture and the Tenant had the protection of the Housing Act 1988.

It is important in light of the above which really only reaffirmed the law as it stands to be sure of what is and what is not a fixture. Otherwise this could have unwanted and unforeseen consequences when it comes to lease termination and repairing obligations and also in taxation treatment as chattels and fixtures are treated differently for the purposes of Stamp Duty Land Tax and other taxes.
For further advice or assistance on any Property  Law matters contact our Property  Law Experts James Dunn james.dunn@awbclaw.co.uk  on 01756 692 875 or Declan Hayes on declan.hayes@awbclaw.co.uk
James Dunn
Partner and Commercial Property Lawyer
Tel: 01756 692 875

 

 

 

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