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What is Vacant Possession?

11th May 2017

When buying or selling a property, ‘vacant possession’ means that the property is empty on the day of completion. Therefore the sellers or tenants have moved out and removed all of their belongings, only leaving behind items that have been agreed with the buyer.

The standard conditions of sale in England and Wales either allow a property to be sold with vacant possession or without vacant possession. If the property is sold without vacant possession each Tenancy Agreement relating to the property must be detailed in the contract for sale.

The reason for this is because when you’re buying a property you need to know who, if anyone, lives in it and on what terms.

Selling or Buying with Tenants in Situ

If you’re buying or selling with tenants already living in the property, the seller must disclose the Tenancy Agreements and provide information relevant to the tenancies. The buyer will ask questions relating to the tenancies and the tenancies will be listed in the contract for sale.

If you’re buying with tenants in a property your Conveyancer may be able to give you some basic guidance but it’s a good idea to get more detailed advice from a Landlord and Tenant specialist to make sure you are fully aware of the terms and implications of the tenancies before you proceed.

Selling with Vacant Possession

If you sell a property with vacant possession you, or your tenants, can remain there up until the day of completion. Following exchange of contracts you will be under a contractual obligation to leave the property, or remove your tenants, on the day of completion by the time specified in the contract. This is normally 2pm.

You must ensure that all belongings are removed from the property unless you’ve agreed in advance that some items are to remain. 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.

If items are to remain following completion, for example white goods, these are usually set out in the Memorandum of Sale, fixtures and fittings form or in a private agreement.

As the seller it’s your responsibility to make sure the property is vacant on completion. If you are relying on your tenants to move out then you have little physical control over when the property is vacated. If the tenants don’t leave on time, or leave behind belongings or rubbish, you may be unable to complete the sale with vacant possession. This is likely to delay completion or result in a claim from the buyer.

It is therefore advisable to make sure your tenants leave before the exchange of contracts takes place. You may lose some rental income if the property is empty for a period, but if you exchange contracts with occupiers in the property and they don’t move out before completion, the costs could be higher than the loss of rental income.

Buying with Vacant Possession

If you are buying a property from a seller who lives there, they may not be able to move out before the date of completion, as the purchase of their new home may be dependent on the sale.

When exchange of contract takes place there is usually a gap of a week or two before completion. During this time the seller is likely to be living at the property but they will be obliged to leave by the time completion takes place. If you don’t intend to live at the property it’s still a good idea to visit the property immediately following completion to make sure that the property has been vacated.

If you are buying a property with a tenant or occupier living there who isn’t the seller there is a risk that the occupier may refuse to move out. If this is a concern you need to tell your Conveyancer before the exchange of contracts. It may be safer to try to insist that the property is vacant before exchange takes place. If this is not possible then your

Conveyancer can put a clause in the contract to allow you to inspect the property on the day of completion so you can be certain that the property is actually vacant.

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