What is a trade fixture?

A trade fixture is defined as personal property that is affixed to real property for the purpose of conducting business. This distinction is important because, while trade fixtures are attached to the building or land, they are considered personal property of the business owner rather than part of the real estate itself. For example, a restaurant may install a specialized kitchen unit that is essential for its operations; even though this unit is physically attached to the premises, it remains the property of the restaurant owner and can be removed at the end of their lease term.

Understanding trade fixtures is crucial in real estate and business law, particularly concerning lease agreements. It indicates how a tenant can use and modify a space to meet their business needs while also outlining what happens to such installations at the termination of the lease. This concept helps clarify the rights and responsibilities of landlords and tenants, making it a key concept in property law.