Personal property

Key Takeaways

• Personal property is movable and not permanently attached to land. Chattels and personalty are older names for the same category.
• Personal property does not pass with the deed. It moves by delivery or a bill of sale, while RCW 64.04.010 requires a deed for real estate and any interest in it.
• An item can change categories. Personal property annexed to land with the intent that it stay becomes a fixture and belongs to the real property.
• In Washington, machinery or equipment a commercial tenant installs is a trade fixture and stays the tenant's personal property no matter how firmly it is attached (WAC 458-12-005).

What It Means

Personal property is everything a person owns that is not land and is not permanently attached to land. The older words for it, chattels and personalty, mean the same thing and appear on exams as substitutes for it. The test is attachment, not price or size: a $60,000 boat parked in the driveway is personal property, and a $400 water heater strapped to the wall and plumbed in is part of the Real Property.

The category decides what travels with a sale. When land changes hands the real property goes automatically, and the personal property does not, which is why a seller can load the refrigerator into the truck and a buyer can arrive to an empty kitchen. The written agreement is what settles it, either by naming the items that stay or by listing what the seller will remove.

The hard cases sit on the boundary. A Fixture began life as personal property and became real property when it was installed, and Trade Fixtures that a business tenant bolts into a leased space raise the same question from the tenant's side. What tips an item one way or the other is how it was annexed and why, which is the Intent Of The Annexor question.

How It Works in Washington

In Washington, the property tax statutes draw the line the rest of the vocabulary follows. RCW 84.04.080 says personal property is construed "to embrace and include, without especially defining and enumerating it, all goods, chattels, stocks, estates or moneys," and then names two items students find surprising: standing timber held or owned separately from the land it grows on, and leases of real property for a term less than the life of the holder. RCW 84.04.090 puts "other fixtures of whatsoever kind" on the real property side with the buildings and improvements, so the fixture question is what moves an item from one list to the other.

Tenants get their own rule. WAC 458-12-005 provides that machinery or equipment of a commercial or industrial business operating on leased land or in rented quarters "is a trade fixture; i.e., the tenant's personal property, no matter how firmly it may be attached to the landlord's realty," unless removing it would virtually destroy the building or seriously damage the landlord's real property.

Transfer works differently for each category. RCW 64.04.010 requires a deed for every conveyance of real estate or any interest in it, and nothing comparable governs goods, which move under the sale of goods rules in chapter 62A.2 RCW. Washington even converts attached items into goods when they are meant to come off: RCW 62A.2-107 treats a contract to sell growing crops, timber, or other things attached to realty and "capable of severance without material harm thereto" as a contract for the sale of goods. In day to day practice the purchase and sale agreement does this work, listing what stays and what the seller takes.

Example

Marisol lists her Kent house at $585,000. The purchase and sale agreement says the built-in dishwasher, the wall-mounted television bracket, and the attached shelving stay with the house, while the washer, the dryer, the television itself, and a storage shed resting on skids in the backyard are personal property she plans to sell separately.

The buyer, Cole, wants all four. They sign a bill of sale for $2,400 covering the washer, dryer, television, and shed, and it settles at closing alongside the $585,000 deed, so Cole pays $587,400 in total. Two weeks before closing Marisol changes her mind about the shed and hauls it to her new house. Nothing in the deed stopped her, because a shed on skids was never attached to the land, but the bill of sale had already promised it to Cole, so the problem moves from property classification to the contract they signed. The category question and the contract question are separate, and both have to be answered.

Common Mistakes and Exam Traps

• Chattel and personalty are synonyms for personal property, so a question that swaps the word is not swapping the category.
• Value does not decide the category. A cheap water heater that is plumbed in is real property, and an expensive boat in the driveway is personal property.
• Standing timber can be personal property. RCW 84.04.080 lists timber held or owned separately from the land it grows on as personal property.
• A lease of real property for a term shorter than the life of the holder is listed as personal property under RCW 84.04.080, even though the tenant holds an estate in land.