How to manage an abandoned rental property
It might seem logical that if a tenant has abandoned a property, you should be entitled to enter the property and prepare it for re-leasing. Unfortunately, the process isn’t that simple.
A rental agreement is a legal contract between two parties (the tenant and the lessor, which might be a landlord or a property agency on behalf of a landlord), which means that even if one party has abandoned their obligations, the other party must still conduct themselves legally and appropriately. As such, abandoned rental properties in Queensland are to be handled according to section 277 of the RTRA Act, which is the section that governs the way that any and all rental agreements are ended.
While all of section 277 of the RTRA covers how a residential tenancy agreement ends, section 277(5)(b) specifically covers abandoned property with the follow provisions:
(5) A residential tenancy agreement ends—
(a) if a tribunal makes an order terminating the agreement; or
1 See chapter 5 , part 1 , division 6 for the making of termination orders by the tribunal.
Therefore, if a lessor (i.e. a landlord or a property manager) has grounds to believe that a property has been abandoned, they should follow the steps as outlined in Chapter 5, Part 1, Division 8 of the RTRA.
First step: Determining abandonment
In order to initiate the process of declaring a rental property abandoned, the instigating party (i.e. the lessor) must believe that the property has actually been abandoned, based on the following ‘reasonable grounds’ outlined in the legislation:
(a) a failure of the tenant to pay rent under the agreement;
(b) the presence at the premises of uncollected mail, newspapers or other material;
(c) reports from neighbours of the tenant or from other persons indicating the tenant has abandoned the premises;
(d) the absence of household goods at the premises;
(e) the disconnection of services (including gas, electricity and telephone) to the premises;
(f) a failure of the tenant to respond to an entry notice.
Once the lessor has determined that the property is likely abandoned, they can begin the process serving an abandonment termination notice.
Second step: Giving notice to the tenant
Under the RTRA, you are required to give notice to the tenant if you believe that they have abandoned the premises (this is an abandonment termination notice). You can download an abandonment termination notice from the Queensland Residential Tenancies Authority (RTA) on their website. The tenant then has 7 days to respond to that notice. If they fail to do so, the property is then considered abandoned.
If the tenant refutes the abandonment, the matter is then generally taken up by QCAT (the Queensland Civil and Administrative Tribunal). This will generally result in a decision where the property is declared abandoned, or not abandoned. For the sake of this post, however, let’s say that that there is no dispute, and the property is declared abandoned. What happens next?
Third step: Managing abandoned personal property
Once the rental property is declared abandoned, the process of emptying and preparing the premises for a new tenant can begin.
Best practice in these situations is to make a comprehensive inventory of all of the items left behind, preferably with photographs as evidence of how the items were stored. This should be as detailed as possible (i.e. three shirts, two pairs of jeans instead of just ‘clothes’). Any identifying information for goods (such as serial numbers or ID information, whether manufacturer issued or otherwise) should also be noted. Please note that personal documents and money are to be handled separately to general household effects.
These goods can then be sold, provided that:
- The goods are worth a total of less than $1,500
- Storing the goods would be unhealthy or unsafe, or would cause the value of the stored goods to depreciate significantly
- Removing/restoring the goods would cost more than the proceeds from selling the goods would generate.
Note: Any cash or personal documents that cannot be returned directly to the previous tenant must also be handed over to the Office of the Public Trustee within 7 days of the lessor being given permission to access the abandoned property.
Any items that don’t fall within these categories should be stored for up to one month, during which time the previous tenant may apply in writing to take ownership of these goods. If they remain unclaimed, the person managing the abandoned property may sell the goods at auction, or contact QCAT for advice on how to either sell or dispose of the property. If the owner does claim them, then the lessor can invoice the previous tenant for costs associated with removing and storing the property (please note that they cannot claim for any other costs associated with abandoning the property, such as overdue rent).
Note that if the goods are to be sold at auction, then an advertisement must be made in the local newspaper with a description of the goods, as well as the details of the auction.
Once the goods are sold, the lessor may keep a certain amount of the money collected to cover their costs associated with managing the abandoned property (such as cleaning and storage costs for the abandoned property, for example). Any remaining funds must be paid to the Office of the Public Trustee within 10 days of the sale. Note that failure to appropriately handle abandoned property can result in the lessor being fined 40 penalty units (around $5,300 as of September 2020), so it’s crucial that property is handled properly and according to the legislation.
The abandonment of a property places the lessor into an incredibly vulnerable position wherein they are now responsible for managing out the removal of abandoned property, and unfortunately it can be a slow process to navigate. A good property management agency will be able to alleviate some of this stress by not only managing all of the filing with the appropriate bodies, but also by having established processes and contractors (such as for cleaning and storage), that will make the process go more smoothly. It may not be possible to protect yourself against all possible outcomes, but your life can be made easier by knowing the next step when things go wrong.