Dealing with abandoned personal property
Even though many landlords have learned to pay attention to the legal requirements needed to remove a tenant who is unlawfully detaining a property, there are often more questions about what to do after the eviction than during the eviction. One particular concern that landlords must be aware of is dealing with abandoned personal property.
A property manager will be confronted with this problem more often that one might expect. Specifically, there are two instances when this will likely occur: end of the term of the lease and after execution of the Order of Restitution issued as part of an eviction. Most of the time items left behind in a rental unit are items that the tenant deemed undesirable and are therefore truly abandoned. Occasionally, especially when it occurs during an eviction, the items were left behind because the tenant was unable to remove all of their belongings.
Under Utah law there is a very specific process for disposing of abandoned property. The law does not make a distinction between worthless property that most landlords would consider garbage and the type of property which would be considered abandoned under the statute, so property managers should exercise reasonable judgment when dealing with cleaning up the premises.
Since many property managers will hire a maintenance crew to clean up apartments after a tenant has vacated, property managers should makes sure that this crew is supervised by someone familiar with the laws regarding abandoned property and should also provide training to the entire crew to make sure they document their work. This will help you avoid costly litigation initiated by a disgruntled tenant claiming that precious property was not handled in accordance with the law.
First, an inventory should be taken of all items abandoned by the tenant. This would include a written inventory but most importantly a photographic inventory. Take pictures of every room and its contents. This will also help you document any damages. If there are items of particular value, take individual pictures of those items to document their condition. With digital cameras available in virtually every cell phone this should be fairly easy to accomplish.
Second, make a determination of what you want to do with the items. Some things will clearly be garbage and may be thrown away. A property manager should be prudent and exercise reasonable judgment when determining what is garbage and what needs to be kept. Look to see if the item is broken, if it is piled with other waste or refuse. In the end it is a judgment call that landlords must make.
Finally, after distinguishing the garbage and disposing of it, you must store the rest in accordance with the law. Utah Code Ann. §78B-6-816 contains the requirements for dealing with property after the premises has been abandoned. A landlord is entitled to remove the property from the premises so that the property may be quickly re-rented, but the landlord must store the property and make reasonable efforts to notify the tenant of the location of the property. The property manager may recover actual moving and storage costs from the tenant for this effort.
After storing the property for 30 days, the landlord may dispose of the property in two ways: conduct a sale or donate the items to charity. A sale may be conducted if the tenant has made no reasonable effort to recover the property, including paying the storage and moving costs. Token efforts will not be enough, neither will showing up to the property and taking a few items every so often. The sale should be done in a commercially reasonable matter with efforts to make the public as well as the tenant aware of the sale. It is recommended that a landlord publish or post public notices as well as directly notifying the tenant at any email address, phone number, or the last known address. Sale proceeds may be applied to the moving and storage costs, but any excess beyond that may not be automatically applied to any other balance owing to the landlord. A property manager must comply with Utah Code Ann. §67-4a-2 with regard to this money or may seek to attach these funds through a landlord’s lien or judgment. An attorney should be consulted for further discussion on this point.
Utah Code Ann. §78B-6-812 governs how a sale of abandoned property is conducted after forceful removal in an eviction. The process is similar to that described above, but there are some particular differences to provide additional safeguards to the tenant. The landlord must do an inventory and that inventory must be delivered to the tenant immediately after the property has been removed from the premises.
The property must still be held for 30 days and if a sale is to occur a public sale is required by the statute. The landlord may sell the property if the tenant has failed to request a hearing, or failed to remove the items and pay the storage and moving costs. Prior to the sale, the landlord must mail the tenant written notice of the time and place of the sale. This notice must be mailed to the tenant’s last known address, but the landlord should use reasonable efforts to notify the tenant in addition to this.
If the tenant is present at the sale, then it is the tenant that determines the items that will be sold to satisfy the costs of moving and storing the property. Once that amount has been paid, the landlord must release the remainder of the property to the tenant if that is the tenant’s request. The landlord may only apply proceeds of the sale in excess of the moving and storage costs to a judgment if the tenant is not present at the sale and the landlord has obtained a judgment. Any surplus beyond the judgment must be handed over to the tenant. If the tenant cannot be located then the proceeds exceeding any judgment must be handled in accordance with Utah Code Ann. §67-4a-2. Of course, if the landlord has not obtained a judgment, then the landlord may not keep any money beyond the storage and moving costs. Please consult with an attorney for further discussion on this point.
A property manager or owner may donate items to charity as an alternative to conducting a sale, but only if the tenant has not requested a hearing, or has not paid the moving and storage costs, and the donation is commercially reasonable.
A landlord is not entitled to hold or sell property belonging to a person other than the tenant. Often times, tenants will rent their furniture or appliances from third party vendors. Once a third party has established its ownership of an item, a property manager must release the item immediately without demand for storage and moving costs. The key is to review the agreement between the tenant and the third party vendor to determine whether it is a rental agreement or a rent to own agreement. Sometimes it is worth a bit of a fight to get storage costs. It is also recommended that landlords do not fall for the trap of non-vendor third parties claiming property on behalf of the tenant. They must demonstrate ownership and you should question the validity of their claim.
