My tenant moved out and left its junk behind. Now what?

     Imagine a situation where a burglar breaks into your home and “borrows” some of your possessions without paying for them. On the way out, the burglar drops its wallet on your kitchen floor. Instead of returning the wallet to the burglar, you immediately throw it in the trash. Do you think that you should have to compensate the burglar for failing to notify before throwing the wallet away? 

 

     Of course you shouldn’t. But, if you were a landlord and the burglar was your tenant, and you had a lease to allow the tenant to “borrow” your space in exchange for paying rent, the analogy might have a different conclusion.   That’s because New Jersey has a Tenant Abandoned Property Act (N.J.S.A 2A:18-72 et al.) (the “Act”), which permits a landlord of commercial or residential property to dispose of any tangible goods, chattels or other personal property left upon a premises by a tenant, but the landlord must reasonably believe under the circumstances that the tenant has left the property upon the premises with no intention of asserting any further claim to the premises or the property and the landlord must put the tenant on notice that the property will be disposed if not timely claimed.  An exception is made for perishable items, which the landlord may freely dispose in order to maintain the premises in a sanitary condition.  

 

 

     In this tough economic climate, landlords are facing an increasing number of defaults both from residential and commercial tenants alike. While the causes of default can range from the non-payment of rent to the breach of a covenant of the lease, the ultimate goal of the landlord is usually to recoup most (if not all) of the back rent due and fees accrued, recapture the premises from the tenant, and (hopefully) relet the space to a new tenant. Problems arise when a tenant abandons the premises surreptitiously and without providing a forwarding address.  Aside from the monetary implications, the landlord is saddled with the responsibility of disposing of the tenant’s property. 

     Understandably, the primary concern of any landlord is getting paid. But the handling, care, and disposal of a tenant’s possessions is governed by statute and a landlord faces consequences if it does not follow the procedures prescribed by the Act. In this situation, a landlord is entitled to enter the premises and collect the property and possessions and left behind by the tenant. However, before the landlord can sell them or otherwise dispose, the landlord must provide written notice to the tenant as required by the Act. The Act has very stringent notice requirements which can subject the landlord to monetary liability if not followed.   Under the Act, a landlord is also required to store the possessions for a period of time at the tenant’s expense. The landlord must exercise reasonable care for the property and depending upon the circumstances may be best served by procuring a commercial storage unit to store the possessions. As you can imagine, this is a source of added aggravation for the landlord especially if it is required to front the costs of the storage in hope of recouping it from the tenant. 

     Under the Act, before a landlord of a residential or commercial property can consider disposing of property abandoned by the tenant, the Act requires that one of the following has occurred: (1) a warrant for removal has been executed and possession of the premises has been restored to the landlord or (2) the tenant has given written notice that he or she is voluntarily relinquishing possession of the premises. Either option poses difficulties for the landlord. In most instances, a tenant abandons a property and thus does not provide the written notice contemplated by the Act; therefore, a landlord is required to file an action in court to recapture the premises and will undoubtedly incur additional expenses that may or may not ultimately be recovered from the defaulting tenant.

     Commercial landlords, however, have a silver lining. The provisions of the Act will not apply to the disposal of tenant property left on non-residential rental property if there is a lease in effect which has been duly executed by all parties and said lease contains specific terms and conditions for the disposal of tenant property. In other words, a landlord of non-residential property can essentially bypass the grasp of the Act by tackling the disposal of tenant property in an abandonment head-on in the underlying lease agreement. 

     Landlords of all non-residential property should re-visit their lease agreements to insure that not only do they provide for the landlord’s ability to reclaim the premises in the event of an abandonment, but also contain detailed provisions specifying how the tenant’s property will be disposed if the premises are abandoned.