Finding a home - Investment - First time buyer

What does vacant possession mean?

3 min read

Ever wondered what vacant possession actually means? It has implications in any property transaction, find out more below.

  • Arti Dhamu, Move Specialist at My Home Move Conveyancing
    Arti Dhamu

    Move Specialist

    Published May 25th 2023

couple moving into a house bought with vacant possession

When buying or selling a house, the term vacant possession simply means that the house you’re buying or selling must be empty on the day of completion.

This means that there must be no remaining residents or tenants at the home, and no belongings other than those that have agreed to be left in the contract, on the day that you complete the purchase or sale. Although this may seem obvious and the ‘done-thing’, but not all transfers of ownership are this simple. Read our guide to understand more about buying and selling with vacant possession and what the consequences are for you.

What does available with vacant possession mean?

When looking for a house to buy you may come across the statement ‘available with vacant possession’ or ‘vacant possession upon completion’. If the house comes with this, it simply means that if you were to buy the property, the seller can contractually assure you that there will not be any tenants or personal affects in the house on the day of your completion.

What is ‘expected date’ of vacant possession?

The expected date of vacant possession, if included in your contracts, is the date at which the seller has agreed to the buyer that the property will be vacant of tenants/occupiers and possessions, and in an appropriate state to occupy. That’s not to say things can’t go wrong and delays can’t happen, but it’s important as it carries legal implications.

Buying or selling with tenants at the property

The Standard Conditions of Sale in England and Wales allow a property to be sold either with or without vacant possession. In the case of the latter, this usually indicates there are occupiers of the property whose tenancy agreement runs beyond the completion date of the sale. That means that if you were the buyer, you’d be agreeing to take ownership of the property with tenants in situ.

Buying or selling a property that is occupied by tenants is more common that you might think, and your conveyancer will be able to help you understand any differences in the process from a typical transfer of ownership.

One difference is that the seller will need to disclose the active tenancy agreements and any other important documentation relating to the tenancy. With these to hand, the buyer and their conveyancer can then examine these documents and raise any questions they may have with the seller.

Provided the buyer is happy, the sale goes ahead as normal, and the property’s new owner simply inherits the role as ‘landlord’ within the tenancy agreement (though it is a good idea to have documents edited and resigned by both parties, with your name(s) present). Read our guide to find out more about purchasing a buy to let property

Buying with vacant possession

If you’re buying a home with vacant possession, this means the current owner has agreed to have the property empty of residents and belongings by the completion date.

Exchange of contracts usually takes place a week or two before the agreed completion date and once done, the purchase/ sale is legally binding. In most cases, the previous owners will remain resident at the home during this period, whether this is the case or not, if buying with vacant possession, everything will need to be emptied out by completion day.

You may find yourself in a situation where you’re buying with vacant possession, and the current owner has tenants living at the property. This would mean the current owner has agreed to terminate – or not renew – the tenancy agreement and will ensure the tenants are moved out before exchange or completion.

Selling with vacant possession

If you sell a property with vacant possession, it means you or any tenants you have must remove yourselves and all personal affects (except those agreed to be left in the contract) by completion day. It’s at the point where contracts are exchanged that this now becomes your legal obligation to fulfil this..

Failure to do so risks breach of your contract, and the buyer could make a legal claim against you. This applies to anything that would stop the buyer immediately occupying the property, such as furniture and rubbish being left around.

It is your responsibility to ensure the property is vacated and emptied. Therefore, if you have any tenants, it lies with you to ensure they’re moved out before completion day. If the tenants do not move on time or leave behind possessions and rubbish, this could again result in a claim from the buyer and a delay in competition.

What problems can arise around vacant possession?

While most property purchases and sales go smoothly once exchange of contracts has occurred, things can still go wrong.

There is a bigger risk of issues arising if you’re buying a tenanted property with vacant possession on completion, as there’s a risk the tenants may refuse to leave the property or fail remove their possessions by the agreed date. Even without tenants, a seller who has contractually agreed to vacant possession upon completion may not empty the property on time for some reason, such as if their own move to has fallen through at the very last minute. In each case, you are legally protected as the buyer and should be able to make a claim, provided that vacant possession was agreed at exchange of contracts.

The risk as a seller, is receiving a claim against you if you don’t vacate the property on time. This can be particularly risky if you’re a seller with tenants who need to vacate before completion date. It is for this reason that it is always a good idea to schedule the end of the tenancy well before the completion date – if not immediately before the exchange of contracts. This gives you ample time to investigate that the property is vacated and ensure it will be handed over in the required standard before the clock starts ticking on a legally binding completion date.

Where does conveyancing come in?

With its legal implications, your conveyancer is best placed to advise you on the details when it comes to vacant possession. If you are buying subject to an existing tenancy, you will be advised to get specialist legal advice on the active tenancy agreements. Your conveyancer will also be there to help you if anything goes wrong and advise you on your next steps if a property isn’t vacated on time.

If you want some more advice on vacant possession, or you’re looking for a conveyancer to help you with buying or selling your home, or have any questions, don’t hesitate to get in touch with us.

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