Underwriting Manual: Fixtures

See Also

Standard Exceptions

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State Supplements

View state supplements to the national underwriting manual.

Underwriting Manual Subtopic

In General

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ALTA policies define land as follows: "the land described or referred to in Schedule A, and improvement affixed thereto which by law constitute real property." Obviously, this definition of land does include fixtures and growing crops. The latter are easily definable, but what constitutes a fixture is somewhat difficult to legally conceptualize.

Security interests in goods or items, which are or are to become fixtures, are governed by the provisions of the Uniform Commercial Code. The Code gives them priority over real estate interests when security interests are perfected and recorded in accordance with its provisions.

Paradoxically, the Uniform Commercial Code avoids the task of defining what a fixture is and leaves the definition of a fixture to a state's real estate law: "Goods are fixtures when they become so related to a particular real estate that an interest in them arises under real estate law." UCC section 9-3132(1)(2).

Undoubtedly, the determination or interpretation of whether a chattel has become a fixture is a matter of the law of the state where the land is located.

Underwriting Manual Subtopic

Title Insurance Considerations Regarding Fixtures

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No title insurance policy should itemize or specify in Schedule A those parts of the land which once were chattels but have now become fixtures.

Any fixture, the ownership of which is different from the ownership of the remainder of the land, together with any claim of its ownership or liens affecting it the same, must be excluded from coverage through proper exceptions in Schedule B of the policy.

Severance of the fee and the improvements may render the improvements and fixtures not insurable.

No title insurance policy should be written on property on which a mobile home is located unless you are positive the mobile home has become a part of the real estate.