What Is Vacant Possession?James Trafford
A property that is being sold subject to “vacant possession” means it must not be occupied on completion day. Whether it is the owner or a tenant living in the property, they must move out along with all their possessions prior to the sale being completed, leaving behind only what was agreed upon and listed within the fixtures and fittings TA10 form.
In England and Wales, a property can be sold with or without vacant possession. Therefore, it is crucial to discern from the contract—from the inclusion of the tenancy agreement—the status before the completion date has arrived. If sold without vacant possession, it often means that there will still be occupants living in the property on completion day.
It’s important for homebuyers to understand what vacant possession is and how it can potentially affect the sale process because some transfers of ownership may come with complications. Vacant possession provides the legal right to exclusive possession of your home after the sale or grant of a lease.
Purchasing a property with a vacant possession
If you buy a property that is subject to vacant possession, it means that you have the right to have the property emptied of all residents and their personal belongings prior to the completion date.
Typically, tenants will be required to vacate the property during the period of exchanging contracts, about two weeks before completion. This should give ample time for the tenant or seller to arrange for all their belongings to be packed and removed. It may be the case, however, that after buying the property, you won’t be living here for a while. It’s advisable to still attend the property on completion to make sure that the property has been vacated as agreed.
In some cases, for various reasons, the tenant will refuse to vacate the property, in which case you must get advice from your solicitor before you exchange contracts. If this happens, your solicitor may advise you to insist on a vacation of the property prior to exchanging contracts, to make sure there will be no problems down the line. To further allay any concerns about a tenant refusing to move out, your solicitor may also ask for an ad hoc clause to be added in the contract, giving you permission to inspect the property on completion day. Anything left behind that shouldn’t be there could be deemed a breach of contract and be subject to possible litigation.
However, if you are not buying a property that is subject to vacant possession, and that still has tenants living in it, you will be taking on the responsibility of being a landlord and all the legal responsibilities that go with it. In this situation, of course, it won’t be required to arrange a date for tenants to vacate the property.
Another possible situation that could arise when buying a property is that the seller who still lives there may be unable to move out before the completion date because their purchase of a new home may be reliant on the sale. It will be during the few-week gap between the exchange of contracts and completion that the seller will be obliged to move out and take all their belongings with them.
Issuing a Vacate Possession
The expressed terms of the contract should specify when a vacant possession is given, and there are some specific instances of when one is likely required: When a property is being sold or leased; when the tenant must leave the property after the lease term expires; and when a tenant has broken the lease early.
It’s advisable to make sure you read through the contracts when buying your home, to ascertain when the tenants are required to vacate the property. This will help eliminate any nasty surprises later down the line.
When subject to a vacant possession provision, solicitors or conveyancers will usually make sure that they brief sellers and landlords to ask their tenants to leave prior to exchanging contracts. Sellers could incur a financial penalty fee if the expected vacant possession date isn’t adhered to. As noted, the time between exchange and completion – typically one to two weeks – should be long enough for them to move out.
It sometimes happens that the buyer will need or require the property to be vacated before the exchange of contracts. In this instance, the buyer will have to negotiate with the seller to see if they are willing for this to happen.
Buying or selling property not subject to vacant possession
If you are purchasing a property that does not come with a vacant possession provision in the contract, you could be buying with tenants in situ. This will result in you becoming a landlord with a property that already has tenants living in it. When buying property like this, it’s important to get good legal advice before proceeding with the sale.
Property that is sold with tenants already living in it must come with a full disclosure of the tenancy agreement, with all the relevant information brought to your attention. Even so, you can still ask further questions to make sure that you have understood the agreement terms fully and what you will be taking on. For example, if you are buying a buy-to-let property as an investment, you will want to know what the tenants are paying in rent and what other terms there are that could affect rental income.