Abandoned Property – What Property Managers Need to Know

Journal, Property Management,  Property Managers

In this article, we review the procedural requirements under the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRA Act) when a property has been abandoned by a tenant.

Property managers will of course be aware that a residential tenancy agreement can only end in a way mentioned in section 277 of the RTRA Act, including if the tenant abandons the premises (section 277(5)(b)).

Terminating an Abandoned Tenancy

If a property manager believes on reasonable grounds that a property has been abandoned by the tenant, the lessor may give a notice (Abandonment Termination Notice) to the tenant terminating the tenancy agreement. Pursuant to section 355(5) of the RTRA Act, ‘reasonable grounds’ include the following:

1. a failure to pay rent;

2. uncollected mail, newspapers and other material at the property;

3. reports from neighbours or other persons that the tenant has abandoned the property;

4. the absence of household goods at the property;

5. the disconnection of services including gas, electricity or telephone services;

6. the failure by the tenant to respond to an entry notice.

In the event that the property manager is satisfied on reasonable grounds that the property has been abandoned, instructions should be sought from the lessor to issue a Form 15 – Abandonment Termination Notice.

Pursuant to section 356 of the RTRA Act, the tenant may apply to the Queensland Civil and Administrative Tribunal (QCAT) if they dispute the Form 15. The tenant has seven days after the Form 15 was given to apply to QCAT seeking an order to set aside the notice, and 28 days after the Form 15 was given to apply to QCAT seeking compensation.

If the Form 15 is issued and within seven days of receipt the tenant does not take any action under section 356 to dispute it, the tenant is deemed to have abandoned the premises.

An alternative option to issuing a Form 15 is to apply to QCAT seeking an order about abandonment pursuant to section 357 of the RTRA Act. If an order is sought by the lessor, QCAT will consider the same grounds outlined above, along with anything else it considers relevant, in order to determine whether the tenant has abandoned the property. If an order is made by QCAT, the tenant is taken to have abandoned the premises on the date stated in the order. Applying to QCAT for an order under section 357 can often avoid future disputes if there is some doubt about whether the property has been abandoned.

Property managers should note that if QCAT makes an order that the property was abandoned by the tenant in accordance with section 357 of the RTRA Act, it may also make orders pursuant to section 360 requiring the tenant to pay the lessor an amount it considers appropriate as compensation for any loss (including loss of rent) or expense incurred as a result of the abandonment.

If the tenancy agreement is terminated by the issuing of a Form 15, the lessor may apply to QCAT under section 359 of the RTRA Act for compensation from the tenant for any losses that may have been incurred as a result of the abandonment, including loss of rent.

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SEE ALSO: How to retain your good tenants

Abandoned Goods

If the tenant has left any goods behind at the property (excluding personal documents or money), section 363 of the RTRA Act prescribes how the goods are to be dealt with.

Before disposing of any goods (or even moving any goods), we recommend that a detailed inventory be compiled. The inventory should note every single item left at the property, which may be owned by the tenant, no matter how insignificant. The inventory should be signed and dated, kept on file and be supported by comprehensive photographic evidence. The photographs should also note the date upon which they were taken. In addition, all model and serial numbers of any items left at the property should be recorded in writing along with the general condition of all goods.

Section 363(2) of the RTRA Act provides that the lessor may sell the goods, or dispose of them in another way, if the lessor believes, on reasonable grounds, that the goods:

  1. Have a market value of less than $1,500;[1] or
  2. Storage of the goods would be unhealthy or unsafe, or would cause the market value of the goods to be completely or substantially depreciated; or
  3. The cost of removing, storing and selling the goods would be more than the proceeds of the sale of the goods.

If the goods do not fall within the above categories, they must be safely stored for a period of one month.[2] The former tenant may claim possession of the goods (in writing) prior to the disposal of the goods, in which case the lessor may claim the reasonable cost of removing and storing the goods (section 363(7)). If the former tenant does not claim the goods within one month, the lessor may sell the goods at auction or apply to QCAT for orders to deal with the sale or disposal of the goods (section 363(4)).

Are the goods going to be sold at auction? If yes, the lessor must provide notice of the auction by publishing a notice in a newspaper which is circulated in the general area of the property. The notice must provide a description of the goods, and the date, time and location of the auction. The auction must take place at least seven days after the notice is published.[3]

In an instance where the goods are sold in accordance with the RTRA Act, the lessor may retain out of the sale proceeds the reasonable costs of removing, storing and selling the goods.  Any remaining proceeds must be paid to the Public Trustee within 10 days after the sale (section 363(8)).

Conclusion

In circumstances where a tenant has abandoned a property, it’s more than likely this will cause significant concern and stress for a lessor. As a matter of best practice, it’s important property managers implement proper procedures to handle such situations and minimise any loss incurred by the lessor.

Property managers should also be aware that the maximum penalty for a failure to deal with abandoned goods in the manner prescribed by the RTRA Act is 40 penalty units (currently $5,338). It’s also possible that complaints could be made to the Residential Tenancies Authority if the correct procedures under the RTRA Act are not followed.

References:

[1] See section 26 of the Residential Tenancies and Rooming Accommodation Regulation 2009.

[2] See section 28 of the Residential Tenancies and Rooming Accommodation Regulation 2009.

[3] See section 29 of the Residential Tenancies and Rooming Accommodation Regulation 2009.

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