Legal Question in Business Law in California

Re: Definition: fixture vs equipment, re lease/purchase

The applicable statutes are California Civil Code sections 660, 1013, 1013.5 and 1019, which you can review at your county law library and at many public libraries.

The Code gives only the basic legal framework, however. There is a long history of cases interpreting these sections.

To summarize, the freezers are almost certainly 'trade fixtures' and as such can be removed by the tenant at any time DURING THE LEASE TERM. After the lease term the former tenant's right to remove the trade fixtures is substantially diminished if not extinguished.

Whether items installed by a tenant are trade fixtures depends on five factors: (1) manner of installation, (2) character of the item and adaptation to use, (3) relationship of the parties, i.e. landlord-tenant, buyer-seller, trustor-beneficiary, (4) intention of the parties, and (5) interpretation of any agreement between the parties covering the items.

When a dispute arises between a landlord and a tenant, courts tend to side with the tenant and allow him to remove almost anything he has installed in the building, in the absence of a contrary agreement.

A tenant jeopardizes his right to the trade fixtures if he moves out and leaves them behind without first at least having asserted his right to remove them (and being hindered in so doing by the landlord).