Trade Fixture Agreement

Trade Fixture Agreement

A Trade Fixture Agreement is a legal document that outlines the rights and responsibilities regarding fixtures installed by a tenant in a leased commercial property. Trade fixtures refer to items that a tenant installs in a rental space to conduct their business, such as shelving, equipment, or signage. These fixtures are typically considered the tenant’s personal property, even though they are physically attached to the real estate.

In a Trade Fixture Agreement, the parties will define which fixtures are considered trade fixtures, the process for their installation and removal, and any obligations the tenant has at the end of the lease term. Generally, tenants have the right to remove their trade fixtures, provided they do so without damaging the property. However, if the tenant fails to remove the fixtures before the lease ends, the landlord may claim ownership of those items.

For example, if a restaurant tenant installs a commercial oven and specialized lighting for their business, these items are classified as trade fixtures. Upon lease termination, the tenant has the right to take the oven and lighting with them, assuming they adhere to the stipulations laid out in the Trade Fixture Agreement and restore the premises to its original condition. This agreement ensures both parties have a clear understanding of their rights and responsibilities, minimizing disputes related to the fixtures.