Picture the happy home buyers leaving the closing office, documents signed, cosigned, initialed and stamped, and a fat check handed over. Now with keys in hand, they open the door to their new home. • But what do they find? No kitchen appliances. No washer or dryer. The charming chandelier in the dining room has been replaced by a cheap standard model. The built-in shelves and wet bar are gone. And the beautiful roses that once welcomed visitors in the front yard? Holes. • How could this happen?
Checking that list, and checking it twice
Sellers should familiarize themselves with the customs of what conveys, or transfers, with a sale. Review the listing agreement and sales contracts for any nonconformity with those customs. Note listing-agreement inclusions and exclusions addenda and confirm that they accurately list all the items the sellers intend to sell (the inclusions) and those they intend to keep (the exclusions).
Buyers must diligently compare those listing agreement inclusions and exclusions at the initial home inspection and question any discrepancies. Buyers may, with the seller's consent, photograph the home inside and out on the date of contract to confirm what appliances, lighting fixtures and built-ins existed on that date. Schedule a final walk-through for immediately before the settlement.
Purchase and sale contracts should contain a provision called "Conveyances," "Personal Property," "Fixtures" or a similar name. These clauses are often supplemented with separate inclusions/exclusions addenda using a check-the-box approach. As appropriate, each item should be checked "yes" or "no." Leaving any line items blank can lead to ambiguity.
What is expected to stay with the property
By contract, these are some of the items that convey: existing built-in heating and central air-conditioning equipment; plumbing; lighting fixtures; storm windows; storm doors; screens; installed wall-to-wall carpeting; exhaust fans; window shades; blinds; window-treatment hardware; smoke and heat detectors; TV antennas; and exterior trees and shrubs.
But there are many gray areas that are the cause of disappointments, complaints and even lawsuits.
For example, just what is a fixture?
Practically speaking, an item becomes a fixture when it is "permanently" attached to the real estate through the application of plaster, concrete, bolts, screws, nuts, wire or nails. Chandeliers and wall sconces directly wired into electrical junction boxes, and built-in appliances such as dishwashers, microwaves, stoves and some refrigerators that become part of the kitchen decor, will usually be deemed fixtures.
Carefully review contract clauses or addenda that list the most common fixtures and personal property items and check off all that are in the home. If some items are not listed, write them in under the "other" clause.
By taking a few basic precautions, paying careful attention to the contract terms and learning the local customs, buyers and sellers can reduce misunderstandings that will create last-minute aggravation on what should be a happy day for all.
Adapted from Harvey S. Jacobs' House Lawyer columns.