09 September, 2019
In the first of our series of practical guidance on common landlord problems, we look at how landlords should deal with goods and belongings such as furniture and stock (also known as chattels) which are left in the tenanted premises by outgoing tenants.
As a commercial landlord, you are likely to be faced with a property filled with the tenant's goods upon taking back possession of premises; be it upon expiry of the term, forfeiture or other lease termination. In these circumstances, the standard position is that chattels remain in the ownership of the tenant - and you are responsible for the chattels as an "involuntary bailee" - and must look after them.
Can I remove or sell the goods?
Unless the Lease provides for this, no. The temptation might be to bring in removal teams at the first opportunity to clear the premises in order to re-let, on the assumption that the goods have been abandoned. However, just because the former tenant might not have a right to store their goods at the premises, this doesn't automatically mean you may do with them what you wish. As a Landlord, you run the risk of a claim by former tenants for the value of their goods if this happens. Additionally, arguments over exactly what which chattels were left in the property, the condition of them and their value, can also arise - and be expensive to resolve.
So, what can I do?
Leases often contain specific provisions requiring tenants to remove their goods at the end of the lease and what a landlord can do if the tenant breaches this. Therefore, the first step is to consult the lease and take advice. In the absence of such provisions, you need to establish that the former tenant has abandoned the goods.
If the tenant owns the goods, you should serve a formal notice under Schedule 1 of the Torts (Interference with Goods) Act 1977 which requires the tenant to remove the chattels within a given timeframe. The notice should describe the chattels in question (attaching an inventory), detail where they are stored, offer times for collection and explain that the chattels will be sold and/or disposed of after that time frame has expired.
Case law suggests that the landlord must act reasonably in allowing opportunities for the former tenant to collect the chattels. The longer the former tenant is given to collect, the more likely the timeframe will be considered reasonable.
If the landlord receives no reply to this notice and has taken reasonable steps to get in contact with the former tenant then the chattels can be disposed of.
Can I charge the tenant storage?
If the goods are sold, you are permitted to deduct the cost of storage and sale from the proceeds of sale.
Can I keep the goods or the proceeds of sale if the tenant is in arrears of rent?
No, not unless the Lease says you can. In reality, if the tenant brought a claim for the proceeds, you could counter-claim for the rent arrears.
A few key tips:
For more information contact Stephen McArdle in our Dispute Resolution department via email or phone on 0333 207 1142. Alternatively send any question through to Forbes Solicitors via our online Contact Form.