Vacant Possession | What Exactly does the Term Mean?
If you are in the process of buying or selling a home then you might have heard the term 'vacant possession' come up and yet be a little uncertain about what exactly it means. On the surface of it, it is a simple concept: that a house 'sold with vacant possession' is a house that is empty and ready for the next owner to move in, unhindered. But, as we shall explore throughout the rest of this article, there is slightly more to it than that.
* Please note: nothing here is intended as legal advice. We are a company of property investors, not solicitors. If you are facing a legal problem, we strongly suggest you seek help from an expert.
What does Vacant Possession Mean?
When transferring ownership of a property from one person to another (a process, known as conveyancing), it is the responsibility of the seller (and their solicitor) to draw up a legal contract, covering details of the sale. This will include things like the agreed price, boundaries to the property, planning or legal restrictions, services like drainage and gas and also the items to be left in the property (such as curtains or white goods).
If the contract stipulates that the property is to be sold with vacant possession, this means that the property must be clear of all residents (or tenants) when the sale is completed and contain only the physical items that have been pre-agreed to stay where they are.
Vacant possession essentially means three things. At the point of sale...
- The property must be free of people - whether they be the owners, tenants or squatters - with the new owners, legally and physically, able to move in.
- The property must be free of chattels - such as furniture, personal items and yes, rubbish or items to throw away, too. Chattels are distinct from fixtures, although sometimes that distinction can be blurred. What remains in the home, needs to be pre-agreed and negotiated.
- The new owner must have undisturbed enjoyment of the property - which means, to give one example, that it is not acceptable for the old owner to keep coming to the property to pick more personal items up after the sale has gone through. And to give another, more extreme, example, a property can not be considered to have been sold with vacant possession if there is a legal obstacle to the enjoyment of that property, such as an already-existing compulsory purchase order, from a local authority.
Selling a Home with Sitting Tenants
Landlords who are looking to sell a buy-to-let with tenants in situ will not be 'selling with vacant possession' so it wouldn't be included in the contract and the new owner would inherit landlord-status.
If you are such a landlord then you will need to discuss the legal implications of selling your property with tenants included with your conveyancing solicitor who will be able to guide you through the process.
The main, differences, however between this scenario and a more traditional exchange between homeowners, legally speaking, will lie with those documents that pertain to the tenancy agreement(s).
What does 'Available with Vacant Repossession' Mean?
‘Available with vacant possession’ and ‘vacant possession upon completion’ are terms that you might come across when browsing online property portals or in estate agent windows and booklets. While they have a legal meaning - that the property will be vacant of people and the personal effects of the previous owner - such terms are deployed more often for marketing than they are relevant information for a buyer, at that stage in their journey.
Remember, the vast majority of houses are sold without tenants. In most cases, it is not necessary to push this scenario as being, somehow, some special feature.
What is Meant by 'Expected Date'?
The 'expected date', if included in the contract, refers to the date on which the property in question will be cleared of all tenants and chattels and the new owner is free to have undisturbed enjoyment of it. Most commonly an 'expected date' would fall approximately one week after an exchange of contracts: the day of 'picking up the keys'.
Of course, delays can and do happen and not every plan goes perfectly. It is, however, important to realise that there are legal implications to not sticking to those dates, specified in the contract, and they need to be taken seriously.
What Does a Buyer Need to Know/Do?
A seller of a buy-to-let may well have tenants in place who are due to leave the property, along with their possessions before the expected date. In this situation, the buyer might want to ask for a time-frame and conduct a second inspection, once the tenants have moved out.
It is important to realise that your conveyancing solicitor will not visit the property in question. If you, as a buyer, are concerned - if there is evidence of habitation when you were assured the house was empty - then you need to speak with your solicitor promptly.
Finally, a buyer shouldn't put up with any nonsense. Whilst tenants or squatters represent a big breach of the rules around vacant repossession, unwanted sofas, beds or piles of masonry in the garden are all breaches of contract.
And yet these breaches are harder to resolve after you have taken possession of the property.
It is best to inspect a home, before an exchange of contracts, to ensure that the conditions stipulated in those contracts are being met. This is doubly true of a house, where tenants have been living because they have rights to the property too.
What Does a Seller Need to Know/Do?
If you are a landlord or buy-to-let investor, selling a property with vacant possession then you need all tenants and their personal effects gone from the house, at the point that the new owner takes over.
This is a legal obligation and it includes rubbish and concepts around leaving the property in a 'fit state' to pass on.
Failure to live up to the expectation of the contract can land you in trouble. If you breach your contract then the new owner could have a legal claim against you that could result in a delay of payment or see you liable for damages.
It is, in short, your responsibility to ensure the contractual appliance of the sale. If your tenant interferes, in any way, with the new owner's ability to 'enjoy the property' then you are at risk of legal action.
What if a Seller Fails to Grant Vacant Possession?
Should the home be turned over without vacant possession, should it be specified in the contract, the buyer has a number of options available.
This can include an application to the courts to order the seller to fulfil the terms of the contract and pay damages or it could include cancelling the contract and claiming back the deposit.
But it is essential to note that every contract covering a house sale is specific to the individual transaction which means any and all courses of action will depend on what exactly the contract contains.