Uncollected goods: what should landlords do upon termination of a retail lease?

This question arises in almost every retail lease matter involving rental arrears, termination and possession. The regime regarding uncollected goods is governed by the principles of bailment and by the Australian Consumer Law and Fair Trading Act 2012. The ACL stipulates three value categories of uncollected goods (low, medium, high) and outlines requirements for disposal of each category. 

Old laws gone

Under the old Landlord & Tenant Act (repealed in 2012) a landlord could remove, store, and eventually sell uncollected goods at public auction after 3 months. 

Despite the old remedy of ‘distress for rent’ being abolished in Victoria in 1948, a remarkable number of landlords mistakenly believe they are entitled to retain a tenant’s goods pending payment of outstanding rent. 

A landlord cannot enforce a possessory lien over a tenant’s goods to secure arrears of rent or other obligations of the tenant: Asian Pacific Building Corporation Pty Ltd v Sharon Lee Holdings Pty Ltd [2013] VSC 11 per Garde J at [16]. 

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The full article (1368 words) considers:

  • New provisions under the Australian Consumer Law and Fair Trading Act 2012

  • Bailment principles applicable

  • Uncollected goods 

  • Value categories of goods

  • Low-value goods under $200 

  • Medium-value goods $200 - $4999

  • High-value goods over $5000  

  • Title to goods 

  • Proceeds of sale from uncollected goods

  • Obligation to keep records from sale 

  • Tenant buildings and fixtures