WHAT DOES VACANT POSSESSION MEAN? THE DEFINITION
David Barr
April 12th 2021
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What does vacant possession mean?
Can you sell without vacant possession?
Why is vacant possession important?
What about “available” with vacant possession & vacant possession “upon completion”
What is the “expected date” of vacant possession?
What does a buyer need to know?
What does a seller need to know?
Start your property portfolio today!
If you’ve ever gone through the process or are going through the process of buying or selling a home you might have heard of the term “vacant possession” – it’s not one that’s often queried, but do you really know what it means?
We touch on what exactly vacant possession means, why it’s important and any of the problems that may arise from it.
Most properties are “sold with vacant possession”, and all that essentially means is that the property will be empty on the day of the sale, meaning there can be no remaining residents or tenants left in the property after it has been exchanged.
This is where the contract comes in. When you’re buying or selling a property there will be a legal contract drawn up in the process by the seller’s solicitor or conveyancer and it covers all the details of the sale, and part of that is to ensure that the property is sold, with or without vacant possession, the latter is commonly used when a landlord wants to sell the property with tenants in situ.
To summarise, vacant possession three things legally:
- There must be no one inhabiting the property
- It must be free of personal items, furniture or rubbish.
- When you buy the property you must have undisturbed enjoyment, and essentially that means that the old owner can’t keep coming back to the property to pick things up.
Yes, you can. If you choose to sell without vacant possession then this is typically referred to as selling with tenants in situ. This is when the new owner of the property acquires it with a landlord status as included in the contract.
If you are a landlord that fits these criteria, not wanting to get rid of your tenants, then you will have to state this at the point of sale and the legal implications and the whole process is a little bit different to the traditional method of sale.
It’s a very important aspect to specify as it defines the customary basis on which the seller must hand over the property to the buyer. Here is a short extract from Birkett Long around the importance of vacant possession:
“The case of Cumberland Consolidated Holdings Ltd v Ireland [1946] KB 264 formulated the test for vacant possession. In this case it was held that a vendor who left chattels on the property sold by him to an extent depriving the purchaser of the physical enjoyment of part of the property had in fact failed to give vacant possession. It was also no answer for the vendor to have abandoned his ownership of the chattels on completion. The buyer was therefore entitled to damages for breach of this implied condition of the sale contract.”
You might also come across the terminology “available with vacant possession” or “vacant possession upon completion” when either viewing or looking at properties online. If a property is advertised in such a way then it means that the seller is ensuring that upon completion it will be empty.
This tends to happen if a landlord is selling a property that may have tenants when you come to view, but they are promising that they will leave when the property completes from a legal perspective.
Sometimes included in the contract is the expected date of vacant possession, and this as you may expect by the name, details the date that has been agreed to clear the property and all the tenants to make sure the property is in an appropriate state of vacant possession to be occupied by the new owner(s).
Generally, the expected date of vacant possession will line up with your completion day and if stated in your contract will be legally binding.
As a buyer of a property with vacant possession, don’t allow for any messing around from the seller. There are larger breaches of the contract, such as having tenants still stay in the property, or squatters, but also if they leave any unwanted items like utilities or rubbish everywhere, then they are still in breach of contracts.
If the property is tenanted but the property is being sold with vacant possession then you may want the expected date to be prior to the exchange date, so you can check the property to ensure it is empty and the tenants haven’t left it in a mess. If there is evidence that the tenants haven’t moved, then you should inform your conveyancer or solicitor.
There is a legal obligation for the seller to remove any rubbish and leave the property in a habitable state when the new owner takes over the property. If you fail to do this and it’s specified in the contract then you could land yourself in legal trouble as per breaching your contract – this may leave you liable for any damages caused.
It’s worth noting that it’s similar if you have tenants that are meant to leave the property, if they interfere in any way in regards to the new owner “enjoying” the property then again you are open to legal issues.
We touched on this earlier in the selling without vacant possessions section, but we’ll dive into a bit more detail! Having tenants makes the process of selling your property different, it’s referred to as selling with tenants in situ, and it essentially means that the tenants will continue to live in the property.
The property is sold to the buyer and the tenancy agreement and deposit is transferred as part of the process the new owner will start receiving the rental income immediately, and this will be taken care of by the conveyancer or solicitor that you appoint. If you are choosing to sell in this way, you should always inform your tenants of the situation and intentions being clear from the outset to avoid any future complications.
It’s also worth noting if you want to sell your home in this way it needs to be advertised as such, which will significantly narrow your potential pool of buyers to landlords, or want to be landlords, which can increase the time it takes to sell significantly.
You’ll also have to convince the potential buyer that your tenants are good, and they may want the references, proof of the fact they pay rent on time, credit checks and any other documentation you may have around your tenants.
Even though selling with vacant possession is the most common way of selling a property, there are still sometimes issues that can arise and opportunities for things to go wrong.
If you are looking at purchasing a property that has tenants, but states that it will be vacant possession, there is still a risk that the home may not be empty when you come to complete. This may not be the landlord’s fault, and it may just be that the tenants simply refuse to move out or leave their unwanted possessions in the property. This can cause a delay to when the buyer can move in, and if it’s all stated within the contract then the buyer could have a legal claim against their seller.
Should the home be turned over without having vacant possession, and it’s been specified in the contract, then there is a number of options available to the buyer. You can apply to the courts for the seller to fulfil the contractual terms and pay any damages, or alternatively cancel the contract and get the deposits paid back.
