Vacant possession – the difference between a chattel and a fixture

The ambiguity surrounding the description of ‘vacant possession’ arose in the recent case of Riverside Park Ltd v NHS Property Services Ltd (July 2016), highlighting just how vital it is to distinguish between what constitutes a ‘chattel’ and what constitutes a ‘fixture’ in order to provide vacant possession when seeking to determine a lease.

The facts in Riverside Park Ltd v NHS Property Services Ltd

In this instance, NHS Property Services Ltd was the tenant of office space in a building let by the landlord, Riverside Park Ltd. The tenant served a notice to determine the lease after 5 years of the 10 year lease. The ability to determine was conditional upon ‘vacant possession’. On the break date, a number of items remained within the property, namely kitchen units, window blinds, a burglar alarm and an abundance of partitioning. This case concentrated on the partitioning and whether it was a tenant’s chattel or a fixture.

The decision

The Court found that the partitioning was a tenant’s chattel that was required to be removed for the break to be effective. The Court reached the conclusion that, as the partitioning was only held in place by screw fixings, the partitioning could not qualify for the status of a ‘fixture’ due to it being (a) able to be removed without causing damage the property and (b) for the benefit of the tenant as opposed to “affording a lasting improvement to the premises”. The Court held the partitioning was a tenant’s chattel and should have been removed prior to the break date, in order to provide ‘vacant possession’.

Commentary

This case serves as a reminder to those attempting to determine a tenancy, a condition of which is vacant possession. As a result of these conditions, tenants should take advice as to what should be removed to successfully operate a break.

This case highlighted that both landlords and tenants should be aware of the alterations carried out to the property in order to know whether the removal of an item will be mandatory. If in doubt, it should be removed!

For further information, please contact the Real Estate Disputes Team at Hamlins.