Trade Fixture Law & Legal Definition
A trade fixture is installed by a tenant under the terms of a lease and is used in the business of the tenant. Trade fixtures are removable by the tenant before the lease expires, however, the tenant is liable for any damages caused by such removal. They are distinguished from other fixtures which are considered improvements to real property and which must be left intact when the tenant vacates the premises. In the U.S., a sale of land generally includes any permanent fixtures, unless an item is expressly excluded. Trade fixtures are an exception to this general rule.
An example of a trade fixture is a display case used by a clothing store.
Common factors examined in determining the nature of the fixture include:
- The degree of the item’s annexation or permanence to the property—whether it can be removed without material injury to the land or building to which it was attached. For example, a painted mural would cause extreme damage to the building's wall if it were removed.
- The extent to which the item was adapted for the intended use of the property, that is, its appropriateness for the poses for which the property was used.
- The intention of the person who annexed it.
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