If you’re in the process of buying a property, then you’ve probably heard or seen the term “vacant possession”. Vacant possession – or the lack of – has important bearings on your purchase or sale, so here’s what you need to know about it.
What is vacant possession?
“Sold with vacant possession” means that a property must be empty on the day of completion. No people – tenants or owners – and no possessions other than the ones you agreed on in the contract.
It might seem like a no-brainer that you, your tenants and your collection of glass chickens will have to be out of the building when the new owners move in, but it’s not always that simple.
The Standard Conditions of Sale in England and Wales allow for a property to be sold either with or without vacant possession. Without vacant possession usually means that there are tenants there whose agreement runs past the completion date; if you’re the buyer, you agree to buy with the tenants in the property at least temporarily.
What does “available with vacant possession” mean?
This means that the buyer is contractually obligated to make sure that there’ll be no tenants or personal belongings in the property on the day of completion.
What is the “expected date” of vacant possession?
If this date is included in your contracts, it means that date that the vendor has agreed with you that the property will be free of possessions, occupier or tenants and ready to move into. This agreed date has legal implications.
Buying or selling a property with tenants
This isn’t that unusual and your conveyancer can help you through the process as it can be different to vacant possession transactions. The main differences are:
– Your vendor must disclose the active tenancy agreements and any documentation relating to the tenancy. You can then, alongside your conveyancer, review these documents and discuss things further with your vendor, and
– If you’re happy with the situation, your purchase will go ahead and you’ll become the landlord in the tenancy agreement, although it’s best to be on the safe side and have the tenancy documents changed and re-signed.
Buying a property with vacant possession
If you’re buying with vacant possession, then the vendor has agreed with you to leave the property free of possessions and residents by the completion date.
You usually exchange contracts a week or so before completion date and the owners or residents will usually stay in the property up until completion date at the latest.
Sometimes you might be buying a house with vacant possession which involves tenants – in this case the owner has agreed to guarantee that the tenants will be out of the property by completion date.
Selling a property with vacant possession
If you’re selling a property with vacant possession then you’ll agree with your buyer that you’ll remove any personal effects and people by completion day. This becomes a legal obligation once contracts are exchanged.
You’ll be in breach of your contract if you or any of your possessions, unless you’ve agreed to leave some for your buyers, aren’t gone by completion day. If you’ve left rubbish or unwanted furniture behind your buyer can make a claim against you. If you have tenants in the property, it’s your responsibility to make sure that they and their possessions are gone by completion day or there could be a delay or a claim.
Are there any potential problems with vacant possession?
While most property purchases and sales go smoothly once exchange of contracts has occurred, things can still go wrong.
Most sales go through smoothly, but things can go wrong occasionally.
Very rarely, the tenants of a house with vacant possession might refuse to leave or might not get around to removing their possessions (which is why you should check and why you should end the tenancy a couple of weeks before completion date).
It may also be the case that the owner can’t move in time because there’s a delay or a failure in their own property purchase. You can make a claim here, as you’re protected by the contract, but in many instances, you can make a new agreement to give the owners more time.
