Fixtures, chattels and commercial leases may form part of a deceased estate, if the departed owned and rented out business premises, or was a commercial tenant. In either instance, a commercial lease should govern rental conditions applying to the office, retail space, or warehouse in question.
Things Executors Should Know From the Outset
Fixtures, chattels and commercial leases are generally subject to common law, unless the rental agreement defines otherwise. In other words, on most occasions:
- Items permanently attached to the premises, like built-in fittings for example, are fixtures and hence part of the landlord’s property.
- Movable chattels that can be removed without damaging the premises belong to the owner or tenant, depending on whose they are.
Understanding this distinction is essential in terms of building maintenance, and insuring the assets of the estate.
Chattels and Fixtures in Commercial Rentals
An executor may find themselves negotiating a short-term rental agreement, governing commercial space in a deceased estate. Although they could also find that the deceased was a commercial tenant. Either way, executors should document the estate’s rights and responsibilities in terms of fittings and loose gear.
Minimum Requirements for a Commercial Lease
A commercial lease is a legal contract binding on the landlord and tenant, provided both sign it. It should define all the terms and clauses governing their relationship, insofar as the property is concerned. As a minimum, the lease should cover the following according to Legal Vision:
- The chattels and fixtures included in the lease.
- The rental amount and the duration of the lease.
- Responsibilities for repair and maintenance.
- Health and safety responsibilities of the parties.
- How either party may terminate the lease.
Fixtures Chattels and Commercial Leases
A fixture, such as central heating or fitted carpets, is attached to the property, and therefore ‘permanent’. Whereas chattels, such as free-standing furniture and appliances, are independent of the leased property.
However, would it be that simple when it comes to fixtures chattels and commercial leases? Many fixtures are relatively easy to remove, and potentially become chattels after that. This is why a commercial lease agreement should ideally list all the items intended to be fixtures by the parties.
Ownership Can Be a Deciding Factor
An owner of commercial property is responsible for managing it, attending to maintenance, and accepting the risk. However, this should not include the possessions that a tenant brings to the property. The following distinctions are important in this regard:
- Portable, movable items (chattels) remain the tenant’s responsibility, and they must remove them at the end of the lease.
- Anything a tenant attaches to the property becomes a fixture, and therefore, technically, the landlord’s property.
A tenant may avoid this transfer of ownership by removing the ‘fixture’ during the period of the lease, provided they make good and there is no substantial damage. But if a tenant abandons a fixture that they installed themselves, then the landlord may charge them to remove it.
Wrapping Up Commercial Leases and Ownership
Commercial properties contain chattels and fixtures, although this distinction can cause confusion. Fixtures are items intended to be permanently attached, whereas chattels are loose items, or objects that are easily removed.
It is important to clear up any confusion about this distinction, in the mind of the landlord, tenant or both. The lease should therefore mention this difference, and encourage the parties to discuss things if they are unsure.
Crunch Time Comes at End of Lease
Crunch time often comes at the end of a commercial rental agreement, especially if the tenant departure is involuntary. This could certainly be the case if the executor of a deceased estate gave a long-term tenant notice.
Tenant loyalty may become a thing of the past, after they have to move to a new location a distance away. The poor executor then has the unenviable task of clearing up the mess that they left behind.
Avery Associates provides a commercial property clearing and cleaning and sanitizing service to landlords, tenants, and property owners in the Greater London area. Please give us a call if we might be able to assist, and we’ll be delighted to help.
More Information
Responsibility for Property in a Deceased Estate
Changing Property Probate Value After Tax
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