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Auctioneers sell many personal property items from commercial and residential improvements, where either the owner or tenant has installed those items as annexations. Today, we explore this concept in more detail.

First of all, there are two parties to a lease — the landlord (lessor) and the tenant (lessee.) The contract these two parties sign transfers possession from the lessor to the lessee for some defined (or undefined) period of time, while the lessor maintains title.

“Trade fixtures” by definition are personal property items annexed (attached) by the lessee to a rented space to be used in the commercial trade therein. At the conclusion of a lease, the lessee has, by default, the right to remove.

Otherwise, any annexations by the lessor are simply called fixtures. At the conclusion of the lease, the lessor maintains ownership of such to either keep or sell.

Therefore, if an auctioneer was selling a vent hood that belonged to the lessee, he would need a contract with the lessee. However, if an auctioneer was selling a vent hood that belonged to the lessor, he would need a contract with the lessor.

Additionally, the contract (lease) might override the default positions noted above. For instance, the lease could say any annexations by the lessee must remain as property of the lessor. It would be highly unusual, however, if the lease transferred ownership of annexations belonging to the lessor to the lessee.

Leases involving residential property with a lessor and lessee are typically handled differently. Annexations by the lessee intended to remain with the property usually remain, and annexations by the lessee intended to be removed usually are removed. Any lessor annexations almost always remain. Here again, the contract (lease) could override or clarify these default positions.

For either residential or commercial property, a lessee would likely be responsible for restoring any areas damaged by the removal of any fixtures. For our example of a vent hood, the lessee would probably have to put the vent area back to its condition before the hood was installed or suffer financial consequences.

Are you an auctioneer selling personal property previously annexed in a commercial or residential scenario? As with any auction, be sure you know who owns those chattels, as well as have a contract in place with that owner (or owners.)

Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.