--A restaurant tenant installs built-in refrigerators, stoves and cabinetry into its leased premises. Where the lease is silent on the issue, is the tenant entitled to remove those items at the end of the lease term, or must he leave them behind for the landlord?

--An industrial tenant attaches expensive machinery in its leased premises. When the tenant defaults, does the machinery belong to the landlord or to the lender who financed the purchase of the equipment secured by a personal property lien?

--A tenant and a landlord verbally agree that the tenant may remove a particular item of installed machinery at the end of the lease term. The landlord transfer the real property to a third party who is without knowledge of the prior agreement. Who retains the machinery, the tenant or the purchaser?

--A buyer of real property objects to a seller's efforts to remove a piece of equipment installed in the property. Is the buyer or seller entitled to this equipment, which is not specifically addressed in the purchase contract?

The resolution of these disputes will often turn on a court's determination that the item in question is or is not "a fixture." Unfortunately, in an effort to do the "right thing," courts have created such a blizzard of conflicting factors, that it is often impossible to predict how an item will be characterized. A fixture is most often an item of personal property which has become part of the real property-typically by being attached or affixed. California Civil Code provides that real property consists of land, that which is affixed, incidental or appurtenant to land, and that which is immovable by law. Thus, a determination that an item is not a fixture means that it retains its character as personal property. On first blush, it would appear that most fixture questions should be resolved by applying the statutory analysis, which is based on the method of attachment. In that regard, the California Civil Code generally provides that a thing is deemed to be affixed to land when it is attached to it by roots (trees, vines, shrubs), embedded in land (walls); permanently resting upon it (buildings), or permanently attached by means of cement, plaster, nails, bolts or screws. Thus, in the first question above, the landlord should be entitled to retain the restaurant equipment if it is attached to the real property. Unfortunately, in law, as in life, things are not always so straightforward. Judges have routinely looked past this one factor to a series of factors intended to divine the "intent of the parties" as to the fate of the particular item--particularly, the intent of the party doing the attaching. Where it wishes, a court may deftly sidestep the statutory test by simply questioning just how permanently an item is attached. If its not permanent, it not a fixture. Thus, in addition to the method of annexation, the factors which a court may utilize in in ascertaining the character of an item are as follows:

(i) the relationship of the parties,
(ii) the use to which the real property is being put,
(iii) the adaptability of the item to that use, and
(iv) the difficulty in removing the item, including the resulting damage to the real property.

For many courts, the single most important factor in determining the character of an item is the relationship between the parties to the dispute, including their respective status. Thus, the character of a single, similarly affixed item may differ where the annexer/disputant is the seller of the property, the buyer of the property, the landlord, a long term tenant, a short term tenant, the holder of a personal property lien against the item, the IRS, or a mechanics lien claimant. For example, a court is more likely to determine that a very expensive piece of machinery, whether or however affixed, is a fixture (and thus, part of the realty) where installed by the owner or a long term tenant, than by a short term tenant. Additionally, in a dispute between a buyer and a seller, a court is more likely to find that an item (whether and/or however affixed) is more likely a fixture (and thus, transferred with the real property) than not. In conclusion, given the lack of consistent standards in ascertaining what constitutes a fixture, the writings between the parties takes on heightened importance. Barring very unusual circumstances, the assignment of an item's character which is contained in a written lease or purchase and sale agreement should be determinative as to its nature. Language addressing this issue should be carefully considered in any such agreement.