December 4, 2019

What You Should Know When Selling a “Smart Home”

What You Should Know When Selling a “Smart Home”

The growing popularity of home automation and “smart homes” can cause potential complications when selling a property. Here we consider a common question for selling agents about smart devices. 

Q: I’m selling a “Smart Home” and my seller isn’t sure which devices need to stay with the property. Are smart devices considered fixtures? 

A: It depends. The analysis for determining whether a smart device is a fixture or personal property is not unique. A fixture is typically defined as an item that is permanently attached to the real property, such as a chandelier or window shutters. Items that are not fixtures are considered personal property – or chattel – such as the furniture in the home. Ownership of fixtures transfers with ownership of the house, whereas personal property does not. 

Many smart home devices, such as an Amazon Echo, simply plug into the wall – or are entirely cordless – making them easily moveable. These types of devices are likely to be considered personal property of the seller. Other smart devices, such as smart switches, smart thermostats, smart doorbells, and security cameras, may be hardwired, which would firmly place them into the “fixtures” category. 

There may be situations where the seller has a certain affection for a fixture and does not want it to remain with the property. In this situation, the seller should remove it prior to listing, or name it as an exclusion in the listing. In situations where a buyer wants a smart device that may be considered personal property to remain with the house upon transfer, the best solution is to have an express statement in the purchase contract that stipulates what items the parties expect to remain in the home upon transfer of title. 

If any smart devices are to remain with the property upon transfer, the contract between the parties should stipulate that all accounts that control those devices be fully transferred to the buyer at the time of closing. 

(Originated from Massachusetts Association of REALTORS® Legal Hotline Q&A 12/2019)