Handling a Tenant's Abandoned Property When the Tenant Owes You Money

Take care before selling property a tenant has left behind in a rental unit.

Dealing with a tenant’s abandoned belongings is always bothersome, but it can be downright complicated when the tenant owes you money. If a tenant owes you back rent or money for damage done to the rental unit, you may be inclined to take or sell any property of value that’s left behind -- and worry about finding the tenant later. But that’s a risky course to take in many states, even if you have a court judgment stating what the tenant owes.

Some states do allow you to keep or sell abandoned property if the tenant owes you money. In legal terms, you have an “automatic lien” on your tenants’ belongings. This differs from the normal lien process -- which involves formally recording your claim (your lien) against the tenant’s property, then “getting in line” in case others have filed ahead of you.

Guidelines for Taking or Selling Abandoned Property

If your state statute gives you a lien on your tenant’s property, we advise you to use it very carefully, following these guidelines.

Use caution when seizing consumer or other goods that may not be paid for.  If your tenant  has financed a stereo, TV, sofa, or computer  and is paying in installments, the merchant  has a lien that’s ahead of yours. This is called  a “superior” lien -- meaning that the merchant,  not you, has first claim to the item when  the tenant stops paying. (Not surprisingly,  the tenant  will typically stop payments after  abandoning  the item.)

You can’t simply  seize and sell an abandoned item that is not paid off. Instead, you  must surrender the item if the merchant  comes to collect it. If you’ve already sold  the item, you may have to pay the merchant  the balance due or the value of the item. You  can try to avoid this result by publicizing  your intent to seize and sell the item, asexplained  below.

Follow your state’s rules for publicizing your lien.  Many states require a landlord to post notices  in newspapers announcing the intent to sell  an item abandoned by a tenant. This is to make sure others -- like the merchantsmentioned above -- who have superior liens  on a tenant’s property don’t lose out when  you jump ahead of them and take or sell  the item. Merchants are presumed to read  the legal notices; failure to do so may result  in the merchants’ losing their right to assert  the superiority of their lien. It’s a good idea  to publicize the sale of a tenant’s valuable  abandoned property even if your statute  doesn’t require it.

Don’t seize items that are necessary for basic living.  Many states that give landlords an automatic  lien will exclude certain items from your grasp. These may include belongings such as  season-appropriate clothing, blankets, tools, and  things needed for a minor child’s education. If you’re not sure whether an  item is a tool of your ex-tenant’s trade or simply  supports the tenant’s hobby, don’t take it.

Watch out for out-of-date laws allowing “distress” or “distraint.”  These were medieval procedures that allowed a landlord who was owed money, after or even during the tenancy, to simply grab his tenant’s possessions. In the words of one judge, it “allowed a man to be his own avenger.” A few states still have laws like these on the books, however courts have either ruled them unconstitutional or added so many safeguards (notice, a hearing, and so on) that the original process is unrecognizable.

If you encounter a distress or distraint statute when reading your state’s laws, resist the temptation to follow it without first learning -- through legal research or talking to your landlords’ association or lawyer -- how modern landlords comply.

Finding Your State’s Law

To find out whether your state has rules about liens, you’ll need to look up the law yourself or get professional help.

Doing your own research.  To find out what laws your state has on the books, see  State Laws on Handling Abandoned Property. There, you’ll find the statute numbers you’ll need to look up. If you don’t find a statute covering liens, there’s one more step to take. In most states with lien statutes, courts have stepped in with additional requirements, such as providing notice and an opportunity for the tenant to be heard. That means you should find and read any cases that have interpreted your state’s lien law. (For tips, see the  Legal Research  section on Nolo.com.)

Contacting a landlords’ association.  You can often get good information and advice by talking with other landlords. You may want to search online for your local or state rental property associations. One place to begin your search is the  National Apartment Association, an organization whose members include many state associations. Also, the  National Multifamily Housing Council  offers many opportunities for networking and information sharing.

Getting a lawyer’s help.  A qualified lawyer  can help you find and understand the rules that apply to your situation. You can search for an experienced landlord-tenant attorney using  Nolo’s Lawyer Directory.

Learn More

To learn the basics of how abandoned property laws work, see  Handling a Tenant’s Abandoned Property: An Overview.

To find out about giving notice to a tenant who has left belongings behind, see  Handling Tenant’s Abandoned Property: Legal Notice Requirements.

For more information about your rights and responsibilities as a landlord, see the  Landlords  section of Nolo.com.

This article was adapted from  Every Landlord’s Legal Guide, the most comprehensive and up-to-date legal and practical guide for residential landlords, by Marcia Stewart, Ralph Warner, and Janet Portman (Nolo).

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