What is Vacant Possession?

18/04/2019
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?


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:


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


    1

    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.

What remedies do you have as a buyer if you don't get vacant possession as expected?

If you don't get vacant possession and your seller is in breach of the sale contract, there are several remedies available to you.

You can apply for a court order for 'specific performance of the contract' together with damages that may be appropriate. Alternatively, you might rescind the sale contract and recover the deposit along with damages, or it may be more practicable to complete the transfer despite the breach and to claim damages.

More controversially, according to some experts you might even be able to terminate a contract for sale following completion. The argument runs that that the contract does not merge with the transfer on completion and that the obligation to provide vacant possession doesn't disappear.

In circumstances where your seller has left belongings ('chattels') on the site and is in breach of the obligation to give vacant possession, you must act reasonably and comply with ordinary principles of negligence in respect of the seller’s belongings.

If you decide to take on the role of what's known in legal terms as an ‘involuntary bailee’, you must take reasonable steps to contact the seller to remove the items and must hold the items for a reasonable period before disposal. What counts as reasonable obviously depends on the circumstances.

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    2

    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.

Can debris be part of the deal?

Debris left on the site can theoretically be regarded as part of the site acquired by a buyer. In the case of Hynes v Vaughan [(1985) 50 P&CR 444], the High Court held that debris left outside the building on the site had effectively merged with the soil of the property and had therefore formed part of the purchase.

The debris in question included garden rubbish and compost heaps. Due to the merge, the seller was not prevented from satisfying vacant possession based upon the specific contents in question. Of course, this finding is circumstantial with emphasis on the composition and location of the debris, however it demonstrates the need to exercise extreme caution(!)


    3

    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

Related News Articles

 
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Seller left personal property in house - what can you legally do?
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What happens on completion day?
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