Update 11/12/19: The North Carolina standard Offer to Purchase and Contract has not changed it’s definition of what they consider a fixture in the latest version of the OTP, issued July 2019.
I fully admit that I love my Amazon Echos and Dots. I do nothing with it but ask it for the weather and listen to music but it sure beats the days when having whole-home audio meant running wires through walls and spending thousands of dollars in equipment. I have also fallen in love with smart home switches, which allow me to turn on lights around my home with a simple voice command or dim the lights to set a mood. All of these features are connected to the interwebs through my home’s wifi network and then controlled, in some part, by my Echo and my smartphone.
So what happens when I sell my house? What parts of my smart home ecosystem are considered fixtures and what is considered personal property?
For a refresher course, fixtures are items that are, for the most part, deemed to convey with the home during a sale. In North and South Carolina, our basic test are items that are screwed, glued, nailed, or otherwise permanently affixed to the property. Think of items like light fixtures, built-in microwaves, plumbing fixtures, drapery rods (but not the curtains), and flat panel tv wall mounts. Those are all considered fixtures. Personal property are generally freestanding items so items like a clothes washer, clothes dryer, and refrigerator are personal property. An electric range, for the most part, is free-standing since most are slid into place however they are considered fixtures and only built-in refrigerators carry the fixture label. See – the categories of fixtures vs personal property are not black and white.
They’re so gray that in the latest revision to the North Carolina Offer to Purchase and Contract, 7/2019, the North Carolina Association of Realtors and NC Bar Association gave us an expanded definition of what a fixture is:
This definition does not mention smart speakers and wireless routers however the very first sentence makes things less than clear, saying that “the following items, including all related equipment and remote control devices, if any, are deemed fixtures and shall convey”.
What is meant by “related equipment and remote control devices”? If I can use my voice through a Google Home or Amazon Echo to turn on the lights, has the Echo become a remote control device? What if I use an app on my smartphone to view who’s at my front door via my Ring Video Doorbell? Has my phone become a remote control device or related equipment? Is the router that connects everything together now a fixture?
I’m not an attorney so I posed the question to Will Martin, legal helpline attorney for North Carolina Association of Realtor members. “There is obviously some gray area here as to the scope of the phrase “related equipment and remote control devices.” I don’t think anybody would believe that the wording of paragraph 2 would require the seller to give the buyer their smart phone, but I could definitely see a potential argument regarding the router, as it sounds as though it is integral to operation of the smart home features that you mention. Not as sure about the smart speakers. I think it would be important for the parties and their agents to have a clear understanding about what stays and what goes and to memorialize their understanding through the use of the blanks in paragraphs 2(d) and 3.”
Gray area for sure and I’m not sure it’s one that will be answered anytime soon. Generally, changes and clarifications to our contracts arise following a hearing before the real estate commission or a court of law. In this case, I can foresee a number of agents hitting up their local Best Buy for routers and smart speakers at the behest of their clients who are expecting their new smart home to function just like it did for the Sellers.
In the meantime, Martin’s advice is solid “memorialize their understanding” which is legalese for write it down. Listing agents should find out what smart systems the Seller has in their home, how it’s all connected together and exclude the parts the Seller would not want to convey. Items like a hub, which may be required to make the lights function, may have to stay but the Seller may not feel comfortable giving up their smart speaker or router.
Here too, Buyers should take note of a home that has these items and make your intentions known as to what is to stay. Your expectation is may be completely different from what the Seller is offering. Caveat Emptor