09 Oct Real estate law: Tenant installed property
Can long-term tenants remove and take permanent fixtures, such as kitchen appliances, heating/cooling equipment, etc. if they are the ones who paid for and had the equipment installed? What if the rental unit initially had no such equipment when they moved in? The law can be a bit tricky when it comes to tenant installed property.
This question can arise if tenants are forced to leave for non-payment of rent. It can also come up at the end of a tenant lease. A landlord may want the installed property to remain, or in some cases, he may want it removed. Ideally, the situation should be addressed in a lease agreement signed by the tenant when initially moving into the unit.
Some lease agreements have a clause that makes any additions, alterations or improvements the property of the landlord without any obligation for the landlord to reimburse the tenants. Sometimes, ‘trade fixtures’ are excluded from the agreement, meaning that the landlord has no ownership of these items.
Trade fixtures are items that do not become part of the premises and may be taken by the tenants at the end of the lease period. Trade fixtures are items that tenants may use in the performance of their jobs and that can be removed from the building without causing any major damage to the property. In other words, these items are not meant to enhance the value of the estate but to allow the tenants to perform their jobs and are considered temporary.
An improvement to the landlord’s property—on the other hand—is something that tenants add to improve the value of the property. If the lease agreement states that the tenants have no right to make these types of changes to the property without the landlord’s consent, then the tenants have no legal right to remove these items upon moving out.
The laws on tenant installed property vary from state to state. Do you have legal questions concerning real estate transactions? The legal professionals at Barsh & Cohen, LLC have decades of legal experience in all things real estate. Contact us to schedule a consultation.