The common law test for the determination of fixtures; intent, adaptability, and annexation; attempted to resolve conflicting status claims in disputed items of property. The same tests were applied in condemnation proceedings, where the issue is not which party should prevail, but which party should bear the economic consequences arising because of the condemnation. A test is presented for compensability of trade fixtures that is dependent not solely on whether such fixtures were intended to become part of the realty and were affixed and adapted thereto, but whether such fixtures were condemned because modern appraisal techniques would indicate it to be a denial of just compensation to hold otherwise. This test of compensability can be applied to owner's fixtures as well as tenant's fixtures. All appellate trade fixture cases as well as pertinent legal and appraisal articles in manuscripts were reviewed. The modern fixture appraisal determines the economic consequences arising because of a condemnation to machinery, equipment, and fixtures. The appraiser can determine whether the fixtures can physically be removed from the condemned premises, and, if so, whether such removal would cause them to lose substantially all their value. The test whether an owner's fixtures have been condemned as part of the real estate should be whether the fixtures will lose substantially all of their value on removal from the condemned premises. If they will, the owner is entitled to be paid their in-place value or the extent to which the in-place value of the fixtures has enhanced the value of the condemned real estate. The test whether a tenant's fixtures have been condemned should also be whether the fixtures will lose substantially all of the in-place value of removal from the condemned premises. If they will, the tenant is entitled to be payed their in-place value.
Abstract