Do I Get to Keep the Trade Fixtures?
By: Matthew Petra
“… For in the absence of an express contract as to trade fixtures, there is an implied contract permitting the tenant to remove them at the proper time and in a proper manner. … It has also been held that trade fixtures are removable regardless of the provisions of an express agreement between the parties. … Thus, in disputes between the landlord and the tenant there is a presumption that the tenant, by annexing the fixtures, did so for his own benefit and not to enrich the freehold, and the law accordingly construes the tenant’s right to remove his annexations liberally, at least where removal may be effected without material injury to the freehold. ...” Sweeting v. Hammons, 521 So. 2d 226, 229 (Fla. Dist. Ct. App. 1988).
Unsurprisingly, commercial leases are much more likely than residential leases to address the installation of various fixtures (e.g. faucets, chandeliers, ceiling fans, shelving units, etc.); and, this is especially true with trade fixtures. Trade fixtures, as the term suggests, are used for the trade or business for which a leased premises is leased (e.g. booths and bars for a restaurant, etc.). In some instances, a tenant may want to abandon its trade fixtures after the termination of a lease (e.g. cost of removal is greater than the value of the fixtures). In other instances, a landlord may have a strong motivation to maintain certain trade fixtures after the termination of a lease (e.g. trade fixtures make the property more attractive to prospective tenants).
If you’re a tenant, you might have spent a lot of money acquiring some of your trade fixtures; and, even though your lease is terminating, you might plan to continue on with your business at a new location. Alternatively, as a landlord, you might have a property that is uniquely suited for a certain type of business. For example, if you have a property that’s uniquely suited for restaurants, you may not want the existing tenant removing booths and bars upon termination of the lease.
In any event, as highlighted in the Sweeting v. Hammons case above, pursuant to Florida law, the default rule is that the tenant may remove its trade fixtures. Therefore, if, as a tenant, you want to maintain those trade fixtures, at a minimum, you should ensure that your lease doesn’t prohibit the removal of those trade fixtures. If, as a landlord, you want to maintain those trade fixtures, you definitely need to make that explicitly clear in the lease, since Florida law, by default, allows for the removal of those fixtures (without material injury to the freehold). As with many other lease topics, when dealing with expensive fixtures, a careful review of your lease, with your attorney, is worth your while.