Idaho Admin. Code r. 35.01.02.067 - REAL PROPERTY
Sections 63-3609, 63-3612, 63-3616, Idaho Code
01.
Real Property. For the
purpose of these rules, the term real property means land and improvements or
fixtures to the land. (3-31-22)
02.
Improvements or Fixtures. Improvements or fixtures to real
property include: (3-31-22)
a. Property which
is physically attached to the land or other improvements affixed to the land in
such a manner that it may not be removed without materially damaging the real
property or is of such a nature that it would normally be expected to be sold
together with the land. (3-31-22)
b. Property which increases the market value
of the land or increases the ability of the possessor of the land to use it
more productively. (3-31-22)
c.
Property which increases the market value or productivity on a relatively
permanent basis. (3-31-22)
03.
Three Factor Test. A three
(3) factor test may be applied to determine whether an article has become a
fixture to real property. The three (3) tests to be applied are: (3-31-22)
a. Annexation to the realty, either actual or
constructive. (3-31-22)
b. Adoption
or application to the use or purpose to which that part of the realty to which
it is connected is suitable. (3-31-22)
c. Intention to make the article a permanent
addition to the realty. (3-31-22)
04.
Example 1: The original
builder or owner of an apartment building installs draperies. The draperies
meet the three (3) factor test of a fixture to realty. First, they are
constructively annexed to the realty when attached to the drapery rod. Although
the draperies are not affixed to the realty, they comprise a necessary,
integral, or working part of the object to which they are attached. Second,
they appropriately adapt to the purpose of the realty to which they are
connected. Window coverings are necessary in order to maintain occupancy of the
apartment. The third and controlling factor in this example is the intention
with which the installation was made. The intention is determined from the
surrounding circumstances at the time of installation. It is not the
undisclosed purpose of the annexor, but rather the intention implied and
manifested by his act. The builders intended that the drapes would remain as
long as they served their purpose. (3-31-22)
05.
Example 2: The three (3)
factor test would not be met in Subsection
067.03 of this rule, if the
drapes were installed by a tenant of an apartment leased for a term with no
agreement as to ownership. The tenant would be expected to remove or sell the
drapes to an incoming tenant, and his intention would be the controlling
factor. The draperies would not be considered as fixtures to the real property.
(3-31-22)
06.
Personal
Property Incidental to the Sale of Real Property. This rule does not
affect the provisions of Section
63-3609(b), Idaho
Code. (3-31-22)
07.
Store
Fixtures. Store fixtures are items that are affixed to a building and
used by retailers in the conduct of their business. The term "store fixtures"
includes display cases, trophy cases, clothing racks, shelving, modular
displays, kiosks, wall cases, register stands, and check-out counters. If store
fixtures only benefit the particular business occupying a building, they are
not adapted to the use of the real estate and are therefore personal property.
A store fixture will only be deemed to be a real property improvement if:
(3-31-22)
a. It is affixed to the real estate
and its removal would cause significant structural damage to the building
itself; or (3-31-22)
b. It is
affixed to the real estate and is of benefit to the land or building regardless
of the particular business conducted on the premises.
(3-31-22)
08.
Fiber
Optic and Communication Cable. Fiber optic and communication cable
installed in a building is presumed to be a real property improvement.
(3-31-22)
Notes
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