Furniture, Fixtures, and Equipment (FF&E)

Hello tenants and landlords, I am here to discuss “furniture, fixtures and equipment”, also known as “FF&E”. I am Jenna Zebrowski the attorney behind LawByJZ.com. FF&E is something tenant uses in the ordinary course of its business operations.

It’s personal property that can be swapped out or upgraded, like desks, computers, kitchen equipment or shelves for inventory. It belongs to Tenant- or it should. Tenant should decide what to take and leave behind at the end of the commercial lease term, not the Landlord, so be sure your commercial real estate lease doesn’t say something different!

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Commercial Real Estate Case Study

Furniture, Fixtures and Equipment (FF&E): What Moves and What Doesn’t

Austin’s company had a complicated inventory system and lots of shelves to hold the products as a result. The system worked well for a really long time, but new products came along and a new system was designed. When Austin’s company moved, it installed a new inventory system in a new location, and when the lease in the old location expired, they didn’t renew it.

Furniture, fixtures and equipment, or FF&E, are items that are not permanently attached to the location and are used in the course of business, such as desks, computers, shelves or chairs.  These are usually fairly easy to remove and belong to the tenant.  If it’s attached, like carpet, countertops or an air conditioning unit, it’s not movable, and it’s not FF&E and it belongs to the location, not necessarily the person that paid for itor installed it.

Austin’s company could remove the shelving units and to repair the damage that was caused by the removal or could leave the shelve behind for the next tenant. Austin’s company did the math and decided that it would be less expensive for them to abandon the shelves then it would be to remove them and to pay for the cost of repairs, especially since there was going to be a new tenant that was going to remodel the space anyway. 

Austin’s company later received a bill from the old landlord for the cost of removing the shelves. They hired an attorney to review their situation, and learned that they were protected under their lease. The attorney had negotiated into the lease that the company could either remove the shelving and repair the damage, as the landlord had requested, or abandon the shelveswhich would become the landlord’s property.  Then, the landlord could sell the shelves or let the new tenant use them, but Austin’s company wasn’t responsible for the shelves anymore. 

Austin’s company didn’t know it at the time, but it was important that they negotiated in their lease the ability to make choices that worked best for their company. They didn’t know their fixtures would become obsolete, or that someone else could use them, but they had control over them and could make the best decision for the company at the end of the lease term.