This article was originally written for and published by the Alberta Residential Landlord Association Rental Gazette Newsletter.
This is the second article in the two part series relating to abandoned units. Previously, the focus was on the legal obligations with regard to tenancies ending by reason of tenant abandonment. This article focuses on abandoned goods and makes the assumption abandonment has occurred.
Sometimes tenants leave premises without notice and without removing any or all of their personal possessions. The Residential Tenancies Act, SA 2004, c R-17.1 (“Act”) speaks with this issue at section 31 and imposes certain obligations on landlords.
There are a few scenarios that require consideration.
Goods Worth Less than $2,000
First, if there are reasonable grounds to conclude the goods are worth less than the prescribed amounts, they may be disposed of. The term “prescribed” means the amount is set by regulation. In this case, Residential Tenancies Ministerial Regulation, Alta Reg 211/2004 (“Regulation”) sets this amount. It is currently $2,000 (per s 5(1) of the Regulation). So, if the items left behind (or, abandoned goods) are worth less than $2,000, they can simply be disposed of. There are requirements in terms of the record which a landlord must keep when disposing of items which is addressed below.
Goods Worth more than $2000 but Unsanitary, Unsafe or Depreciating in Storage
Second, even if it appears the items are worth $2,000 or more, there are some reasons why a landlord may sell those goods by a means and for a price which is reasonable instead of storing them. The circumstances include if it would be unsanitary or unsafe to store the goods or their storage would rapidly result in total or substantial depreciation of them. An example of this might be when the goods are infested by a pest (cockroaches or bed bugs). It is unclear when the storage of items would rapidly result in total or substantial depreciation of them and the writer is unaware of a written decision which offers guidance. If seeking to rely on this provision it is likely best to seek specific legal advice regarding the same. Again, landlords must maintain a record in relation to these abandoned goods as discussed below.
Goods Worth more than $2000 but will cost more than $2000 to Remove and Store
Another circumstance when goods worth more than $2,000 might not be stored is when the cost of removing, storing and selling them (in accordance with the procedure outlined before) would exceed the proceeds of their sale. So, a landlord is not required to spend more to deal with the goods than it could reasonably expect to recover. The landlord must still maintain the record as required under the Act and set out below.
Goods that must be Stored
If neither of the above applies then a landlord is required to store (or arrange for storage of) the abandoned goods until the expiration of the prescribed period. Currently, the prescribed period is 30 days under the Regulation. Once 30 days have passed, the landlord can hold a public auction for the goods or if a court order has been obtained, by private sale. Again, in this case there are records which must be kept which are addressed below.
If a public auction is held and there is no bid made for the items, they can be disposed of. The Act does not explicitly address what should happen if there is a private sale but the items are not sold so any order from the court should contemplate what will happen in that case.
Tenant comes to claim Stored Goods
If a tenant comes looking for abandoned goods within the 30 day period then the landlord must give up possession of the goods, but only after the “proper” costs of removing and storing those goods. The language in the Act is “proper” which can be taken to mean they should be reasonable.
Goods are Sold
If the landlord sells the goods then the landlord can apply the proceeds of the sale but if and only if they satisfy the requirements in the Regulations and then pay the surplus to the Minister. That process is too lengthy to cover in this article but is set out at section 6 of the Regulations and involves submitting affidavit evidence to both the former tenant and the Director of Residential Tenancies.
If any funds are remitted to the Minister then the Minister must deal with them in accordance with the Act but these matters are outside the scope of this article (and of no concern for a landlord’s operations).
*Records Requirements *
Landlords are required to keep a record of the following for a period of 3 years from the time the goods were returned to the tenant, sold or disposed of (whichever applies):
- A description of the goods;
- The period of time they were in storage;
- Where they were stored;
- If the landlord requires payment from a tenant for removal and storage of items before returning them to the tenant then the landlord must record how much was claimed and when the goods were returned to the tenant;
- If the goods are sold then details about the sale;
- If the landlord applies the proceeds of sale of the goods to the cost of removing and storing goods or to satisfy other monies owed by the tenant in accordance with the Regulations relating to “Establishing tenant’s liabilities” then the amount the landlord claimed and any amount paid to the Minister;
- If the goods were not returned to the tenant and they were not sold then information about the manner in which they were disposed of.
Generally speaking, these are the obligations which landlords must meet with when dealing with abandoned property. Some of these requirements (such as the records requirements) are onerous but they provide safeguards to tenants and the court will be eager to enforce them against a landlord who does not follow them. A great way to ensure this is always done is to develop a policy complete with forms which make abandoned goods straightforward and simple. Landlords and property managers are busy enough and any efficiency which can be found will be welcome.
This column constitutes legal information only and should not be construed as legal advice. Consult with your legal counsel to receive legal advice which is specific to your situation.∎
If you have questions or would like advice, reach out to our Real Estate Team.
This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.