Can You Legally Remove Unpaid Goods From Your Business Premises In NZ?

It’s a situation most small businesses will run into at some point: a customer (or another business) leaves goods on your premises, doesn’t pay, and you’re left thinking, “Can I just remove them? Can I keep them until they pay? Or am I about to step into a legal mess?”

When unpaid stock, equipment, vehicles, or “job items” are sitting in your workshop, warehouse, café backroom or retail space, it feels practical to take matters into your own hands.

But the rules around removing, holding or dealing with unpaid goods in New Zealand aren’t as simple as “possession is nine-tenths of the law”. If you remove, sell, dispose of, or refuse to return goods without a clear legal basis, you could expose your business to claims (and sometimes criminal allegations) even when you’re the one owed money.

Below, we break down how dealing with unpaid goods works from a business owner’s perspective, what you should do instead of “self-help”, and how to set up your contracts so you’re protected from day one.

What Does “Unpaid Goods Removal” Mean In Practice?

People use the phrase unpaid goods removal to describe a few different scenarios, for example:

• A customer leaves goods with you (eg, a mechanic has a car, a repairer has a phone, a printer has signage) and then doesn’t pay to collect them.
• You supplied goods (eg, stock, materials, equipment) and the buyer hasn’t paid, and you want to go and retrieve them.
• Goods are on your site (eg, a contractor’s tools or materials left after a job) and there’s a payment dispute.
• You’re a landlord or occupier and a tenant or customer has left property behind, and you want it gone.

Each situation involves different legal concepts. That’s why the “right” answer depends on the relationship and the paperwork (if any).

As a general rule, New Zealand law doesn’t love businesses taking unilateral action with someone else’s property. If you need to enforce a debt or resolve a dispute, there are usually steps you should take first.

Can You Legally Remove Or Keep Unpaid Goods On Your Premises?

Sometimes you can. Sometimes you can’t. The key question is:

Do you have a legal right to retain, repossess, or dispose of the goods?

There are a few common pathways a business might rely on.

1) If The Goods Were Left With You (You’re Holding Them)

If a customer leaves goods with you (for repair, storage, manufacturing, installation, cleaning, or another service), you may be holding those goods as a “bailee” (someone temporarily in possession of goods that belong to someone else).

In these situations, you generally should not assume you can:

• sell the goods to recover your invoice
• dispose of the goods because they’re “abandoned”
• refuse to return the goods indefinitely

Even if you have helpful wording in your terms, a contract clause on its own won’t always make it lawful to sell or dump someone else’s property. In New Zealand, there is a statutory process that often applies to uncollected goods held by bailees (including notice requirements and limits on how sale proceeds are handled) under the Contract and Commercial Law Act 2017 (which replaced the old “uncollected goods” provisions in the Sale of Goods Act).

Separately, some industries and fact patterns may also involve a recognised lien or other statutory right, but that will depend on the details.

In practice, the safest approach is to have written terms that deal with:

• storage fees after a certain date
• how long you’ll hold goods after non-payment
• the notice steps you’ll follow before any sale or disposal (where legally permitted)
• how any sale proceeds will be applied (debt first, remainder to the owner)

This is one reason why having solid Terms of Trade matters even for “hands-on” businesses like trades, repairs, and manufacturing.

2) If You Supplied The Goods And Want To Go And Retrieve Them

If you supplied goods to a buyer and they haven’t paid, you can’t automatically go onto their premises and remove the goods. Doing so can create serious legal risk (including trespass and conversion claims).

Your ability to repossess will depend on things like:

• whether you have a retention of title clause (sometimes called “ROT”)
• whether that interest is properly protected under the Personal Property Securities Act 1999 (PPSA) (including registering on the PPSR in time)
• what your contract says about default, repossession, and access
• whether the goods have been on-sold or mixed into other products

Even if you have a right to repossess on paper (and the interest is properly protected), the way you enforce it needs to be handled carefully. Enforcement can be restricted in practice if it involves trespass, a “breach of the peace”, or disputable entry-so it’s often safer to get advice (or a court-backed pathway) rather than assuming you can just show up and collect the goods.

3) If The Goods Are On Your Premises But The Relationship Is Unclear

Sometimes goods are left behind accidentally (or deliberately) and there’s no clear contract. For example:

• a former supplier leaves pallets, bins, or equipment on-site
• a contractor leaves tools and later there’s a payment dispute
• a customer drops off goods and disappears

These scenarios are where dealing with unpaid goods gets tricky, because your legal rights depend heavily on evidence of ownership, communications, and whether the goods were truly abandoned.

Before you do anything irreversible, you’ll usually want to take a “pause and document” approach: confirm who owns the goods, what agreement applies, and what notices you’ve given (and, where relevant, whether the statutory “uncollected goods” process applies).

When Unpaid Goods Removal Becomes Risky (And Why “Self-Help” Can Backfire)

It’s completely understandable to feel frustrated when you’re not paid. But removing or holding goods without a clear right can put your business on the back foot.

Here are the big legal risks we often see.

Trespass (Entering Someone Else’s Property To Retrieve Goods)

If you go onto the other party’s site to take goods back (even goods you supplied), you could be trespassing unless you have permission or a clear contractual right of entry that can actually be exercised in the circumstances.

A “right of entry” clause doesn’t mean you can force your way in. How you exercise any access right matters.

Conversion (Wrongfully Dealing With Someone Else’s Goods)

Conversion is a civil claim that can arise where you treat someone else’s goods as your own. Selling, disposing of, damaging, or refusing to return goods can potentially trigger this kind of claim.

Even if you’re owed money, it doesn’t automatically give you a right to “take it out of the goods”.

Criminal Allegations (Theft-Adjacent Situations)

Many business owners are surprised by how quickly a dispute can become framed as “they stole my property” (even if you strongly disagree).

We’re not saying every dispute becomes criminal. But if you remove goods from someone else’s premises or refuse to return goods without a clear basis, you may find yourself dealing with police reports, reputational damage, or urgent demands.

Consumer Law And Fair Dealing Issues

If the other party is a consumer (not a business), your communications and enforcement behaviour should be especially careful. While debt enforcement isn’t “advertising”, your overall conduct can still create regulatory risk if it is misleading or aggressive.

As a baseline, make sure your standard documents and messaging are consistent with the Fair Trading Act 1986 (misleading/deceptive conduct) and the Consumer Guarantees Act 1993 (where applicable).

How To Protect Yourself Upfront: Contracts, Security Interests, And Better Payment Controls

The best way to avoid stressful unpaid goods scenarios is to set your business up so you have clear, enforceable rights before anything goes wrong.

Here are the key tools to consider.

Strong Terms Of Trade (Including Storage, Default, And Enforcement)

Your terms can do a lot of heavy lifting, including:

• payment terms and due dates
• late payment interest and recovery costs
• storage fees for uncollected goods
• when you can stop work for non-payment
• clear notice procedures before any sale/disposal, aligned with what the law allows (including any relevant requirements under the Contract and Commercial Law Act 2017)

For many SMEs, well-drafted Terms of Trade are the difference between a manageable debt issue and an expensive dispute.

Retention Of Title And PPSA Registration

If you supply goods on credit, a retention of title clause can be a valuable protection. But to be effective against other creditors (and in insolvency scenarios), you often need to properly protect your interest under the PPSA.

This is where businesses commonly get caught out: they have “ROT wording” in an invoice template, but they don’t take the steps needed to make it enforceable in the situations where it matters most.

Security Interests And Credit Support

If you’re supplying significant value (stock, equipment, high-value materials), you might consider stronger credit protections, such as a security interest or other credit support arrangements.

Depending on the deal, this could involve documentation like a General Security Agreement (commonly used to secure payment obligations against a debtor’s assets).

This isn’t right for every small business transaction, but it can be a game-changer when you’re exposed to larger invoices.

Debt Collection Pathways (With The Right Paperwork)

Sometimes the best “removal” strategy is not touching the goods at all, and instead moving quickly on recovery.

That can involve:

• formal letters of demand
• negotiated payment plans
• Disputes Tribunal (where appropriate)
• District Court proceedings (for larger matters)

If recurring late payment is affecting your cashflow, you might also want a structured Debt collection agreement arrangement in place, so the process is consistent and compliant.

