Parts one, two and three covered how landlords obtain an eviction and judgment for damages resulting from a tenant’s breach of the lease. However, post-eviction, landlords frequently confront the problem of what to do with the personal property the tenant has left behind. This may include:
- office furniture and equipment;
- inventory or machinery;
- personal effects; or
- even just plain old junk.
Although the landlord has obtained possession of the premises via eviction, it does not become the legal owner of personal property left behind by the tenant.
While sheriffs will remove a tenant’s personal property in a residential foreclosure, that is unlikely in a commercial eviction. While the lease may provide a method for disposing of abandoned property, what constitutes abandonment is up to the judge. A landlord is therefore advised not to dispose of property where abandonment is completely clear, which will rarely occur.
This blog series’ second post recommends you obtain a pre-suit writ of distress as to the tenant’s valuable property. However, if you haven’t obtained a distress writ, you still have ample remedies for dealing with the tenant’s property. The primary method is via the Disposition of Personal Property Landlord and Tenant Act.
Disposition of Personal Property Landlord and Tenant Act
The Act applies to all commercial tenancies, as well as residential tenancies and mobile home tenancies where the landlord has obtained a writ of possession. The Act provides an “optional procedure for the disposition of personal property which remains on the premises after a tenancy has terminated or expired and the premises have been vacated by the tenant through eviction, surrender, abandonment, or otherwise.” The procedure for disposition of the tenant’s property provided in the Act is optional and, if the procedure is not followed, nothing in the Act affects the rights and liabilities of the landlord, former tenant, or any other person. The Act provides a form notice, informing the former tenant, or others who have rights to the property, of their rights to reclaim property that has been abandoned on the premises.
Limits of Liability
Personal property described in the notice can be left on the vacated premises or stored offsite for safekeeping. A landlord has a general duty to exercise reasonable care in storing the property. You aren’t liable to the tenant or other person for any loss unless it results from negligence or deliberate conduct.
The landlord is required to release the property listed in the notice to the former tenant or, at the landlord’s option, to a person reasonably believed to be the property owner, provided, however, that the tenant or owner reimburses the landlord for its reasonable costs of storing the property, provided that the tenant or owner takes possession no later than the date specified in the notice. When the notice indicates that a public sale of the property will take place, the tenant or owner of the property can still take possession before the sale, but is required to pay advertising and other costs the landlord has incurred in listing the property for sale.
Public Sale or Auctions
If the personal property is not claimed by the tenant or owner, it can be sold at public sale by competitive bidding. However, if a landlord reasonably believes the total value of the property is less than $500, it may retain the property for personal use or dispose of the property as it sees fit. You may not profit from the sale of the tenant’s property. Deduct the costs of storage, advertising, and sale. Then pay any balance of sale proceeds not claimed by the former tenant or the owner into the treasury of the county in which the sale took place. Don’t delay – pay these proceeds no later than 30 days after the sale.
If you release abandoned property to your former tenant, you are not liable to any person for the personal property. Also, you might release the abandoned property to a person you reasonably believe is the owner of the personal property. Even if they are not the tenant. In this case, you will not liable to the tenant or any other person. That’s so long as you have given that person notice of the release of the property.
The landlord will also not be liable to any person to whom notice was not given. That is unless that person proves that prior to releasing the property:
- you as landlord believed or reasonably should have believed that the person had an interest in the property; or
- you knew or should have known that person’s address.
When a landlord follows the dictates of the Act in selling the property, it will also be exempt from liability related to the sale of the property.