What is the difference between a chattel and a fixture?

A recent case considered whether or not a wooden chalet that a tenant constructed on a piece of land let to them by the landlord, belonged to the tenant once built or the landlord. The court decided that the chalet was so attached to the property as to be a permanent part of it and so now belonged to the landlord. In this case it was actually a blessing for the Tenant that the courts decided in this way as it gave them certain protected tenancy rights.

However it raises the general query about what is a tenant’s chattel and what is a fixture, and this is relevant to any commercial tenants affixing equipment or building onto property demised to it. Whether or not it is simply a chattel or becomes a fixture (that then belongs to a Landlord) is governed by a combination of factors including 1) the extent that the item has been affixed to the land; and 2) why it has been annexed. If you affix it so as to enhance the value of the land and it creates a degree of permanence then it will be a fixture, particularly if it cannot be removed without destroying the item. If its purpose is temporary annexation and just to allow use of the item rather than enhancing the property then it is likely to be a chattel still. For instance are you just bolting it to the property to keep it secure or does it need a more permanent form of attachment that would make it difficult to remove? It is important to note that it is not governed by the subjective intention of the parties, but should be considered objectively.

Tenants should therefore consider this when undertaking work or bringing equipment on to a landlord’s property as whether or not it is a chattel or fixture will not only effect ownership, but also would affect the obligations to repair and maintain the fixture and the ability to remove it at the end of the term.