An item a commercial tenant installs to conduct business, which remains personal property removable before the lease ends.
Why Trade Fixture matters on the exam
This term belongs to Property Ownership. The questions below are real items from Freehold's bank that use it - each one cites its source.
Exam questions using Trade Fixture
Every Freehold question shows why the right answer is right — and cites its source.
A restaurant tenant installs a commercial pizza oven for its business. At the end of the lease, the oven is best described as:
Real property that must remain with the building
A fixture owned by the landlord
An improvement that transfers with the deed
A trade fixture the tenant may remove before the lease expires
Show answer & explanation
A trade fixture the tenant may remove before the lease expires — Trade fixtures are items a commercial tenant installs to conduct business. Unlike ordinary fixtures, they remain the tenant's personal property and may be removed before the lease ends, provided any damage is repaired.
Source: PSI National Real Estate Exam Content Outline §1 Property Ownership
If a purchase agreement expressly states that the seller's dining room chandelier is excluded from the sale, this agreement:
Is invalid because chandeliers are always considered personal property
Has no legal effect since fixtures automatically convey with the home
Overrides the general legal presumption and controls how the item is treated at closing
Converts the chandelier into a trade fixture
Show answer & explanation
Overrides the general legal presumption and controls how the item is treated at closing — Because parties can contractually agree on the disposition of any item, an express exclusion clause in the purchase agreement overrides the general common-law presumption that attached items convey with the property.
Source: PSI National Real Estate Exam Content Outline §1 Property Ownership
If a commercial tenant fails to remove a trade fixture before the lease term ends and vacates the premises, what typically happens to the item?
The tenant retains ownership indefinitely and may return for it anytime
The landlord generally must pay the tenant fair market value for the item
The item automatically reverts to the original manufacturer
The item is generally deemed abandoned and becomes the landlord's property
Show answer & explanation
The item is generally deemed abandoned and becomes the landlord's property — A trade fixture left behind after the lease expires and the tenant vacates is typically considered abandoned personal property and becomes part of the real estate, owned by the landlord.
Source: PSI National Real Estate Exam Content Outline §1 Property Ownership
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