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As some retail tenants face failing businesses — or worse, they have already shuttered their stores — shopping center owners and managers must deal with the aftermath. The wreckage of a failed retail business often includes the tenant's personal property that remains in the leased space. Some retail tenants offer this personal property to the shopping center owner in negotiation of full or partial satisfaction of past and future rental and early termination of the lease. Other tenants simply turn off the lights, leave their furniture and equipment in the premises, and disappear. Critical to evaluating what to do with the personal property left in vacant leased premises is understanding the nature of that property and determining who has rights to it.
Fixtures v. Trade Fixtures
Almost every piece of property fits into one of two categories: real property or personal property. Real property includes land and items affixed to that land, like buildings and other improvements. Some items of personal property — for example, the materials needed to erect a building — become part of the real property as soon as they are affixed to that real property.
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