Your Questions… July 2013

In every issue of DeBrieF, we try to answer a few questions sent in by our readers.  This month, we’re focussing on Property…

Q: I am the freehold owner of a building that is used as a workshop.  Until recently, the building was occupied by an individual under a tenancy at will.  Suddenly, and without warning, the tenant vacated the building but left behind various tools.  He did not give any notice to me and has not left any forwarding address.  Rent was paid in cash and I have no official record or other means to trace the tenant.  I would like to try and recover the small amount of rent due and I want to get on with reletting the building.  What should I do about the tools?  They are bulky and I do not want the cost or responsibility of storing them.  I would prefer to sell them and keep the money as compensation for the lost rent.  Is this allowed?

A: A tenant is generally obliged to remove his or her belongings at the end of a lease and a lease will often specifically state this.  It is also common for a lease to clarify what the landlord can do with any items that may be left in the property.  In the absence of express terms in a lease, the belongings remain the tenant’s property and the landlord will be an “involuntary bailee”.  A person may become a bailee by voluntarily and knowingly taking possession of goods belonging to another.  A bailee has a wide range of duties, including the duty to take reasonable care of the goods.

It is often costly for the landlord to be left as involuntary bailee especially if the goods are bulky or valuable.  Unless you are prepared to store the tools indefinitely, you need to establish that the former tenant has abandoned them, so that you can sell them.  Until you have disposed of the tools, you must ensure that they are not damaged or destroyed deliberately or recklessly.  You should serve a notice on the tenant to come and collect the goods.  The notice should set out where the goods are kept, state when and where the sale will take place, if the goods are to be sold, state any sale and storage costs will be retained from the sale proceeds and also attach a schedule of the goods.  The notice should be sent to the former tenant, if its new contact details are known, and, in any event, attached to the premises in a place where it can be seen.

If all reasonable steps have been taken to contact the former tenant and he or she has declined to collect the tools, it is more reasonable to assume the goods have been abandoned and you would then be free to dispose of them.

Q: I am the buyer of a property, where the agreed purchase price is £250,000.  I have agreed that I will also pay the seller’s legal costs and the seller’s estate agent’s commission.  Will I have to include these costs when calculating my stamp duty land tax payment?

A: Stamp Duty Land Tax is paid by the buyer on the chargeable considerationThe basic rule is that chargeable consideration is any consideration given for the subject matter of the transaction.  The consideration may be given in money or money’s worth, including services, the satisfaction, release or assumption of debt or the provision of other land.  The consideration may be given directly or indirectly and it may be given by the buyer or a person connected with the buyer.  It is, therefore, likely that the seller’s legal costs and estate agent’s commission will be treated as chargeable consideration because you would not have agreed to pay these unless the seller was selling the property to you.  It is important to realise that the sums do not necessarily have to be expressed to be part of the “sale price” to form part of the chargeable consideration.

However, where the buyer is a tenant under a new lease (as the buyer of a new flat, for example, might be) and not a freehold house – a tenant’s obligation “to bear the landlord’s reasonable costs or expenses of or incidental to the grant of a lease” does not count as chargeable consideration.

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