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Revisions to Laws Covering Abandoned Inventories

California Civil Code

Section 1993 is the governing law that provides the process required before a commercial property landlord may dispose of an inventory of personal property left behind when a tenant either vacates commercial property premises or, alternatively, has been evicted from such premises.   The law provides that a landlord must serve one of two forms of a Notice of Right to Reclaim Abandoned Personal Property. The form of the notice depends on the estimated value of the total abandoned inventory.

Law through December 31, 2018 – Valuation of Inventory

If the total inventory was worth “less” than $750 or $1 per square foot of the premises occupied by the tenant, the landlord was able to dispose of the inventory after the service of an 18-day notice reiterating the tenant’s rights and their ability to claim the inventory.    
Unfortunately, if the total inventory was worth “more” than $750 or $1 per square foot of the premises occupied by the tenant, the landlord was required to serve the 18-day notice and then upon its expiration, schedule a public auction, publish notice of the auction in a newspaper and hold a public sale. This low dollar threshold created a significant expense to the landlord in terms of lost time and lost rent, in addition to the costs of the publication and auction. 
In conjunction with BOMA-OC’s Governmental Affairs Committee, Seide Law was able to assist the California Business Property Association in pushing through Assembly Bill 2847. They provided the industry lobbyists with numerous “real world” examples from our case files and provided input on revised wording for the proposed bill.

New Law effective January 1, 2019 – New Valuation of Inventory  

The new law increases the threshold calculation of the total resale value of the abandoned inventory from $750 to either $2,500 or an amount equal to one month’s rent for the premises the tenant occupied, whichever is greater. This change will greatly reduce the number of auctions that are required. This is a major victory for commercial property landlords. 
Please remember that the balance of California Civil Code, Section 1993 remains in effect. The only change is the threshold amount used in the valuation of the inventory. You are still required to serve the appropriate Notice of Right to Reclaim Abandoned Personal Property and wait the statutory number of days. When the notice period expires, you are required to follow the detailed procedure set forth in California Civil Code, Section 1993, taking the new dollar valuation threshold into consideration.

Shared with permission from author.

Richard L. Seide, Esq. and Ellen L. Ticknor