What You Can Legally Do with Uncollected Goods?

What is bailment?

Bailment happens when someone (called the bailor) hands over goods to someone else (the bailee) for safekeeping, repair, or storage, with the idea that they’ll get them back later. Everyday examples include:

• A customer leaves their car with you for repair.
• A tenant leaves items behind after moving out.
• A neighbour asks you to look after their lawnmower.

If you’re the bailee, you don’t own the goods -but you do have a legal duty of care to look after them. The exact level of care depends on the situation:

• If you’re being paid to look after or store the item (e.g. as part of your business), the duty is high.
• If the item was left without your consent, you’re what’s called an involuntary bailee. You still have some duties -but the law is more lenient.

So, if you run a garage and a customer abandons their car, your duty of care is greater than if someone just dumped a broken-down car on your land without permission.

What is the Torts (Interference with Goods) Act 1977 (The Act)?

The Act gives a clear legal route to deal with goods that have been abandoned or left uncollected. The most useful part for business owners is Section 12, which sets out a process for getting rid of the goods legally and safely. You can use this process if:

• The customer fails to collect the goods.
• You can’t trace the customer, despite trying.
• You want to end your duty to look after the goods.

The law even applies in tricky cases -like when a tenant leaves furniture behind or a customer disappears without paying.

How do you get rid of uncollected goods legally?

You can sell or dispose of the goods, but only if you follow the proper steps. There are two types of notices you may need to give under the Act:

• Part I Notice - tells the customer to collect their goods.
• Part II Notice - warns that you plan to sell or dispose of the goods if they don’t.

What must a Part I Notice include?

• The customer’s name and address.
• A clear description of the goods.
• Where the goods are being held.
• The amount owed (if any).
• A statement that the goods are ready for collection.

You can hand it to the customer, leave it at their address, or send it by post.

What must a Part II Notice include?

• Your name and address.
• A description of the goods and where they are.
• The proposed date of sale or disposal (you must give at least 3 months’ notice if money is owed).
• The amount owed by the customer (if any).

This notice must be sent by recorded delivery or registered post.

You can combine both notices, but if you do, you must follow the stricter Part II rules (i.e. recorded delivery and full statutory information).

Can you sell the goods?

Yes, but only after the notices have been properly served and the deadline has passed. You can:

• Sell the goods (e.g. at auction). Make sure you keep evidence you have got a reasonable sale price.
• Deduct reasonable costs (like storage or sale fees).
• Keep the amount you’re owed.
• Return any extra money to the owner (if they ever come back) - as such this isn’t just a windfall for you. Keep any proceeds of sale for a reasonable period just in case the owner surfaces.

If you skip the notice process or there’s a dispute over what you’re owed, you cannot just sell the goods. Doing so risks being sued for conversion, which is a legal claim for wrongly disposing of someone else’s property.

What if you can’t find the owner?

The best solution here is to prevent the problem arising.  Always take various contact details from your customers, and, in particular, a physical address, as you will see that the Part II notice needs to be sent by recorded delivery or registered post. A mobile number or email on their own often won’t be good enough. You must make reasonable efforts to trace the owner before taking action. This might include:

• Contacting the owner by whatever methods which actually are available to you, and keeping records that you have done so (e.g. text, telephone, WhatsApp, Snapchat, Instagram, X, LinkedIn etc etc)
• Checking your records for a physical address.
• Internet searches or social media.
• Using tracing agents.
• Advertising in local papers or online.
• Putting up a modified version of the relevant notice on the goods themselves and/or at your premises.

Only if you can prove you did everything reasonable in the circumstances, but still couldn’t find the owner, can you move ahead with disposal.

What if you don’t know who owns the goods?

You need to find out who the legal owner is. That might not be the person who left the goods.

For example, if a customer leaves a car with you, but it’s on finance, the finance company is probably the legal owner, not the customer. In these cases, you may need legal advice before acting.

A recent case

In a recent High Court (HC) case, a bank had safety deposit boxes left unopened for up to 122 years. Some owners had died, and their families were untraceable. The HC’s decision was in two parts:

• For items stored after 1978, so the Act applied. The bank had taken reasonable steps to trace the owners and could legally sell the contents.
• For older items, held before the Act came into existence, the court still gave permission to sell, saying the owners were clearly untraceable despite fair attempts, and the bank had acted reasonably and fairly.

This case is important because it shows the courts will try to support businesses that follow the proper legal steps even decades later. So, when you have goods which appear to have been abandoned, we advise the following steps:

• Make all reasonable efforts to establish who the owner is and to contact them.  Keep records of all attempts.
• Serve the correct notice or notices under the Act.
• Wait the required time (a minimum of 3 months if you are owed money).
• Sell/dispose of the goods.  Only destroy them if you have evidence they have good evidence they have no value.  If you are selling them, acquire and keep evidence you have obtained a reasonable price.
• After having done so, and paid yourself what you are reasonably owed, be aware that the owner could come back at any point and legally demand the balance.

Common mistakes to avoid

• Throwing goods away without giving proper notice.
• Selling goods when there’s a dispute regarding payment.
• Failing to make real efforts to trace the owner.
• Assuming your customer is the legal owner.

Conclusion 

Abandoned goods are a common problem for small business owners, but there is a legal, fair, and safe way to deal with them. By using the Act, sending the correct notices, and keeping good records, you can avoid being sued and get your space (and sanity) back. If in doubt, get advice before acting. A little effort up front can save you a big legal headache later.