What is chattel?
Chattel refers to movable personal property that is not permanently attached to land or real estate. In the real estate context, chattel includes items like furniture, appliances, and equipment that can be removed without causing damage to the property itself.
Unlike fixtures, which become part of the real property once installed, chattel remains separate and can be taken by the owner when they sell or leave the property.
How does chattel work in real estate?
Chattel works by establishing a legal distinction between what stays with a property and what the seller can take. When a property changes hands, this distinction becomes crucial for determining ownership of various items.
The classification depends on whether an item is permanently affixed to the property. For example, a refrigerator that simply plugs into an outlet is typically chattel, while built-in cabinets are considered fixtures. The method of attachment, the intention of the party who attached it, and the relationship of the item to the property all factor into this determination.
In transactions, buyers and sellers must explicitly agree on which chattel items are included in the sale. Without clear documentation, disputes can arise over what stays and what goes.
Real-world application of chattel in real estate
In residential sales, chattel commonly includes appliances like washers, dryers, and window air conditioning units. Buyers often negotiate to have certain chattel items included in the purchase price, while sellers may choose to remove items they wish to keep.
For commercial properties, chattel can encompass office furniture, computer equipment, and inventory. These items are frequently listed separately from the real property in purchase agreements.
In rental situations, landlords may provide chattel such as furniture in furnished apartments. This property remains owned by the landlord and must be returned in good condition when the tenant moves out.
How chattel is used in transactions
Chattel is typically documented through bills of sale or specific clauses in purchase agreements. Real estate contracts often include an addendum that lists which personal property items are included in or excluded from the sale.
Appraisers and lenders treat chattel differently from real property. Most mortgage loans cover only the real estate and fixtures, not chattel. When chattel has significant value, it may require separate financing or adjustment to the purchase price allocation.
During property inspections, buyers should verify that all agreed-upon chattel is present and in working condition. This prevents surprises at closing when sellers may have removed items buyers expected to receive.
In other words
Chattel is simply the stuff you can take with you when you move. If you can unplug it, pick it up, or remove it without tools or without damaging the property, it's likely chattel.
Think of it as the opposite of anything permanently attached to your home. Your couch, dining table, and portable heater are chattel. Your kitchen sink, ceiling fan, and built-in bookshelf are not.
