QLD Commercial Lease - Are Cold Rooms a Fixture?

[Kim Williams]

I have purchased a small Café/Takeaway which has a cold-room (already fitted). I would like to know who has to cover the repairs on a cold room under a commercial lease.

 

[Sophea]

Generally, a fixture is considered to be something that is attached to the land so that it becomes part of the land. When determining whether an object is a fixture or chattel, a number of things are considered including the intention of the person who installed it, the object which is "fixed" and the purpose of the supposed "fixture". Generally speaking, one test is to determine whether the object can be easily removed from the property without causing too much damage to the land or property. If it can it is probably a chattel, if not it is likely a fixture.

The NSW supreme Court stated in, Australian Provincial Assurance Co Ltd v Coroneo:
“A fixture is a thing once a chattel which has become in law land through having been fixed to land. The question whether a chattel has become a fixture depends upon whether it has been fixed to land, and if so for what purpose. If a chattel is actually fixed to land to any extent, by any means other than its own weight, then prima facie it is a fixture; and the burden of proof is upon anyone who asserts that it is not: if it is not otherwise fixed but is kept in position by its own weight, then prima facie it is not a fixture; and the burden of proof is on anyone who asserts that it is…”

Who installed the cold room? And how is it fixed to the property?

 

[Ian Macleod]

Are you leasing the premises? Check to see if the issue of maintaining the cool room is dealt with in your lease. (assuming you have one)

 

[Kim Williams]

The cold room assembled prior to myself purchasing the business. Having a close look at the cold room, I would say that it is attached. One wall creates part of my shop, having a counter attached to this wall (also prior to purchase).

Any suggestions as to websites that can assist with information on this? Need things in black and white for this landlord.

 

[Kim Williams]

Are you leasing the premises? Check to see if the issue of maintaining the cool room is dealt with in your lease. (assuming you have one)

Thank you I will do that. Yes I have a lease.

 

[Kim Williams]

Thank you I will do that. Yes I have a lease.

Have just looked over a copy of the lease and there is no mention of the Cold room only about fixtures: Right to Remove Fixtures - during the last month of the term and within 7 days after the end of the lease remove all tenant's fixtures, floor coverings and signs erected by the tenant during the term or purchased with the landlord's consent from any previous tenant of the leased premises (except any fixtures which the landlord or its predecessors in title have paid for) provided they can be removed without causing damage to the lease premises.

The cold room will NO Doubt damage the walls, and is placed on a concrete platform.

My lease also has a section: Abandoned fittings belong to landlord. Basically this part states that any property left by myself or previous tenant becomes the property of the Landlord.

So does this mean the Landlord is Liable to you also?

 

[Sophea]

Sorry Kim, I'm not sure I understand your question. Is the Landlord liable to you for what?

I think the cold room, if it forms one wall of the shop and has a counter attached, then it would considered a fixture since - as you say - great damage would be caused if it was to be removed. Short of involving lawyers, I think the best you could do is show the landlord the legal definition and commentary about what constitutes a fixture and try to reason with him. I would assume that the clause in your lease dealing with fixtures being left at the property, does not have any relevance to the maintenance of them.

Ooh look! I just found this case where court held that a cold room was a fixture: (the summary is here on the Allens website) Allens: Publication: Focus on Leasing

 

[Ian Macleod]

Have just looked over a copy of the lease and there is no mention of the Cold room only about fixtures: Right to Remove Fixtures - during the last month of the term and within 7 days after the end of the lease remove all tenant's fixtures, floor coverings and signs erected by the tenant during the term or purchased with the landlord's consent from any previous tenant of the leased premises (except any fixtures which the landlord or its predecessors in title have paid for) provided they can be removed without causing damage to the lease premises.

The cold room will NO Doubt damage the walls, and is placed on a concrete platform.

My lease also has a section: Abandoned fittings belong to landlord. Basically this part states that any property left by myself or previous tenant becomes the property of the Landlord.

So does this mean the Landlord is Liable to you also?

When you purchased the business did you also purchase the Cold Room? Check your Contract for Sale of Business it should have a list of assets that form part of the purchase.

If its not on the lease who actually owns the cool room? You or the Landlord?

 

[Sophea]

Just another thought, if you are carrying on the lease from previous tenant, then the fixture may not have vested in the Landlord yet, because the tenancy has not been terminated. Therefore, you as the business owner and owner of the "fit out" may be the one responsible for it. I would speak with your landlord to see if he will fix it arguing that since it is clearly a fixture - and part of the property blah blah blah? You will have better chances if the cold room was installed prior to your predecessor by the landlord or before the landlord acquired it. Then it will likely be considered part of the property that he has to maintain. However, if he won't budge on it, just fix it yourself because I don't believe you would get far arguing that its part of his property at this stage, in circumstances where it was installed by the previous tenant as part of the fit out.

 

[Kim Williams]

Yes I was meaning to the maintenance. And I will certainly have a look at the link you have supplied. I would like to also thank all concerned for the assistance given in this matter.