I own commercial buildings and am a commercial landlord. I am often faced with tenants leaving property behind at the end of their leases. What are my rights and obligations in relation to that property?
Your rights and obligations will largely depend on the type(s) of property left in your premises and whether your lease includes an agreement with the tenant as to how that property is to be dealt with at lease end. If your lease is silent on this issue, the Property Law Act 2007 (PLA 07) will apply.
The property left in your premises will fall into one of three categories: landlord's fixtures, tenant's fixtures or chattels. Which category is a question of fact and depends on how the property has been attached to the premises (if at all) and why. If property has been attached to the premises so that it has become part of the structure of the premises or integral to the land, and the intention was that it would be permanently attached, it will be a landlord's fixture. If the property has been attached, but can be removed without irreparable damage to the premises and the intention was that it would only be temporarily attached (e.g. for the term of the Lease), then it is likely that it is a tenant's fixture. If the item of property is not fixed (i.e. is movable), then the property will be a chattel.
Landlord's fixtures become part of the land and ownership will pass to you. Tenant's fixtures can be removed by the tenant in accordance with any agreement contained in your lease; or, if there is no agreement, in accordance with the PLA 07. The PLA 07 allows a tenant to remove fixtures (other than landlord's fixtures) while in lawful possession of the premises (e.g. during the lease term) or during a "reasonable period" after ceasing to be in lawful possession (i.e. after the lease has come to an end). There is no definition of "reasonable period" in the PLA 07. As this period is unclear, caution should be exercised and you should consult your solicitor. If a tenant exercises a right to remove its fixtures, the PLA requires the tenant: cause as little damage as possible, make good any damage and compensate the landlord for any damage caused and for any other loss. If the tenant does not remove its fixtures in accordance with its lease or the PLA 07 (whichever applies), it will lose the right to do so and the fixtures will arguably become landlord's fixtures and can be dealt with accordingly i.e. as part of the land.
Tenant's chattels (movable items) do not vest in you. Some leases provide that if a tenant does not remove its chattels within a fixed period, the landlord will be entitled to remove them and leave them outside the premises, or even forward them to a refuse collection centre. Other leases require a landlord to remove and store the chattels (at the tenant's cost) until the tenant or other rightful owner (such as a secured party) collects them. You have certain duties while storing a tenant's property and you should contact your solicitor to discuss those duties.
Regardless of whether your lease or the PLA applies, it is prudent to search the Personal Property and Securities Register (PPSR) to identify whether any party has a security interest registered over any of the property remaining in the premises. The Personal Property Securities Act 1999 affords secured parties (for example: Banks and finance companies) certain rights in relation to secured property. Your solicitor should be able to assist you with a PPSR search and in determining whether any secured parties have any rights to that property and whether those parties should be contacted.
In summary, there are different rules for different types of property. You need to determine what type(s) of property have been left in your premises and whether your lease or the PLA 07 governs how you are to deal with that property.