On a final note, as discussed earlier there is no guidance in the statute for determining what is garbage and what must be kept. Many landlords will simply throw everything that they do not want away. This may not result in frequent problems or be a convenient alternative to compliance with the law since most tenants will not protest for one reason or another, but the one time it does not work will be very costly for you. This is especially true if you did not take an inventory or photographs. So at a minimum, photograph everything so that if a tenant claims you threw away priceless heirlooms you can show a judge the exact nature of these alleged valuables.
Using Stipulations to Expedite Your Unlawful Detainer Action
You have filed your Complaint for unlawful detainer and successfully served each of the tenants in possession of the premises. Your notices are appropriate and everything in your Complaint is supported by provisions of the law or a lease. At the end of the time for answering, one, multiple or all of the tenants submit an Answer. Now what do you do? Traditionally, at the time of filing your Complaint, a bond amount can be set and within a few days a bond can be posted. This is a very effective means of pressuring the tenants to simply vacate since many cannot match a landlord’s possession bond; however, it does require depositing hundreds if not thousands of dollars with the court for several weeks often turning into months and there is no guarantee a counter-bond will not be posted.
The changes to the unlawful detainer laws that have occurred within recent years have provided another option for further expediting the process: the hearing for immediate occupancy. At the hearing for immediate occupancy, the landlord can produce evidence of non-payment and request the court make a summary determination of who should have possession during the pendency of the unlawful detainer action. Usually, if there is rent owing, then the landlord will be given possession of the property within a few days of the hearing. Of course, this does not give you a Judgment and the landlord must either proceed with a costly and time consuming trial that typically writes off whatever may be owed. This process is also not available for evictions involving a breach of lease other than non-payment. An alternative that can provide the landlord with some repayment, possession, potentially a Judgment, and applies to all types of evictions is to negotiate a Stipulation to Entry of Judgment.
The Stipulation to Entry of Judgment is most effectively used after the tenants have answered when default is no longer available. Typically, the landlord has two types of bargaining chips: time or money. If the tenant is willing to pay money, most landlords are willing to give more time. The less the tenant is willing to pay, the quicker the landlord wants possession. The Stipulation allows the landlord to effectively use these bargaining chips to get the tenant to agree to concede to the two real goals of the unlawful detainer action: possession and judgment.
A tenant that is not paying rent or is in some other material breach of lease usually believes that they should be given more time to cure the default or to find an alternate property. This is the basic inducement to the tenant to enter into the Stipulation, but for the Stipulation to be effective in holding the tenant to performance, the Stipulation must be set up under the right circumstances and with the right terms. If a landlord enters into a Stipulation before filing the unlawful detainer action with the Court, then the landlord will create challenges to enforcement.
The Stipulation essentially becomes more or less an addendum to the lease if no unlawful detainer action is filed. The result is that the benefits of requesting quick and responsive enforcement through an Immediate Order of Restitution will not be available. The Stipulation is only able to provide its most unique and effective qualities after the complaint has been filed and after the tenants have answered.
The landlord should use the tenant’s desire to have more time and to make smaller incremental payments in exchange for the tenant waiving the more costly and time consuming defenses to possession and Judgment. In agreeing to give the tenant more time, the landlord should demand frequently repetitive performance or payment. In the Stipulations I prepare for my clients, I will structure the performance to accomplish my client’s goals of payment, possession or compliance. If payment is needed, then at the time the Stipulation is executed I require some kind of good faith payment and then weekly payments to be made at my office on a specific day. If a payment is missed then the landlord is entitled to an Immediate Order of Restitution. This pattern can be followed to allow the tenant to quickly work through any deficiency in performance while not surrendering the goal of the unlawful detainer.
The amount and frequency of the payments depends upon how much is owed. I typically seek to have the tenant in full compliance or vacated from the property within three to six weeks. Since the tenant has waived all defenses to a Judgment and an Immediate Order of Restitution, recovering possession is virtually immediate upon default of the Stipulation. If the tenant does satisfy the terms fully, then during the performance of the Stipulation the landlord is made partially or complete whole for back rents or other money owed and the additional costs of litigation are completely avoided.
In reality, many tenants enter into the agreement believing that it is another delay tactic or under the delusional belief that by some miracle it will all work out if they can just have a few more days. Landlords have heard all the stories: my boss held my paychecks but I got it coming now, I am talking with the bishop, I should have a new job next Monday, etc. The Stipulation allows the landlord to turn the tables on these tenants by playing against their manipulating intentions. The tenant will sign it, waiving all defenses and when they do not follow through they will find that the consequences of non-performance are swift and effective with little opportunity to obstruct or delay.
To have the described effect, your Stipulation must be properly prepared and it is prudent to consult with legal counsel before using a particular form in any given situation. If properly used in the right situations, a Stipulation can effectively cut costs and time on removing a tenant from a property and in obtaining a judgment. When a tenant fulfills the terms of the Stipulation, the landlord benefits by receiving payments to cover, in part or in whole, costs, rent, and attorney’s fees that otherwise would not have been recovered without a trial and lengthy collection efforts that typically yield poor results. I have used Stipulations in many evictions and have effectively resolved those cases in less time and with fewer fees for my clients. When given the chance, a tenant rarely refuses an opportunity to waive their right to a trial and to agree to an Immediate Order of Restitution in exchange for the remote possibility of getting their default cured.