And if you’re looking to tighten up your systems generally, it’s worth building a process around deposits, milestones, and clear invoicing to reduce disputes (this is often more effective than “tougher” enforcement after the fact). A practical place to start is reviewing how you’re ensuring your clients pay from the beginning of the relationship.

A Step-By-Step Approach To Handling Unpaid Goods (Without Creating More Risk)

If you’re already dealing with unpaid goods on-site or you’re considering removing unpaid goods from someone else’s premises, here’s a practical process to follow.

1) Identify What Legal Relationship Applies

Ask:

• Did you supply the goods, or are you holding the goods?
• Is the other party a consumer or another business?
• Do you have signed terms, a quote, an order form, or email agreement?

Even a basic written agreement can clarify ownership and enforcement rights. If you’re unsure whether you have an enforceable contract, the principles under the Contract and Commercial Law Act 2017 may be relevant, and it’s often worth getting advice before escalating.

2) Check Your Contract Terms (And Don’t Assume They Say What You Think)

Look specifically for clauses about:

• when payment is due
• what happens on default
• retention of title (if you supplied goods)
• storage fees and what happens if goods are uncollected (including any notice process you must follow)
• dispute resolution
• recovery costs (legal fees, collection fees)

If there’s a major dispute brewing, this is also where you may need to consider whether what happens when someone breaks a contract applies to your situation (because the remedies and next steps depend on the breach and your terms).

3) Gather Evidence And Keep Everything In Writing

Before you take action, pull together:

• invoices and statements
• quotes/work orders
• delivery dockets / proof of delivery
• photos of the goods and their condition
• email/SMS history (especially any admission of the debt)

Clear records are your best friend if the matter ends up in the Disputes Tribunal or you need to justify why you held goods or charged storage fees.

4) Send A Clear Notice (And Give A Reasonable Deadline)

In many cases, the best next step is a written notice that:

• states what is owing and what it relates to
• sets a payment deadline
• explains what you will do if payment isn’t made (but only where you have the legal right and will follow any required notice process)
• offers a practical option (eg, payment plan, collection appointment)

This can help resolve the situation without drama, and it shows you acted reasonably if things escalate later.

5) Avoid Selling Or Disposing Of Goods Without Advice

Even if you’re confident the other party has “abandoned” the goods, selling or disposing of them is usually the highest-risk move.

If you do this incorrectly, you may end up owing the other party money (or damages) even though they never paid you in the first place.

Where you think disposal is necessary (eg, storage is unsafe, goods are perishable, or you cannot operate with the goods on-site), it’s worth getting tailored advice first-particularly because there may be specific statutory steps (including notice and timing) you need to follow.

6) Consider A Formal Debt Recovery Or Contract Exit Strategy

Sometimes the real issue is that the commercial relationship has broken down, and you need to draw a line under it.

Depending on the circumstances, you may need a clean way to end the arrangement (and preserve your rights), which is where understanding terminating a contract can become relevant.

And if the dispute is going nowhere, formal recovery pathways (letters of demand, Disputes Tribunal, or court) may be safer than physically dealing with the goods.

Key Takeaways

• Removing or dealing with unpaid goods isn’t automatically legal just because you’re owed money; your rights depend on ownership, possession, and your contract terms.
• If goods are left with you, be careful about holding, selling, or disposing of them unless you have a clear legal basis and you’ve followed the correct process (which may include notice requirements under the Contract and Commercial Law Act 2017 for uncollected goods).
• If you supplied the goods, you generally can’t just enter the buyer’s premises and take them back; repossession rights often depend on retention of title clauses, PPSA protections, and careful (lawful) enforcement.
• Unilateral action can create real risk, including trespass, conversion, and escalated disputes that cost more than the original invoice.
• Strong Terms of Trade, clear payment processes, and (where appropriate) security documents like a General Security Agreement can protect your business from day one.
• If you’re unsure, the safest move is usually to pause, document, give written notice, and get advice before you remove, sell, or dispose of any goods.

If you’d like help with contract terms, debt recovery options, or setting up stronger legal protections around unpaid invoices and goods, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.