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Real Estate Tip – Is Your Awning Personal Property or Real Estate: Who Decides?
Is Your Awning Personal Property or Real Estate: Who Decides?
Is an awning, HVAC component or entire building classified as personal property or real estate? The law honors and allows landlords, tenants and suppliers to decide whether an asset is real estate or not. For example, a boiler might be classified by the law as a fixture that is part of the real estate, but the building owner and the boiler supplier might agree to call it personal property. If it’s not designated properly it’s up to a judge to decide.
The classification is important to the priority of secured loans, mechanics liens IRS liens and to the tax treatment of the asset. Be sure to check your lease clauses, insurance riders and supplier contracts to avoid inconsistent designations. Work with your legal counsel, tax adviser and insurance agent to carefully select and preserve the classification.
Today’s real estate tip is brought to you by Rick Smith, a member of Bernstein Shur’s Real Estate Practice Group. Stay tuned for more useful tips for real estate professionals.
For more information on personal property designations, contact Rick at firstname.lastname@example.org or 603 623-8700 ext. 8829 or 207 774-1200.