What Is Chattel?
Chattel refers to tangible, movable personal property. In the context of real estate, the distinction between real property (the land and buildings) and chattel is critical. Real property is conveyed via a deed, while chattel is conveyed via a bill of sale.
Common examples of chattel in a residential transaction include freestanding furniture, potted plants, area rugs, wall-hung artwork, and freestanding appliances (like a standard washer, dryer, or refrigerator).
Chattel vs. Fixtures
The transition from chattel to real property is a common source of litigation. When a piece of chattel is permanently attached to the real estate (like taking a freestanding chandelier and hardwiring it into the ceiling), it becomes a fixture. Fixtures automatically transfer to the buyer with the real estate; chattel does not.
Florida courts use a three-part test (attachment, adaptation, and intent) to determine if an item has transitioned from chattel to a fixture.
Chattel in Real Estate Financing
Mortgage lenders base their loans on the value of the real estate, not the personal property. If a real estate purchase agreement includes a significant amount of chattel (such as a fully furnished home or a boat), the appraiser must separate the value of the chattel from the real estate. Lenders will not finance the chattel portion, which can lead to loan approval issues if the buyer does not have enough cash to cover the difference.
If chattel is being financed (such as business equipment in a commercial transaction), the lender secures their interest by filing a UCC-1 financing statement, which operates similarly to a mortgage but applies to personal property.
Related Terms
- Fixture — Chattel that has been permanently attached to the real estate
- Deed — Used to transfer real estate, not chattel
- Purchase Agreement — Must explicitly list any chattel that is included in the sale
- Appraisal — Excludes the value of chattel for mortgage lending
Barnes Walker Transactional Services
Barnes Walker's real estate attorneys draft comprehensive purchase agreements and bills of sale to ensure clear transfer of both real property and chattel. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC