Vacant Possession | What Does It Mean and What Do Sellers Need to Know?
-
by Property Investments UK
The Property Investments UK editorial team have been researching and writing about the UK's property market for more than a decade.
If you are buying or selling a home, you might have heard the term 'vacant possession' come up but be puzzled about what it means. On the surface of it, it is a simple concept: 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 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?
Transferring a property from one person to another is a process known as conveyancing. During the conveyancing process, it is the seller's responsibility (and their solicitor's) to draw up a legal contract covering all the details. This will include things like the agreed price, boundaries to the property, planning or legal restrictions - services like drainage and gas. It will also cover those items that should be left on the property, such as curtains or white goods.
It is in this contract that it will be stipulated whether the property will be sold with vacant possession. Vacant possession means 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 means three things. At the point of sale...
- The property must be free of people - whether they are owners, tenants or squatters - with the new owners, legally and physically, able to move in.
- The property must be free of chattels like furniture or personal items. And yes, this applies to rubbish and items to throw away too. Chattels are distinct from fixtures, although that distinction can be blurry. The important thing is that 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 up more personal items 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.
Sell Your Investment Property in Days
Any condition, tenanted or vacant, for it’s full market value. Offers in 3-5 days. No sale, no fee.
Selling a Home with Sitting Tenants
Landlords looking to sell a buy-to-let with tenants in situ will not be 'selling with vacant possession'. In a case like this, a stipulation for vacant possession wouldn't be included in the contract, and the new owner would inherit landlord status.
If you are such a landlord, you must discuss the legal implications of selling your property with tenants living there with your conveyancing solicitor. They will be able to guide you through the process.
However, the main differences 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 you may come across when browsing online property portals or in estate agent windows and booklets. Whilst 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, the inclusion of vacant possession into the contract is automatic. It is only when these outliers exist it becomes a point of consideration.
What is Meant by the Expected Date?
The 'expected date' (if included in the contract) refers to the date the property should be cleared of all tenants and chattels. From this date, the new owner is entitled to 'undisturbed enjoyment of the property'.
Most commonly, an 'expected date' would fall approximately one week after an exchange of contracts: it's the day of 'picking up the keys'.
Of course, delays can and do happen: proceedings won't go according to plan. However, there are legal implications to not sticking to specified dates. And this is something that needs 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.
The conveyancing solicitor will not visit the property in question. If you, as a buyer, are concerned - and if there's evidence of habitation after you were assured the house was empty - then you should speak with your solicitor promptly.
Finally, buyers shouldn't put up with any nonsense. Whilst tenants or squatters might represent a sizable breach of the rules around vacant repossession, unwanted sofas, beds or even masonry in the garden: these will all (likely) be 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 contract. This ensures that the conditions stipulated in those contracts are being met. But 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, you need to know selling a property with vacant possession means your tenants and their personal effects must be gone from the house when the new owner takes over.
This is a legal obligation. It includes rubbish and concepts around leaving the property in a 'fit state' to pass on.
Failing to live up to your contractual obligations will create trouble for you. If you breach the contract, the new owner could have a legal claim against you. This could result in a delay of the 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 several 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 mean 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. This means any course of action will depend on what the contract says.