Texas Real Estate State Practice Exam

What are Trade Fixtures in real estate?

1. Required connections between Real and Personal Property

2. Personal Property attached in such a way to make it real property

3. Fixtures used for home improvement projects

4. Required to carry out a business example would be commercial cooking equipment in a restaurant

The correct answer is: Required to carry out a business example would be commercial cooking equipment in a restaurant

Trade fixtures refer to personal property that a tenant installs in a commercial property to conduct business operations. These items are considered necessary for the business's functioning and can include equipment like commercial ovens in a restaurant, display cases, or specialized machinery. The essential characteristic of trade fixtures is that they remain the tenant's personal property even after attachment to the real estate. Therefore, they can be removed by the tenant at the end of the lease term, provided that their removal does not cause damage to the property. This concept plays an important role in commercial leases, as it delineates what the tenant owns versus the landlord’s property. The other options do not accurately capture the specific definition of trade fixtures. For instance, the first choice deals with connections between different types of property rather than focusing on the business context of trade fixtures. The second choice describes fixtures that become real property, which doesn't apply to trade fixtures as they remain personal property. The third choice relates to general home improvement and does not reflect the unique commercial aspect of trade fixtures.