The distinction between movable and immovable property

Immovable property can be defined as the land, all buildings on the land and all permanent improvements or fixtures to the land.

The traditional approach to defining a fixture was laid down by the courts many years ago.

The following 3 factors were taken into consideration:

• Nature and purpose of the attachment.
• The degree and manner of the fitment.
• The subjective intention of the person annexing the object.

Years later the courts re-visited and expanded on this principle to include moveable property intended to permanently serve the immovable thing and essential for its efficient use or utilization.

When buying or selling a property, it is of utmost importance that the purchaser and seller understand what is included in the purchase price of the property. To avoid any uncertainty, it is advisable for both the seller and purchaser to complete a list that stipulates the movable items that are included in the sale.

Legal Lowdown

Movable property consists mainly of the owners’ personal belongings that can be moved freely and are not affixed to the property itself. Furniture, curtains, door keys and pot plants are examples of movable property and are automatically excluded from the sale agreement.

Immovable property can be defined as the land, all buildings on the land and all permanent improvements to the land. This includes movable objects that are permanently fixed, glued, or cemented to the land or improvements on the land by means of accession. Built-in cupboards, fitted bathroom mirrors and security gates all form part of immovable property.

The fact that immovable property consists of land, and all permanent improvements to the land, has significant consequences. Land and permanent improvements cannot be owned by different owners. Upon land being sold or leased, both the land and permanent fixtures need to be delivered to the purchaser or tenant. This is a common law principle that is sometimes referred to as the “solo cedit rule”.

When a mortgage bond has been registered on a piece of land, the mortgagee’s security lies in both the land and its improvements. Should the mortgagor default on his mortgage agreement, the mortgagee will sell the land as well as permanent fixtures to recover the outstanding amount. The valuation of land is greatly influenced by any permanent fixtures. This means that the value of the land and its permanent fixtures must be included in its valuation.

At what stage can movable property be classified as a fixture and therefore as immovable property? Accession is the original method of acquisition of ownership. It can also be described as the process whereby a movable item becomes immovable by becoming attached to the land, losing its own independence, and becoming a fixture. The owner of the immovable property also becomes the owner of the item.

The test in defining a fixture is threefold and was identified in Olivier v Haarhoff & Co where the learned judge noted: “The conclusion to which I have come is that it is impossible to lay down one general rule; each case must depend on its own circumstance. The points chiefly to be considered are the nature of the objects of the structure, the way in which it is fixed, and the intention of the person who erected it. And of these, the last point is in some respect the most important”^1.

In McDonald v Radin and The Potchefstroom Dairies and Industries Co 1915 AD 454 (Potchefstroom Dairies) Innes CJ approved the threefold text that was identified in Olivier vs Haarhoff & Co:

• Nature and purpose of the attachment.
• The degree and manner of the fitment: If the object loses its own independence to form part of the fixture or if the object cannot be separated again without causing damage to the property the object would be regarded as immovable property.
• The subjective intention of the person annexing the object.

In Potchefstroom Dairies, the applicant sold certain premises to Jacobson in terms of an instalment agreement. This agreement stipulated that if Jacobson failed to pay one instalment, the seller is entitled to cancel the agreement and claim all improvements made as forfeited. Upon payment of the final instalment, the premises would have been transferred to Jacobson. Thereafter, Macdonald sold some machinery to Jacobson, and the parties agreed that Macdonald would install the machinery on Jacobson’s new property. It was further agreed that the purchase price would be paid in instalments and the machinery would remain the property of Macdonald until the last payment has been made. Jacobson could not meet his financial obligation towards Potchefstroom Dairies nor Macdonald and the matter was placed before the court to determine if the machinery had become, by means of accession, a fixture and thus immovable property belonging to the seller. Although the machinery was installed on the premises with concrete, nuts and bolts it could still be removed without causing damage to the premises. The court followed the traditional approach by placing emphasis on the first two objective factors and after not being able to clearly determine that accession had taken place, only considered the last factor to be the decisive one. The nature of the hire-purchase agreement that was concluded between MacDonald and Jacobson made it clear to the court that MacDonald had no intention to transfer ownership of the machinery to Jacobson prior to receiving the last instalment and thus accession did not take place.

In Senekal v Roodt 1983(2) SA 602 T the purchaser of immovable property approached the court for an order to compel the seller to return certain bar stools and steel cabinets that were deemed by the purchaser to constitute fixtures and thus form part of the immovable property purchased. The seller took the decision on appeal and the court ruling was upheld.

Ackermann R challenged the requirements as set out in MacDonald and deviated from the traditional approach: “In view of the foregoing authority, I consider that the principle, for the purposes of the present case, can be formulated as follows: An auxiliary thing will be, for the purposes of a purchase contract of immovable property considered as part of the property sold, if it is intended to be of permanent service to the immovable thing and is essential for its efficient use or utilization of the immovable thing (which is the principle thing)”.

When buying or selling a property, it is of utmost importance that the purchaser and seller understand what is included in the purchase price of the property. Taking into consideration the case law, certain objects may be viewed as fixtures by the purchaser, however, the seller may claim the items as movable items of a personal nature. To avoid any uncertainty in his regard, it is advisable for both the seller and purchaser to complete a list that stipulates the movable items that are also included in the sale.

1 ^{Olivier v Haarhof & C 1906 TS 497 799.0}

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Written by Maret Carroll

Moderated and approved by Wessel de Kock

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