Severance
Definition and meaning of Severance in real estate.
Severance is the legal process of changing an item of real property into personal property by physically detaching it from the land or building. This action alters the legal status of the item, making it no longer part of the real estate.
In more detail
In real estate, property is divided into real property, which is land and anything permanently attached to it, and personal property, which is movable. When a fixture, such as a chandelier or custom shelving, is removed from a home, it undergoes severance and becomes personal property again.
Disputes often arise during home sales if a seller performs severance on items that the buyer assumed were fixtures included in the purchase price. To prevent these conflicts, purchase agreements should explicitly list which items will be severed and removed by the seller and which will remain with the property.
Real estate agents advise clients to perform any desired severance before listing the home for sale to avoid confusing potential buyers.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Legal transformation | Changes real property into personal property |
| Physical action | Requires detaching, unbolting, unscrewing, or harvesting |
| Best practice | Disclose any intended removals in the written purchase agreement |
Before putting their home on the market, a seller unscrews an antique dining room chandelier and replaces it with a standard light fixture, completing the severance of the antique piece.
Frequently asked questions
Is cutting down a tree considered severance?
Yes, a standing tree is real property, but once it is cut down, it undergoes severance and becomes personal property in the form of lumber.
How does severance affect a real estate sale?
If a seller performs severance on a fixture without disclosing it, the buyer may legally demand its return or financial compensation at closing.
Related terms
Sources & references
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