A question that we are often asked is “How do you identify what is a landlord’s fixture and what is a tenant’s fixture?” This becomes particularly important to the parties at the end of a lease.
Who the fixtures are attributed to can have a very significant impact on the way they should be treated.
To be considered as a tenant’s fixture the items must have been affixed to the premises by or on behalf of the tenant and belong to a recognised category of tenant’s fixture. In the case of commercial leases the category will most likely be trade fixtures. The item must also have been affixed with the intention of removing it as and when appropriate. The tenant would generally retain the right to remove these fixtures throughout the term of the lease, unless the lease provides otherwise. However, if the tenant leaves them behind then they would be treated as becoming part of the premises. It is worth noting that if the tenant does remove them, then it must make good the damage caused or this could lead to difficulties with respect to the repair covenants.
Sometimes there is an express provision in a lease obliging a tenant to remove its fixtures at the end of the term. However if a new lease for the premises has been granted to the same tenant, then the obligation to remove these needs to be expressly carried forward into the new lease otherwise the fixtures become part and parcel of the premises. This means if, for example, a new lease has been granted under the Security of Tenure Provisions either following the service of a Section 25 Notice by the landlord or a Section 26 Notice by the tenant and the fixtures have not been considered in the granting of the new lease, then this may have unintentional consequences for the landlord who cannot then force the tenant to remove the fixtures or the tenant who wishes to take fixtures with them and is now unable to do so.
The landlord’s fixtures are essentially fixtures which are not tenant’s fixtures. This may be because they were in-situ on the grant of the lease, were installed or paid for by the landlord or there are circumstances which would make it unreasonable to allow the tenant to have the right to remove them.
Working out what should and should not be removed at the end of a lease can be a particularly problematic and tricky area. This can be further complicated where there is an obligation on the tenant to offer up vacant possession. It is always recommended that advice should be taken in advance of the vacation to ensure that the parties are clear on what does and does not need to be done. Otherwise, tenants can find themselves in difficulties, and facing a breach of covenant claim or failing to effectively operate a break option.