What Does Selling With Vacant Possession Mean?
18/04/2019
(Last Updated: 18/04/2019)
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7 min read
Key Takeaways
- If the contract specifies vacant possession, the property must be empty on the day of completion (usually by 2pm)
- Failure to give vacant possession on completion would then be a breach of contract
- In this case the buyer could apply for a court order and may be able rescind the contract (recovering deposit and costs)
- The buyer must be very careful about how they handle possessions left on the property
What does sold with vacant possession mean?
Vacant possession in residential conveyancing means that a property you're buying is empty on completion day. This means the sellers and or the seller's tenants, if applicable, have moved out and taken all their belongings with them, leaving only those items agreed with the buyer. However this is not always the case, which can cause problems.
Standard conditions of sale in England and Wales state that any property sold is sold either with or without vacant possession. In the case of the latter, each tenancy agreement relating to the property must be detailed in the contract for sale: it's understandable that if you were to buy the property, you'd need to know who lived in it and under what terms.
Found unwanted belongings in your home on completion day?
Then please read our article which explains what you can legally do if your seller has left personal property in the dwelling.
Now if you were intending to become a Buy to Let landlord (click to find out more), you may well want to buy a property without vacant possession, i.e. with one or more tenants in situ (click to find out more), however the vendor must provide the related tenancy agreements and other related information, respond to any enquiries about this and provide all the agreements in the contract for sale.
Where problems can arise sometimes is when a tenant remains in the property or the seller has left belongings in it on completion day. The former situation can sometimes arise because a seller has been unwilling to make a tenant move out before exchanging contracts just in case the sale didn't proceed and they suffer a loss in rental income.
This article considers vacant possession and looks at:
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What actual obligations does contractual vacant possession place on the seller?
If you're selling a property 'with vacant possession':
- You or your tenants can remain there up until the day of completion.
- After exchange of contracts you are contractually obliged to leave the property, or remove your tenants, on the day of completion by the time specified in the contract which is normally 2pm.
- Unless you've agreed in advance with your buyer about leaving certain items, you must ensure that all your belongings are removed from the property.
- Any items which are to remain following completion, such as white goods, are usually set out in the Memorandum of Sale, Fittings and Contents form or via documented private agreement.
- If you – or your tenants – leave behind furniture, rubbish or any items that will prevent the buyer from immediately using the property, you may breach the terms of your contract and the buyer could make a claim against you. At the very least, completion might be delayed.
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When should you make your tenants leave if selling with vacant possession?
You are strongly advised to do this before exchanging contracts; this will mean possibly losing rental income if the property ends up staying empty for a period but if you exchange contracts with tenants in the dwelling and they're still there at the completion date, you might find that you'll have to pay out for costs higher than the rental income loss.
As a buyer, you might try insisting that the property is vacant before exchange takes place although your seller might not agree to this. Failing that, you could request your conveyancer to amend your contract to state expressly that vacant possession is a fundamental term after exchange and your solicitor can check both the tenancy agreement and the notice served upon the tenants.
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How likely is it that your seller will only move out on completion day?
Your seller, if they're purchasing onward, might be reliant on your completion monies to pay for their next property, which means they might well have to move out on completion day.
Naturally if you're going to be living in the property you'll know immediately if they've moved out as planned. This is why if you're not intending to live in the property, you should still check on the day after the agreed completion time to see if they've vacated properly.
Buying a property? Worried about vacant possession?
If you're expecting to buy with a tenant in situ, all well and good, but if you're not, our experienced property lawyers can work to ensure there's no nasty surprises on completion day, whether it's a tenant that should have moved out or belongings and debris left in the property which weren't agreed in your sale.
Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels - Lawyer Checker used when required
Frequently Asked Questions
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Written by:
Andrew Boast
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Reviewed by:
Caragh Bailey
Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.
