Commercial landlords & uncollected goods

Abstract

This article explores the position of commercial landlords with unwanted possession of uncollected goods. Part I considers when this is likely to be of commercial significance, and identifies that a tenant’s failure to remove goods from the premises is only likely to cause significant losses to the landlord when at least two parties other than the landlord assert competing interests in the goods. In such circumstances, at least one of the parties claiming an interest in the goods is likely to be a secured party under the Personal Property Securities Act 2009 (Cth) ('PPSA'). The article then explores whether the landlord is likely to be protected against its unwanted storage costs in such circumstances, and how this will turn upon whether its lease contains a clause conferring it with rights in goods left on the premises — termed an 'uncollected goods clause'. Part II contends that the effect of such a clause will often be to confer the landlord with a property interest in the goods that will almost always rank below a PPSA security interest. Part III contends that where no such clause is contained in the lease, the landlord is likely to be protected by an equitable lien and also, in some jurisdictions, by uncollected goods legislation. The article concludes that in some circumstances landlords can better protect themselves against the costs of unwanted possession of goods by omitting uncollected goods clauses from their leases.