At the termination of a lease, it is not uncommon for a landlord to find that their tenant has left behind their belongings. This can be especially inconvenient where the landlord needs the premises cleared, whether for re-letting, development or showing round prospective tenants.
Unfortunately, the solution is generally not as straightforward as simply disposing of the goods. In the absence of express terms confirming how the tenant’s goods will be dealt with following the lease’s termination, when the landlord comes into possession of goods belonging to the tenant, a relationship of involuntary bailment arises; the ‘bailor’ (i.e. the tenant) retains ownership of the goods, while the ‘bailee’ (i.e. the landlord) assumes responsibility for the goods’ safekeeping.
Obligations
Involuntary bailment is different to a true bailee/ bailor relationship in that the bailee has not consented to possessing the bailor’s goods. Despite this, involuntary bailees still owe the bailor some duties in relation to the goods. These duties vary from case to case but generally include:
- The duty to attempt to contact the tenant by a variety of mediums e.g. email, phone, fax or by a notice affixed to the premises;
- The duty to allow the rightful owner to collect the goods;
- The duty to treat the goods with reasonable care;
- The duty not to deliberately or recklessly damage or destroy the goods; and
- The duty not to give the goods to a third party without the owner’s authority.
Breaching these obligations, for example by disposing of goods that are not abandoned, may give rise to a claim in the tenant’s favour.
Practical steps to avoid becoming a bailee
If the landlord is concerned that the tenant may fail to remove their chattels at the expiry of the term, they should consider putting the tenant on notice that failure to do so would constitute continued occupation of the premises as a trespasser. The notice should demand possession on the expiry of the term and so warn the tenant that the landlord may be entitled to recover double value for the premises for that period of unlawful occupation. The risk of increased liability may incentivise the tenant to remove their goods before the lease expiry.
Disposing of left-behind goods
If, despite their best efforts, the landlord ends up a bailee and wishes to dispose of the goods, they must first establish that the goods have been abandoned.
In addition to the above steps, it is good practice to comply with the Torts (Interference with Goods) Act 1977. Under the Act, the landlord may gain some protection against liability for selling the goods if:
- They can reasonably satisfy themselves that the goods belong to the tenant; and
- Either –
- They have served notice that they intend to sell uncollected goods, in accordance with the procedure set out in the Act, and the tenant has not collected the goods within the specified timeframe; or
- They have taken reasonable measures to contact the tenant with the aim of delivering that notice but have failed to do so.
Where the landlord has taken all reasonable steps to notify the tenant, and still the tenant neglects to collect their belongings, it is reasonable to assume that the goods have been abandoned. The landlord will then be at liberty to dispose of the goods, whether by sale, destruction or gift.
If disposing of the goods by sale, for further protection the landlord should sell for proper value and account for any net profits to the tenant (or keep the proceeds for a reasonable length of time if unable to contact the tenant) and document all actions taken.
Further considerations
The landlord should be aware that chattels left by the tenant may belong to third parties, such as lenders under hire-purchase agreements. The landlord may therefore need to take additional steps to identify the goods’ true owner(s).
Remember to check the lease wording as most modern leases give the landlord the power to sell abandoned property. The process varies from lease to lease and must be followed.
Key points
- Even though the tenant has left goods behind, the landlord still has an obligation to take care of them.
- Abandoned items cannot simply be discarded but should be sold for proper value.
Some items might belong to a third party.