Not Holding on to a Tenant's Abandoned Property Could Cost You!

Your tenant has quit paying rent so you serve him a 3-day notice to “Quit or Pay Rent”. Low and behold he does you a favor by abandoning the property. You are ecstatic. What you thought might turn into 2 months or more of lost rental income has suddenly worked out in your favor. You plan to have your unit turned around and ready for rent by months end. As you enter the former tenant’s apartment you notice he left behind a lot of junk. You expect this, right? When a tenant behind on his rent decides to leave in a hurry, it is highly doubtful he will take the time to clean the place.

What do you do? When I was younger my father’s answer was simple. He would tell my brother and I to clean everything out, i.e., take it to the dumpster, then prep the place for painting. A simple solution to a common occurrence that we practiced routinely. That is, until the tenants learned how to bilk the system courtesy of public interest lawyers who fight for the rights and interest of those less fortunate. Ugh!

The unfortunate fact of the matter is, if a tenant abandons your property the law imposes upon you, the landlord, a duty to serve as the custodian of the tenant’s property. As custodian you are responsible for the safe keeping of the items the tenant left behind. This is referred to as bailment, which is defined as the process of placing personal property or goods in the temporary custody or control of another.

I know this is aggravating, but the law imposes upon the landlord a duty to care for the property and return it to the abandoning tenant. Failure to do so will result in the landlord owing the tenant for the value of the items left behind. I can tell you from first-hand experience that when this type of claim is brought, the tenant always left behind a 60 inch Plasma television, leather sofas, high end stereo systems, etc. – you should be catching my point that if you can’t prove what was abandoned, the tenant will stretch the truth to earn some quick cash from the unsuspecting and uninformed landlord.

How to Protect Yourself

Each state imposes by law a bailment that is set for a fixed term (usually 15 to 20 days). As the landlord, you must hold the abandoned tenant’s property for this fixed term in a reasonably secure area. If the abandoned tenant fails to return and reclaim his property by the end of the term you are free to dispose of it as you wish.

Here is a list of the general guidelines a landlord must follow with dealing with an abandoned tenant’s property:

Give the former tenant notice that states what the property is, where it can be claimed, how long they have to claim it, what will happen if it’s not claimed and how much it’ll cost for you to store it (you can be paid for your storage costs before the tenant can obtain his property).
When you enter the premises bring another person with you who can verify the property abandoned by the tenant. In some situations videoing the contents could prove useful if the former tenant later resurfaces and alleges you stole his valuables.
Hand deliver the notice to the tenant or mail it to his last known address.
If the property goes unclaimed and it is worth more than $300 you may have to sell the property at a public sale with competitive bidding (this requires publishing notice of the sale in a local newspaper). If it’s worth less than that amount, you can keep it or dispose of it in any way you like (throw it away).
If you sell the property at a public sale, the sale proceeds less your cost must be given to the treasurer of the county where the sale took place, and if it goes unclaimed for at least one year, you can claim that money.

As a landlord you will find that the law appears to favor tenants. This fact may be irksome to you, but it comes with the territory. If you are unsure of your legal obligations check with a local attorney and ask him what is required of you in a bailment situation and whether or not you can demand back rent in addition to costs before turning over the property should the tenant return.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.