When it comes to real estate, there are various types of fixtures that we can encounter. One of these is trade fixtures, which is a type of personal property that is attached or installed in a commercial property by a tenant to conduct their business.
Definition of Trade Fixtures
Trade fixtures refer to the equipment, machinery, or other personal property that is attached or installed in a commercial property by a tenant to conduct their business. These fixtures can be removed by the tenant before the lease expires.
Difference between Trade Fixtures and Real Property Fixtures
The main difference between trade fixtures and real property fixtures is that trade fixtures are considered personal property, while real property fixtures are considered part of the real estate property. Real property fixtures, such as built-in cabinets or lighting fixtures, are not removable by the tenant and become part of the property once they are installed.
Examples of Trade Fixtures
Some examples of trade fixtures include restaurant equipment, display cases, and shelving units. These fixtures are typically installed by the tenant to conduct their business and can be removed by the tenant before the lease expires.
Importance of Trade Fixtures in Real Estate
Trade fixtures play an important role in commercial real estate transactions. These fixtures can add significant value to a commercial property, and tenants often invest a considerable amount of money in these fixtures. As a result, trade fixtures are often a point of negotiation during lease negotiations and can impact the overall value of a commercial property.
Legal Considerations for Trade Fixtures
From a legal standpoint, trade fixtures are considered personal property and are not subject to the same rules as real property fixtures. However, it is important for tenants to obtain permission from the landlord before installing trade fixtures to ensure that they are not in violation of any lease agreements. Additionally, tenants should document any trade fixtures that they install to avoid any disputes with the landlord when it comes time to remove the fixtures.
Trade fixtures are an important aspect of commercial real estate transactions. These fixtures can add significant value to a commercial property and are often a point of negotiation during lease negotiations. While trade fixtures are considered personal property, it is important for tenants to obtain permission from the landlord before installing these fixtures and to document any installations to avoid any disputes down the road.