2

I read up on trade fixtures. They are an exception to fixtures, and generally remain the property of the lessee despite being attached to the building. It looks like this rental agreement is trying to reverse that exception.

Here's the relevant paragraph. Emphasis added by me.

  1. TRADE FIXTURES, INSTALLATION AND REMOVAL: WITH THE WRITTEN CONSENT AND APPROVAL OF THE LESSOR, LESSEE AT LESSEE SOLE COST AND EXPENSE MAY INSTALL IN THE LEASED PREMISES SUCH FURNITURE, EQUIPMENT AND TRADE FIXTURES, AS LESSEE DEEM NECESSARY FOR THEIR BUSINESS. ALL TRADE FIXTURES OR EQUIPMENT WHICH ARE AFFIXED (AFFIXED IS DEFINED TO MEAN ANYTHING WHICH IS SCREWED, GLUED OR BOLTED TO, IN OR ON THE INTERIOR OR EXTERIOR OF THE BUILDING) TO AND INTEGRATED INTO THE LEASED PREMISES SHALL BECOME THE PROPERTY OF THE LESSOR. THE LESSEE WILL BE FULLY RESPONSIBLE FOR THE REPAIR, MAINTENANCE, STORAGE AND REPLACEMENT, IF NECESSARY FOR ALL OF THE FIXTURES ON THE PREMISES, INCLUDING THE PROPERTY OF THE LESSORS WHICH THE LESSEE MAY BE USING, INCLUDING REFRIGERATION UNITS, FANS, ELECTRICAL ITEMS ANY OTHER ITEMS WHICH ARE OR MAY BECOME THE PROPERTY OF THE LESSOR. (SEE ATTACHMENTS NUMBERS 1 AND 2 OF THE INVENTORY LIST OF ITEMS WHICH ARE ACKNOWLEDGED BY LESSOR AND LESSEE TO BE OWNED BY THE LESSOR. SUCH ITEMS MAY BE MOVEABLE OR INTEGRATED AND AFFIXED AND OR BE AFFIXED TO THE LEASED PREMISES, ALSO INCLUDED ARE THE ITEMS WHICH ARE RENTED FROM THE LESSOR BY THE LESSEE. ALL OTHER TRADE FIXTURES OR EQUIPMENT MAY BE REMOVED FROM THE LEASED PREMISES AT ANYTIME DURING THE TERM OF THIS LEASE, PROVIDED THAT THE LESSEE ARE NOT IN DEFAULT AND FURTHER PROVIDED THAT NO INJURY SHALL BE DONE TO THE STRUCTURAL STRENGTH OF THE BUILDING AND THAT THE BUILDING BE RESTORED SUBSTANTIALLY TO ITS ORIGINAL CONDITION. IN THE EVENT OF DEFAULT BY THE LESSEE, OR IF ANY SUCH FURNITURE, EQUIPMENT OR TRADE FIXTURES ARE NOT REMOVED FROM SAID PREMISES BY THE LESSEE PRIOR TO THE EXPIRATION OR SOONER TERMINATION OF THE LEASE, THE SAME SHALL BECOME THE PROPERTY OF THE LESSOR.

The latter emphasised clause seems to me to ambiguously mean two very different things:

  1. As long as we get the trade fixtures out before the lease is over they remain ours (or technically become our property again?).
  2. In combination with the first emphasised clause it sounds like once we screw something to the wall it belongs to the landlord, who can then come in at any time and remove it.

The latter scenario sounds a bit bogeyman to me, but I really like to know what I'm signing.

EDIT 2016-08-02: This is a commercial lease for a small storefront. We're hoping to put in a divider wall, a counter, and some shelving, all bolted to the walls, and we don't want to forfeit it all later if we need to move out. The realtor has since added this paragraph, and we have signed.

  1. LESSEE MAY INSTALL DECORATIVE WALL PANELS, SHELVING, CABINETS IN A WORKMANLIKE MANNER WITH LESSOR’S APPROVAL. AFFOREMENTIONED ITEMS SHALL REMAIN THE PERSONAL PROPERTY OF LESSEE AND CAN BE TAKEN WITH LESSEE UPON VACATING THE SPACE. LESSEE SHALL BE RESPONSIBLE FOR RESTORATION OF PROPERTY TO ITS ORIGINAL CONDITION AND ANY ASSOCIATED COSTS UPON REMOVAL OF SAID PERSONAL PROPERTY.
  • 2
    The first bolded paragraph appears to only apply to those trade fixtures which are not only affixed, but also "integrated into", the premises. Whatever that means. – Nate Eldredge Oct 1 '16 at 0:59
  • In so many words, it says if you put something into the house so that it's part of the house, it being part of the house makes it the property of the houseowner, which is the landlord. On the other hand if you can take it out and not damage the house, it's not part of the house, just temporary furniture, so it's still yours. – Nij Oct 1 '16 at 3:23
  • @NateEldridge I think "integrated into" means that it's the property of the lessor but, since it's part of the leased property, it's in the lessee's possession (so the lessor can't "come in at any time and remove it"). – phoog Oct 1 '16 at 6:20
  • Is this a commercial or residential lease? – David Oct 1 '16 at 18:32
  • 1
    This reads to me that if you liquidate your failed business effectively you can sell off your equipment, but if you get locked out the landlord doesn't need to decide what is yours or tie up the location waiting for you to clean up. – user662852 Oct 2 '16 at 15:53

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Browse other questions tagged or ask your own question.