Fixtures

Fixtures are personal property which has become “part of” real property in some way, and so is considered to be real property, not personal property. In commercial real estate forms and those used by law firms, it is not uncommon to see property purchase agreements which have a line like this:

This Purchase and Sale Agreement covers all fixtures and articles of personal property situated on or attached to the property and owned by Seller, including, but not limited to…

Of course, in most purchase agreements which are not specifically tailored to a transaction, there is no information about what constitutes a “fixture,” and in close cases, such a definition may be difficult to apply with a given item of property.

There is a great deal of case law dealing with at-tempt to distinguish whether an item is personal property or former personal property that has be-come “real” by becoming a fixture. There is a test set forth in Indiana which helps to determine whether a given thing is a fixture, namely:

This test considers: 1) actual or constructive annexation of the article to the realty, 2) adaptation to the use or purpose of that part of the realty with which it is connected, and 3) the intention of the party making the annexation to make the article a permanent accession to the freehold." The third part of the test—the intent—is controlling. Intention may be determined by the nature of the article, relation and situation of the parties making the annexation, and the structure, use, and mode of annexation. If there is doubt as to intent, the property should be regarded as personal.[1]

While this seems obscure, because it is so lengthy, the real question is: IS the item of personal property in question SO attached to the real estate that it is essentially inseparable?

[1] 11438 Highway 50, LLC v. Luttrell, 81 N.E.3d 261, 265 (Ind. Ct. App. 2017)