When premises are let, there is often a written agreement that obliges the tenant to remove their goods at the end of the lease. It may also say what action a landlord can take with regard to any remaining goods.
In the absence of a written agreement, the landlord becomes custodian (bailee) of the former tenant’s goods left on the premises. Where the tenant is insolvent, the liquidator or administrator may not have the inclination or funds to remove the goods especially if they are bulky or require specialist equipment. The landlord, of course, will want the premises cleared so that they can be re-let.
There is a distinction between the duties owed by a voluntary as opposed to an involuntary bailee. A voluntary bailee who knowingly takes possession of another’s goods has a wider range of duties including the duty to take reasonable care of the goods. An involuntary bailee must not:
- Deliberately or recklessly damage or destroy the goods
- Hand over the goods to a third party without the owner’s authority
Being forced into the position of involuntary bailee can be a nuisance and expensive depending on the nature of the goods involved.
Provided the landlord can prove the tenant has abandoned the goods, the landlord can sell them. Notice should be given to the owner of the goods pursuant to Schedule 1 of the Torts (Interference with Goods) Act 1977 requiring them to be collected. The notice must state:
- Where the goods are held
- If the goods are to be sold, when and where the sale will take place
- Detail any sale/storage costs to be retained from the proceeds
- List those goods remaining at the premises
This notice should be displayed on the premises in a prominent position and sent to the former tenant. A reasonable time must be given for the goods to be collected. The more valuable the goods, the greater the obligation to make enquiries about the owner.
Provided all reasonable steps have been taken to contact the former tenant and no response is received, it is more likely the goods have been abandoned and the landlord can dispose of them.
Upon sale this must be at market value – disposal by auction will usually suffice. The proceeds should be retained for a reasonable period depending on the amount involved, the sale costs and all the circumstances.
The landlord should keep a careful record of all action taken including a detailed inventory and photographs of condition so that any subsequent proceedings claiming damages for conversion are capable of being defended.
A bailee can apply to the Court to supplement the bailee’s power of sale but in many cases the expense of this outweighs the value of the goods.
A purchaser of land can also find themselves in this position. The seller or a third party may have left goods upon the land. By way of example, the purchaser of former RAF Newton Nottinghamshire found a large arena stored in an unsecured hangar. The arena was not the property of the seller but a former occupier of the site, Robot Arenas Limited. The arena had been purchased following the end of the television series Robot Wars. The arena was stored on the site. Robot Arenas’ licence to occupy the hangar had ended but the arena remained. The purchaser informed the seller’s agent but heard nothing. A few weeks later he chose to dispose of the arena and scrapped it at a cost of £250. When Robot Arenas realised their arena had been scrapped they brought a claim for damages in excess of £300,000. The High Court decided that in all the circumstances the buyer was entitled to conclude no one had an interest in the goods. He had bought with vacant possession. He had given notice to the seller’s agent and upon hearing nothing after five weeks had decided to dispose of the goods. The situation would be different however had the buyer known the identity of the true owner which is very often the case where tenant’s goods are concerned.
Disclaimer: While we do all that is possible in terms of ensuring its accuracy, this blog contains general information only. Nothing in these pages constitutes legal advice. You need to consult a suitably qualified lawyer from the firm on any specific legal problem or matter.