Make a checklist of chattels before you close the sale
November 20, 2009
Mark Weisleder
SPECIAL TO THE STAR
Since my last article about chattels and fixtures, buyers have sent me emails about plasma televisions, thermostats and hot tubs removed prior to closing.
In all cases, there was no specific mention of these items in the agreement of purchase and sale.
As such, in order to determine whether the seller can remove the items, we need to know whether they are chattels or fixtures.
While the thermostat is clearly a fixture, there may be issues regarding the plasma television or the hot tub, depending on how they are attached to the property. An above-ground hot tub that only rests on the outside deck may, in fact, be considered a chattel that can be removed by the seller before closing.
The plasma television looks like a chattel if it is just affixed to a wall mount, but if it is part of permanent built-in shelving and is attached via a complicated electronic hookup inside the walls, it could well be considered a fixture and thus must remain on the property after closing.
In one case, a former law partner of mine bought a home, only to discover after closing that the seller had removed all of the toilets. Apparently, there had been a slight miscommunication. The seller heard that the buyer planned to tear down the home to build a new home, so figured the buyer would not need the toilets. It turned out that the buyer intended to live there for one year before tearing it down.
I thanked my partner for the story after falling down laughing. I now had something to say to every unhappy buyer after closing when they called me to complain about a missing fixture: "Be happy you have your toilets."
In a case heard in 2008 in Ontario, a buyer bought a cottage and checked the dishwasher one month after closing, only to find that it was broken. The judge felt this was too late to complain. Buyers, remember to check the condition of all chattels as soon as possible after you take possession because the seller typically will only warrant their condition until the closing date.
What about rental contracts? Some contracts are not transferable. So buyers, do your homework: ask about the hot water tank, the furnace, satellite receivers, air conditioning units, and the alarm system. Buyers may prefer to install their own alarm system. The seller may have to incur a penalty for cancelling the contract before it expires. Sellers, look at all contracts carefully; ask any rental suppliers if their contracts can be assumed and what costs may be involved. Then disclose everything to the buyer.
In a court decision in Ontario in 2003, a seller was caught switching appliances before closing. The buyer had video evidence, taken during the home inspection, that clearly showed the appliances – but not the appliances in the house on closing.
The sauna wasn't working; some other systems were also not working. The court ordered the seller to pay for replacing the appliances and to repair the sauna and the disabled systems. The seller also had to pay "punitive damages"– an extra $10,000 – for attempting to deceive the buyers. This case serves as a lesson to sellers this type of behaviour will not be tolerated.
The lesson for buyers is to keep a detailed list or photographs of any chattels or fixtures you expect to receive on closing, and conduct a pre-closing visit to make sure everything you expect to receive is still on the property.
Sellers, remember to leave the home you are selling just the way you want to receive the home that you are buying.
Mark Weisleder is a lawyer, author, course developer and public speaker for the real estate industry who is an occasional contributor to Real Estate News. Visit him at markweisleder.com.
Toronto Star