Understanding the distinction between chattels and fixtures is essential in any real estate transaction to ensure a seamless purchase and avoid post-closing complications. Chattels, being movable personal property, typically appliances, furniture, and decorations, are not automatically included in the sale unless specifically listed in the Agreement of Purchase and Sale. They differ from fixtures, which are permanently affixed to the property, such as built-in cabinetry, light fixtures, and HVAC systems, and are presumed to be part of the real estate unless explicitly excluded in the APS.

While thorough attention during the transaction process is crucial, parties must also be ready to tackle potential post-closing issues, especially those related to the condition and functionality of chattels and fixtures. Problems may arise when items included in the APS are found to be missing, damaged, or not functioning after closing. By default, chattels and fixtures specified in the APS are expected to be in working order at the time of closing, making it the seller's responsibility to ensure they meet this standard. Common post-closing complaints involve faulty appliances and systems such as ovens, dishwashers, air conditioning units, furnaces, security systems, and locks. If any such items are defective, the buyer may have grounds to seek remedies from the seller. However, when the APS explicitly states that the property, including its chattels and fixtures, is sold "as-is," the buyer’s options for recourse are significantly limited unless the seller has concealed or misrepresented material facts.

A pre-closing walkthrough is essential for buyers to confirm the condition and functionality of chattels and fixtures included in the APS. This step ensures appliances are operational, light fixtures are intact, and all agreed-upon items remain on the property. If issues are discovered post-closing, buyers should first review the APS to understand their options, as it specifies the items included and their expected condition. Clauses requiring items to be in "working condition" or providing warranties strengthen the buyer's position. Buyers can then negotiate with the seller for compensation or repairs, as many sellers prefer to resolve minor issues amicably. If negotiations fail, buyers may pursue legal action, such as filing in small claims court for lower-value disputes, provided they can demonstrate a breach of the APS or concealed defects.

Home warranties or insurance can offer solutions for addressing defects. A home warranty plan may cover certain appliances or fixtures, so buyers should review its terms carefully. For systems like plumbing or HVAC, filing an insurance claim might be an option. If repairs are needed, buyers should document all costs to support negotiations or potential legal action.

Preventing disputes over chattels and fixtures starts with a well-drafted APS. These items are integral to real estate transactions, and disagreements about their condition or presence can cause significant frustration post-closing. Buyers can minimize risks by adopting a proactive approach, including precise APS terms, thorough pre-closing inspections, and detailed documentation. Should issues arise after closing, understanding your legal options and engaging in fair negotiations with the seller can help resolve matters efficiently.

Our dedicated team at Kormans LLP is committed to providing personalized, professional services. Whether it’s reviewing your APS or assisting with post-closing concerns, we work diligently to ensure fair and just resolutions to protect your rights. Contact us today at info@kormans.ca or call (905) 270-6660 to discuss how we can support you.