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Smart Home Gear: What Transfers to the Buyer?

For many buyers, especially millennials, “smart home” is an MLS selling point. But with new tech tools being released and updated at breakneck speed, which smart-home upgrades stay with the house and which ones move out with the seller?

ORLANDO, Fla. – As the technological arena expands, more and more homeowners can upgrade their homes with savvy electronic devices.

This creates a great marketing opportunity for Realtors as many buyers are interested in these “smart home” upgrades, but be careful in how you market this, especially if your seller intends to take any of these items with them.

Keep in mind that, ultimately, the contract governs the parties – what is stated in the MLS or may be seen in the property during a showing isn’t necessarily what is going to be conveyed. The personal property listed in the contract prevails over anything else. If you don’t want an ethical or legal complaint filed against you regarding your advertising of a property, it’s important not to promote a feature that may not be part of the sale.

For example, Sally Seller installed a Ring doorbell and a NEST thermostat in her property. She loves the ability to monitor the safety of her home and control the temperature all from her smartphone. Sally Seller mentions these features to her listing agent, who immediately thinks about marketing strategies to promote these upgrades.

After the agent advertises the listing through various media outlets, Bobby Buyer makes an offer, which Sally accepts. Shortly before closing, the listing agent goes by the property and realizes that Sally removed the NEST thermostat as well as the Ring doorbell and replaced each with the original hardware. When confronted about the changes, Sally tells her listing agent that she installed the items herself and paid for the upgrades, so she’s taking them with her since they’re easily removed.

This upsets Bobby Buyer as he considered those upgrades when making his offer. He threatens to file a complaint against the listing agent and sue Sally for removing those items.

This is not an ideal situation for anyone involved. Let’s consider what could have changed this outcome.

When the listing agent took Sally Seller’s listing, the agent should have done a detailed walk-through of the property with the seller, asking what items Sally intended to keep/take. Given the portability of many devices these days, it’s imperative to have this discussion with your seller to avoid conflict later.

Once sellers identify the personal property items they intend to take with them, the listing agent should make sure that the contract clarifies that between the parties. Failure to take these details into account can result in the parties heading to court, where a judge is like to apply a fixture analysis.

On the buying side: When touring the property with buyers, an agent should have a conversation with them about what items the buyers find to be of value to the property. Then make sure those are noted in the contract as conveying with the property, so it’s clear to everyone.

The determination of whether or not an item is a fixture involves an analysis of the personal property – whether the item is affixed to the realty to the extent it becomes permanent and whether removal of the item impairs the property. This is specific to the facts of each case and gets trickier depending on the item. For example, removing all the kitchen cabinets would likely be analyzed much differently than removing a Ring doorbell.

This is why it’s so important for agents to discuss these matters with customers before the parties go under contract. Both parties should clearly understand what is going and what is staying.

Meredith Caruso is Associate General Counsel for Florida Realtors

© 2020 Florida Realtors®