Navigation
What does vacant possession mean?
Can you sell without vacant possession?
Why is vacant possession important?
What about “available” with vacant possession & vacant possession “upon completion”
What is the “expected date” of vacant possession?
What does a buyer need to know?
What does a seller need to know?
Start your property portfolio today!
If you’ve ever gone through the process or are going through the process of buying or selling a home you might have heard of the term “vacant possession” – it’s not one that’s often queried, but do you really know what it means?
We touch on what exactly vacant possession means, why it’s important and any of the problems that may arise from it.
Most properties are “sold with vacant possession”, and all that essentially means is that the property will be empty on the day of the sale, meaning there can be no remaining residents or tenants left in the property after it has been exchanged.
This is where the contract comes in. When you’re buying or selling a property there will be a legal contract drawn up in the process by the seller’s solicitor or conveyancer and it covers all the details of the sale, and part of that is to ensure that the property is sold, with or without vacant possession, the latter is commonly used when a landlord wants to sell the property with tenants in situ.
To summarise, vacant possession three things legally:
- There must be no one inhabiting the property
- It must be free of personal items, furniture or rubbish.
- When you buy the property you must have undisturbed enjoyment, and essentially that means that the old owner can’t keep coming back to the property to pick things up.
Yes, you can. If you choose to sell without vacant possession then this is typically referred to as selling with tenants in situ. This is when the new owner of the property acquires it with a landlord status as included in the contract.
If you are a landlord that fits these criteria, not wanting to get rid of your tenants, then you will have to state this at the point of sale and the legal implications and the whole process is a little bit different to the traditional method of sale.
It’s a very important aspect to specify as it defines the customary basis on which the seller must hand over the property to the buyer. Here is a short extract from Birkett Long around the importance of vacant possession:
“The case of Cumberland Consolidated Holdings Ltd v Ireland [1946] KB 264 formulated the test for vacant possession. In this case it was held that a vendor who left chattels on the property sold by him to an extent depriving the purchaser of the physical enjoyment of part of the property had in fact failed to give vacant possession. It was also no answer for the vendor to have abandoned his ownership of the chattels on completion. The buyer was therefore entitled to damages for breach of this implied condition of the sale contract.”
You might also come across the terminology “available with vacant possession” or “vacant possession upon completion” when either viewing or looking at properties online. If a property is advertised in such a way then it means that the seller is ensuring that upon completion it will be empty.
This tends to happen if a landlord is selling a property that may have tenants when you come to view, but they are promising that they will leave when the property completes from a legal perspective.
Sometimes included in the contract is the expected date of vacant possession, and this as you may expect by the name, details the date that has been agreed to clear the property and all the tenants to make sure the property is in an appropriate state of vacant possession to be occupied by the new owner(s).
Generally, the expected date of vacant possession will line up with your completion day and if stated in your contract will be legally binding.
As a buyer of a property with vacant possession, don’t allow for any messing around from the seller. There are larger breaches of the contract, such as having tenants still stay in the property, or squatters, but also if they leave any unwanted items like utilities or rubbish everywhere, then they are still in breach of contracts.
If the property is tenanted but the property is being sold with vacant possession then you may want the expected date to be prior to the exchange date, so you can check the property to ensure it is empty and the tenants haven’t left it in a mess. If there is evidence that the tenants haven’t moved, then you should inform your conveyancer or solicitor.
There is a legal obligation for the seller to remove any rubbish and leave the property in a habitable state when the new owner takes over the property. If you fail to do this and it’s specified in the contract then you could land yourself in legal trouble as per breaching your contract – this may leave you liable for any damages caused.
It’s worth noting that it’s similar if you have tenants that are meant to leave the property, if they interfere in any way in regards to the new owner “enjoying” the property then again you are open to legal issues.
We touched on this earlier in the selling without vacant possessions section, but we’ll dive into a bit more detail! Having tenants makes the process of selling your property different, it’s referred to as selling with tenants in situ, and it essentially means that the tenants will continue to live in the property.
The property is sold to the buyer and the tenancy agreement and deposit is transferred as part of the process the new owner will start receiving the rental income immediately, and this will be taken care of by the conveyancer or solicitor that you appoint. If you are choosing to sell in this way, you should always inform your tenants of the situation and intentions being clear from the outset to avoid any future complications.
It’s also worth noting if you want to sell your home in this way it needs to be advertised as such, which will significantly narrow your potential pool of buyers to landlords, or want to be landlords, which can increase the time it takes to sell significantly.
You’ll also have to convince the potential buyer that your tenants are good, and they may want the references, proof of the fact they pay rent on time, credit checks and any other documentation you may have around your tenants.
Even though selling with vacant possession is the most common way of selling a property, there are still sometimes issues that can arise and opportunities for things to go wrong.
If you are looking at purchasing a property that has tenants, but states that it will be vacant possession, there is still a risk that the home may not be empty when you come to complete. This may not be the landlord’s fault, and it may just be that the tenants simply refuse to move out or leave their unwanted possessions in the property. This can cause a delay to when the buyer can move in, and if it’s all stated within the contract then the buyer could have a legal claim against their seller.
Should the home be turned over without having vacant possession, and it’s been specified in the contract, then there is a number of options available to the buyer. You can apply to the courts for the seller to fulfil the contractual terms and pay any damages, or alternatively cancel the contract and get the deposits paid back.
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