What happens to trade fixtures if not removed before lease termination?

When trade fixtures are not removed before the termination of a lease, they become part of the real property. Trade fixtures are items that a tenant installs in a leased space to carry out their business. These items are typically classified as personal property for the tenant, as they are used to facilitate the tenant's operation.

However, if the tenant fails to remove these trade fixtures at the end of the lease, they legally convert to real property, meaning they become an integral part of the leased premises. This is because, in most leases, there is an expectation that any trade fixtures left behind will be relinquished to the landlord, thereby enhancing the value or functionality of the property itself.

This principle ensures clarity in real estate transactions, protecting property owners’ rights while balancing the interests of tenants. Thus, if a tenant wishes to retain ownership of these fixtures, they must take care to remove them prior to the lease's termination.