Abandoned Goods in Tenanted Premises: Finders Keepers?
As finances continue to be stretched, landlords are increasingly having to deal with tenants abandoning their property. Whether it be residential or commercial property, at the conclusion of a tenancy, tenants sometimes leave items within a property which can cause problems for landlords.
It is a common misconception that if a tenant leaves goods behind, the landlord can dispose of them as they wish. Where a tenant does a moonlit flit owing money to the landlord, there is an understandable temptation upon a landlord, particularly if the tenant leaves behind valuable goods, to sell the goods to recover the landlord's losses.
Unfortunately, simply because a tenant vacates a property without removing all of its goods does not mean that the landlord can do with the goods as the landlord pleases. Title to the goods remains with the tenant and a landlord cannot withhold a tenant's belongings in lieu of an outstanding debt. If the tenant owes money to a landlord, a landlord must pursue a judgment through the Court.
Before taking any steps in relation to the goods, a landlord should ensure that the tenant has abandoned the property. It is not unheard of for a tenant, particularly in a residential context, to take an extended holiday without informing the landlord. He or she will not take kindly to returning to the property to find that the landlord has re-entered. Landlords should not rush into changing the locks to a property, especially when dealing with residential property, as they may be guilty of wrongful eviction, a civil wrong and a criminal act that could result in a substantial fine being imposed upon the landlord, imprisonment or both.
Assuming that a landlord validly retakes possession of a property, if any goods are found within the property, the Landlord becomes an "involuntary bailee" in respect of those goods and is under a legal obligation to safeguard those goods.
The goods may be removed from the property by the landlord provided that he stores them in a secure location. If there is interest in the property from third parties, storing the goods elsewhere will enable the landlord to re-let or sell the property with vacant possession. If the landlord is in no hurry re-let or sell the property, provided that the property is secure the goods can be left within the property, thereby avoiding storage costs.
A landlord will not want to store any goods left within a property indefinitely. However, if a landlord simply destroys the goods or sells them to a third party, then the owner of those goods may be entitled to compensation. The landlord, can, however, dispose of the goods as he sees fit if he can establish that the tenant has abandoned the goods. It is not enough for the landlord to rely upon the fact that the tenant has left the goods behind, rather the landlord must be able to show that the has been a wilful relinquishment of the goods by the tenant. The Torts (Interference with Goods) Act 1977 ("the Act") provides landlords with a means of doing just that.
Under the Act, a landlord can dispose of or otherwise sell goods left in a property if the landlord first serves Notice upon the tenant informing the tenant that the landlord intends to dispose of or sell the goods. The Notice, in addition to containing other prescribed information, must make clear to the tenant that the goods are available for collection. The Notice must provide the tenant with a reasonable period of time to collect the goods. What is reasonable will depend upon the goods in question and whether any monies are due and owing to the landlord and could be between 28 days and 3 months.
It may be that the goods do not belong to the tenant. If the landlord believes this may be the case and the landlord knows who the goods belong to, Notice should be served upon that third party. If the landlord is uncertain as to whom the goods belongs to, he should take appropriate steps to give notice to any third party who may own the goods that he intends to dispose of them. The steps to be taken will depend of the facts of the case but would include placing an appropriate notice upon the property so that it would come to the attention of any third party and placing a notice in a local or national publication. If a third party does come forward and claims title to the goods, evidence should be obtained of their ownership of the goods.
If all reasonable steps have been taken to contact the tenant and provide the tenant with a reasonable opportunity to collect the goods and the tenant fails to either collect the goods or express any intention to collect the goods, the landlord can at that stage reasonably assume that the goods have been abandoned and may then take steps to dispose or sell the goods.
Whether the landlord disposes of the goods by sending them to landfill, donating them to charity or selling them, will depend upon the nature and condition of the goods left behind. If the goods are to be sent to landfill or donated to charity, the landlord should ensure that he keeps a record of what is disposed of and why he saw fit to dispose of the goods in that manner. It is advisable to also have the goods valued by an independent valuer so as to provide the landlord with further evidence that the goods were of little to no value so as to enable the landlord to rebut a tenant's assertion that the goods were in fact of considerable value.
If the goods are to be sold, the landlord must ensure that the goods are sold for the best price that can be achieved. Usually the goods are sold at auction but if the goods are sold privately, before the goods are sold, it is advisable to have the goods valued by an independent valuer so as to provide the evidence that the goods were not sold at an undervalue.
Once the goods are sold, whilst any expenses incurred by the landlord arising from the goods being abandoned - storage costs, sale costs - can be deducted from the sale proceeds, the balance of the sale proceeds must be retained by the landlord and made available to the tenant. This is the case even if the tenant is indebted to the landlord for outstanding rent, service charge or other liabilities relating to the former tenancy.
Pre-emptive steps can be taken by the landlord at the beginning of a tenancy by adding a clauses within the tenancy agreement which sets out the steps a landlord will take in the event that goods are left in a property by a tenant. Nonetheless, given the present 'compensation culture', it is advisable to ensure that Notice is served on a tenant setting out the landlord's intention to dispose or otherwise sell the goodsRollits' property dispute resolution team, headed by partner Ralph Gilbert, has a wealth of experience in assisting Landlords with a wide variety of issues, including abandoned goods. If you have any contentious property related queries, please contact Ralph Gilbert, partner and head of the property dispute resolution group on 01482 323239 or firstname.lastname@example.org
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.