Full question:
I am moving out of leased property. I am a custom machine maufacturer and use cranes in my business and believe them to be trade fixtures. The cranes were purchased and booked as equipment, used as collateral for a loan as personal property. The landlord says the cranes are building and cannot be removed. I can move cranes as easy as presses and brakes (huge equipment). Who owns the cranes?
- Category: Landlord Tenant
- Date:
- State: Kentucky
Answer:
The relationship of landlord and tenant is created by contract, and the terms of the contract (lease) generally determine the rights of the landlord and tenant. You should carefully review the terms of the lease agreement including any definitions of alterations, improvements and trade fixtures to determine your rights and your landlord's obligations regarding your business.
Generally, improvements made by a tenant that are permanently attached to the property become part of the real estate. A trade fixture is an improvement that is attached to real estate that is unique to the operation of a business. It may be removable by a tenant if it can be done without damaging the property. A trade fixture is installed by a tenant under the terms of a lease and is used in the business of the tenant. Trade fixtures are removable by the tenant before the lease expires, however, the tenant is liable for any damages caused by such removal. They are distinguished from other fixtures which are considered improvements to real property and which must be left intact when the tenant vacates the premises. In the U.S., a sale of land generally includes any permanent fixtures, unless an item is expressly excluded. Trade fixtures are an exception to this general rule. Common factors examined in determining the nature of the fixture include the degree of the item’s annexation or permanence to the property—whether it can be removed without material injury to the land or building to which it was attached; the extent to which the item was adapted for the intended use of the property, that is, its appropriateness for the poses for which the property was used; and the intention of the person who annexed it.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
