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Personal Property Disposition

by Kiyam Poulson
Druckman Law Group PLLC  – USFN Member (NY)

Personal property disposition remains a hot topic in the eviction industry. We’ve all heard the stories concerning the “Rolex” watch or the “Picasso” painting that was left behind after an eviction. The question remains: how best to protect the lender against claims for such property? Some states require a personal property eviction to dispose of the personal property, and still others do not. 

New York law does not require a personal property eviction to dispose of personal property. Even if the real property is discovered to be vacant, but personal belongings were left behind, the sheriff (or marshal) will still proceed to lockout. 

After a lockout is completed, New York law mandates that ordinary chattels belonging to a former homeowner, and left on the premises after removal or eviction, are not abandoned. It is the duty of the lender to notify the former homeowner to remove the personal property; and if it is not removed, to cause its removal. The law implies an obligation on the part of the former homeowner to reimburse the lender for the reasonable cost of removal. 

In some instances, agreements to vacate by a specified date are entered into with the borrowers. In these cases, it is beneficial for the lender to make sure the terms of the agreement include language stating that any personal property left after the borrower vacates is viewed as trash and will be disposed of. In New York, this agreement, once entered in the court, will protect the lender when personal property is involved.

Eviction vs. Legal Possession
In cases where no agreement is entered, the distinction is between an eviction and a legal possession. In an eviction, both the former homeowner and his personal property are removed from the premises. On the other hand, in a legal possession, the former homeowner is removed from the premises, and his property remains under the care and control of the lender as bailee for the former homeowner. The sheriff is required to perform whichever service is requested by the lender and may not restrict itself to conducting legal possessions only.

If the lender indicates that it desires mere possession of the property rather than having the premises delivered to it in broom-clean condition, upon giving possession of the former homeowner’s premises to the lender, the lender or his representative must endorse the back of the warrant as follows: “Possession of the [former homeowner’s] premises with the contents intact is hereby acknowledged. The [lender] accepts responsibility for all of the property on the premises, releases the sheriff/marshal from any liability, and agrees to save the sheriff/marshal harmless from any action resulting from the enforcement of this warrant.”]

In all situations where the sheriff and the mover have access to the former homeowner’s premises at the same time, and the homeowner’s property is to be removed, a sheriff must remain on the premises until all property has been removed and secured in the moving van. This rule applies whether the sheriff performs an eviction or a legal possession. Under no circumstances shall the former homeowner’s property ever be permitted to remain on the sidewalk.

If the lender has requested a legal possession and no property is being removed, a sheriff must remain until the lender has possession of the premises. A lender has possession of the premises when the sheriff has secured the premises by changing the locks, or has them changed under his direction and in his presence.

Where a lender has requested a full eviction (e.g., possession of premises in broom-clean condition), the cost of removing the former homeowner’s property and its delivery to a bonded warehouse must be borne by the lender.

Inventories
The sheriff is required to prepare a written inventory of all items contained in the premises of the former homeowner being evicted. The inventory shall be prepared regardless of whether an eviction or a legal possession is conducted. The inventory must be complete and accurate, giving a description of all appliances, household furniture, goods, and properties present. Both the quantity and condition of the personal property must be noted.

The full name of the former homeowner must be present on all inventories. The inventory form needs to be dated, and signed by the sheriff, the lender (or his representative), and, whenever feasible, the former homeowner. The inventory form used should have a specially designated place for each of the above-mentioned signatures. A copy of this inventory must be provided to the former homeowner at the time of the eviction, whether or not it is specifically requested. If the former homeowner is not present, the sheriff must make a copy of the inventory available to the former homeowner upon request. Whenever electronic equipment such as stereos, televisions, appliances, and the like are inventoried, the make, model, and, where possible, the serial number must be recorded on the inventory. The sheriff should take extra care to ensure that the carton count is correct and legible. Numbers, rather than hash marks, are to be used in reflecting the quantity of cartons inventoried. If no cartons are prepared, indicate “zero” in the quantity column.

All valuables (e.g., money, jewelry, and negotiable instruments) should be inventoried even when the items are small enough to fit into a carton. Any valuables which, in the sheriff’s opinion, need to be safeguarded should also be inventoried. The inventory should reflect that the valuables are being safeguarded. To protect these items, the sheriff should deposit them in a safe place in his office. The items should be properly tagged for identification, and the former homeowner should be notified as to the location of the valuables. It is recommended that the sheriff keep an accurate record of his attempts to notify the former homeowner.

Inventoried items that are carried away by a former homeowner or his representative should also be noted on the inventory form. The former homeowner’s signature should be present on the inventory as a release authorization. Any property that is inventoried but not removed (for example a washing machine) should be noted as such on the inventory.

If a sheriff finds cash, he must leave it in the custody of the local police precinct. If this is not possible, the sheriff should keep the money in a secure place in his office. If any contraband such as drugs or guns is found, the local police precinct must be contacted.

If the real property is completely vacant, a sheriff must still prepare an inventory form indicating that the inventoried property contained no personal property.

Final Dos and Don’ts
These articles are not to be removed from the premises until after a lockout: food; groceries, including canned goods and packaged food; dishes encrusted with food particles; any fixture so attached to the realty that its removal will cause damage to the realty; rugs and wall-to-wall carpets that are firmly affixed to the floor; and linoleum or tiles.

If the former homeowner is present during the eviction or legal possession, it is important that he be informed that he may remove any personal property or valuables. A list of what he removes should be made. If a third party appears during the process, identifies himself as a friend, relative, or neighbor and asks to remove certain property, a sheriff must not release any property until he is satisfied that the person has the authority to take the property. A list of the articles removed is to be prepared by the sheriff with the person’s full name, address, and signature.

Personal property disposition can lead to a multitude of problems if handled improperly in the state of New York and elsewhere. Lenders will benefit in consulting legal counsel in the jurisdiction concerning the proper measures to be taken.

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