How to Determine Whether a Chattel Becomes a Fixture ?
In Appeal of Sheetz, Inc., 657 A.2d 1011, 1012-1013 (Pa. Cmwlth. 1995), the Court had to determine whether a gasoline pump canopy was a fixture, and thus taxable as realty, or was personalty, and thus not subject to realty tax.
The Sheetz Court began by setting out the broad categories of chattels in a quote from our Supreme Court, in Clayton v. Lienhard, 312 Pa. 433, 167 A. 321 (1933):
Chattels used in connection with real estate are of three classes: First, those which are manifestly furniture, as distinguished from improvements and not peculiarly fitted to the property with which they are used; these always remain personalty....
Second, those which are so annexed to the property that they cannot be removed without material injury to the real estate or to themselves; these are realty, even in the face of an expressed intention that they should be considered personalty....
Third, those which, although physically connected with the real estate, are so affixed as to be removable without destroying or materially injuring the chattels themselves, or the property to which they are annexed; these become part of the realty or remain personalty, depending upon the intention of the parties at the time of the annexation; in this class fall such chattels as boilers and machinery affixed for the use of an owner or tenant but readily removable....657 A.2d at 1012-1013.
Next, the Sheetz opinion sets out the test for determining whether a chattel that falls within the third class becomes so affixed that it becomes part of the realty:
A fixture is an article in the nature of personal property which has been so annexed to the realty that it is regarded as part and parcel of the land. Black's Law Dictionary 575 (5th Ed. 1979).
The considerations to be made in determining whether or not a chattel becomes a fixture include:
(1) the manner in which it is physically attached or installed;
(2) the extent to which it is essential to the permanent use of the building or other improvement;
(3) the intention of the parties who attached or installed it. Id. at 1013 (quoting Gore v. Bethlehem Area School District, 113 Pa. Commw. 394, 537 A.2d 913, 915 (Pa. Cmwlth. 1988)).