What is Vacant Possession?

19 April 2021

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

In England and Wales a property can be sold either with or without vacant possession.

If the property is sold without vacant possession, this usually means there will be tenants in situ. Any tenancy agreement relating to the property must be included in the contract because when you’re buying a property you need to know who, if anyone, is living 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 provide you with the tenancy agreements and any information relevant to the tenancies. As the buyer, you can ask questions about the tenancies and details of the tenancies will also be listed in the contract for sale.

Your Conveyancer may be able to give you some basic guidance on buying with tenants in situ, but it’s a good idea to get more detailed advice from a Landlord and Tenant specialist. This will help you to make sure you're fully aware of the terms and implications of the tenancies before you proceed with the purchase.

Selling with vacant possession

If you sell a property with vacant possession, you or your tenants can stay there up until the day of completion. After contracts have been exchanged, you'll be under a contractual obligation to leave the property or remove your tenants on completion day, by the time specified in the contract. This is normally 2pm.

You must make sure that all belongings are removed from the property unless you’ve agreed with the buyer in advance that some items are being left behind. If you or your tenants leave behind furniture, rubbish or any items that prevent the buyer from immediately using the property, you may be breaching the terms of your contract and the buyer could make a claim against you.

If items are being left behind after completion, such as white goods, these are usually set out in the Memorandum of Sale, the 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 contracts takes place, there's 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 the sale completes. If you don’t intend to live at the property it’s still a good idea to visit the property immediately after completion to make sure it has been vacated.

If you're 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.

More articles