It’s a common problem — you run a shop that repairs phones and have a pile of older phones which have never been collected, even after you repaired them.

They’re taking up space and you were never paid for the jobs — can you just sell the phones and keep the money? Or maybe you agreed to hold goods for a particular customer, and they never came back to get them. What are you allowed to do with that property?

It may be surprising, but just because goods have been left for an extended period of time doesn’t automatically give you the right to do anything with them. Don’t worry though, there are steps you can take which will allow you to get rid of that abandoned property once and for all.

So before you go running off the Cash Converters or put items up for sale on eBay, read on to discover when you can and can’t sell those abandoned goods.

When are Goods Uncollected?

Before you are allowed to do anything with items that have been left with you, they must be considered ‘uncollected’ by law. Once they are legally uncollected, you will have the right to sell, keep or destroy that property as you see fit.

Goods are uncollected if there is an agreement for the owner to collect the property at a certain time or within a particular period but they fail to do so. If the possessor was required to deliver them to the owner, they are uncollected if the possessor is unable to deliver them after making a reasonable attempt.

In the absence of any agreement, goods are not uncollected until the possessor gives a written request to the owner requiring them to collect the property within seven days. If the owner fails to comply with the request, they are then uncollected.

What Disposal Rights do you have?

So you can sell uncollected items straight away, right? Not quite. You must wait for a specific time period, dependent on their market value, from when the property is considered uncollected before you can sell, destroy or keep them.

For goods valued at less than $20, the waiting period is one week. Where they are valued between $20 and $500, the waiting period is one month. If they are valued over $500, the waiting period is three months. For perishable items, there is no waiting period.

Once the required period has elapsed, you are then free to deal with the goods as you please, unless they have are of higher value. Property valued over $500 and personal effects must be disposed of by public auction rather than by private sale.

Proceeds of Sale

Now, after all that work selling, all the proceeds of sale are yours to enjoy, right? Wrong. You may only keep from the proceeds your reasonable costs in storing, maintaining and selling the goods. If you have a lien over the items (for instance, any unpaid amount for the repairs you made), you may also keep that amount.

After your portion has been taken out, the balance of the proceeds is payable to the ACT Government, who will put the funds into a trust bank account. These funds will be held to pay the original owner of the property, or, if they do not come forward within three years, may be used for another purpose.

Importantly for your protection, once goods have been sold in accordance with the above procedure, the original owner cannot come after you for selling their abandoned property. The purchaser will acquire full title free of any outside interest, so long as they were unaware of other interests at the time of purchase.

Might be time to update your terms and conditions?

If you are in the storage, repair or any other business where you are likely to be receiving property from customers and holding them for a time, ensure your terms and conditions include a clause dealing with abandoned goods, as this will lessen the administrative burden on you. Remember, before you get those dollar signs in your eyes, you still need to cover off on all legal bases.

If you need help updating your terms and conditions to allow you to sell those unwanted, uncollected goods, or need some assistance determining exactly what you can do with some property in your possession, contact our Corporate and Commercial Team today.

For more information contact the Corporate and Commercial Team:

Nicholas Scotton — Associate
(02) 6279 4444
nicholas.scotton@mvlawyers.com.au