- Hot Coffee has been leasing a store to sell their custom coffee mugs. They purchased and installed cabinets, shelves, and a counter to display and sell the mugs. What is the test used to determine if something is a fixture? Are these items considered personal property or fixtures? Will they belong to Hot Coffee or to the landlord when the lease expires?
Based on the text book the courts look to three tests to determine whether a particular object has become a fixture annexation, adaptation and intention. In the annexation test the object must be attached with nails, screw, glue, bolts or some other physical device. With adaptation the object must be to the use or enjoyment of the real property. Lastly comes intention, the object must benefit the property for example a heating system. Based on my understanding the items are considered personal property because they meet the three conditions. The items installed make the business more comfortable to operate, items are removeable without causing any damage to the property and they can be removed before the tenant turns over possession of the property. The items will belong to Hot Coffee when the lease expires. (36.3 Fixtures)
- If Hot Coffee and the landlord decided to each contribute 50% to the purchase of a new location for the Hot Coffee business, what are two of the options they could use to buy the property together? What are the consequences for each option?
I believe Joint Tenancy and tenancy in common would be the two best options for Hot Coffee and the landlords new purchase. With joint tenancy both parties have equal right to possession of the property but aren’t equal owners of it this is based on the right of survivorship, meaning either party becomes sole owner when the other dies. This would be a big consequence because either party can lose the property in the long run. Tenancy in common ownership does not own a specific portion of the real estate, each party has an undivided share in the whole. The only problem I see is that by having a tenant in common when either party passes their interest on the property passes to their heirs not the tenant in common. This wouldn’t be beneficial to either party in the long run as well. (34.1 Forms of Ownership)