The case of General Motors UK Ltd v The Manchester Ship Canal Company Ltd concerned a licence agreement which allowed General Motors to discharge surface water into the canal for a modest annual fee of £50.
Beware the tenant booby trap
Tread carefully when dealing with an outgoing tenant’s possessions.
As a landlord, recovering possession of your property from a troublesome tenant is often a cause for celebration. But those celebrations can come to a shuddering halt when you walk into your property and find that your ex-tenant has not bothered to remove his possessions. Either he intends to return to the property to collect these possessions or, in the case of a canny tenant, he has provocatively dumped a problem on your lap to cause some grief.
Your initial thought may be “if you leave them, I bin them”.
But, as always, the law likes to create surprises for the unwary. Although it may defy common sense, if you find yourself involuntarily in possession of a third party’s possessions, you owe certain duties of care to the owner of those possessions. In a nutshell, one of those duties is to ensure that you do not damage or destroy the possessions.
Putting this into context, if you are faced with a tenant who has not bothered to remove his possessions from the property, you cannot simply cart the possessions off to the tip. So what do you do?
Firstly, you must give the outgoing tenant an opportunity to come and collect the possessions. This is all very well if you have contact details for the outgoing tenant. But more often than not, a tenant who has been repossessed will simply disappear into the ether.
In those circumstances, you will fulfil your duty to the tenant by posting a notice at the property warning the tenant that the goods will be disposed of if they are not collected within a specified time period. It goes without saying that, in reality, the tenant is highly unlikely to return to the property to check whether a notice has been posted on the front door. Nevertheless, by posting this notice, you will protect yourself.
If the possessions are not then collected by the tenant within the specified time period, you can safely dispose of those possessions that have no intrinsic value, and sell those possessions that do have some value.
And this is where we come across another aspect of the law that many would say makes little or no sense.
If you sell the possessions, you must account to the tenant for the sale proceeds (although you are entitled to deduct from those proceeds the costs associated with selling the goods, such as auction fees). Yes, that is right. Not only do you have to spend time selling the goods, you also have to deliver an envelope of cash to the tenant (with or without a ‘thank you’ card).
The reality is of course in that in many cases, the possessions in question will have no intrinsic value. In that case they can be disposed of (having first given the tenant an opportunity to collect them). Similarly, it will often be very difficult to trace a tenant in order to provide him with the balance of the sale proceeds achieved from the sale of the goods. In that scenario, provided that you have made reasonable efforts to trace and contact the tenant, you will be entitled to retain the sale proceeds.
In the recent case of Campbell –v- Redstone Mortgages Limited, the Court ruled that a mortgagee that had become an involuntary custodian of a borrower’s goods (the borrower having been evicted) was under an obligation to do what was “right and reasonable in the particular circumstances”. In that case, the mortgagee disposed of the borrower’s goods, having first posted a notice at the property warning that the goods would be disposed of if they were not collected within 7 days. The Court held that, given the varied nature of the goods, the fact that they had no intrinsic value, and the fact that there was a substantial mortgage debt, it was appropriate for the mortgagee to dispose of the goods rather than put them into storage or to seek to sell them. The borrower’s claim for damages was therefore kicked out.
So the guidance to take from this case is that, provided you act reasonably and give your tenant an opportunity to collect his goods (rather than immediately ordering a skip), you will be protected.
Furthermore, if you have sold the goods and have been unable to trace the tenant, you can safely retain the sale proceeds. Small comfort perhaps but at least you may have something to put towards the redecoration of the property.
If you have any queries about issues raised in this article or in relation to any other landlord and tenant matters, please contact Andrew Turner on 01242 574244 or by email firstname.lastname@example.org