What is Vacant Possession? A definition and guide

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When a property is ‘sold with vacant possession’, it means that the property should be empty of tenants and furniture on the day that you complete your sale or purchase of it. The only items that should be left in the house, if any, are those agreed with the buyer in advance and written into the contract.

However, not all transfers of ownership are so simple. The Standard Conditions of Sale in England and Wales allow a property to be sold with or without vacant possession. In the latter case, it usually means there will be tenants in situ. Regardless of the conditions, the full terms of each tenancy agreement relating to the property must be stated in the contract.

The legal definition of vacant possession 

Vacant possession is a legal requirement in property transactions, where the buyer is assured they can take full and exclusive possession of the property after the sale is completed. 

This means three things: 

1. The property is free of occupants (e.g. tenants, squatters or other individuals). 

2. The property is free of chattels and rubbish, where all movable items (anything not agreed upon in the sale) are removed. This includes personal belongings, furniture, waste, etc. 

3. The property provides the new owner with undisturbed enjoyment. This means there are no legal or practical obstacles preventing the owner from using the property. 

Buying with vacant possession

When you buy a property with vacant possession, it means the current owner has agreed to have the property emptied of tenants, animals and personal belongings by the date of completion.

The exchange of contracts usually takes place a week or two before the completion date. Most tenants or sellers will continue to reside at the property during this period and use the time to pack up their belongings, but the agreed vacant possession requires them to be moved out by the completion date.

However, if you’re buying a property where the tenant is not the seller, there’s a risk that they will refuse to move out. Should you find yourself in this situation, it’s vital that you speak to your conveyancer before the exchange of contracts. It is likely that they will advise you to insist that the property is vacant at the time of the exchange. They may also add a clause allowing you to visit the property on the day of completion to ensure it is empty and there is no breach of the contract.

Selling with vacant possession

When you sell a property with vacant possession, you or your tenants may remain there until the agreed time stated in the contract. Once the contracts have been exchanged, you’ll be under a contractual obligation to leave the property yourself or remove your tenants on completion day, by the time specified in the contract (usually 2 pm). It is your responsibility to ensure the property is vacated and ready for the buyer to occupy on the day of completion.

Unless you have agreed with the buyer to leave behind any items prior to the completion day, doing so could result in a breach of the terms of your contract, and the buyer could make a claim against you.

Buying or selling with tenants in situ

If you buy a house with tenants in situ, the seller must provide you with the tenancy agreements and any information relevant to the tenancies. Your conveyancer should be able to give you some basic guidance on buying with tenants in situ and how the process differs from a typical transfer of ownership. As the buyer, don’t be afraid to ask questions about the tenancies. Provided the sale goes ahead as expected, the property’s new owner inherits the role of ‘landlord’ within the tenancy agreement.

What problems can arise around vacant possession?

Chances are, your property sale or purchase will be completed without a hitch; however, there are still opportunities for things to go wrong.

For example, the risk of buying a tenanted property with vacant possession on completion is that the tenants may refuse to vacate or remove their belongings by the agreed date. In another scenario, a seller who agreed to vacant possession upon completion may not vacate the property on time if their own move falls through at the last minute. Provided that vacant possession was agreed at the exchange of contracts, you should be legally protected as the buyer and should be able to make a claim in both cases.

The main risk for a seller is a claim being made against you if you don’t vacate the property on time. This can be especially risky if you’re a seller with tenants who need to vacate before the completion date. The best way to avoid this is to schedule the end of the tenancy well before the completion date. This ensures that you have enough time to investigate that the property is vacated and will be handed over to the required standard.

Where does conveyancing come in?

Due to the legal implications of vacant possession, a conveyancer can advise you on your next steps if a property isn’t vacated on time, or if you’re buying a property subject to an existing tenancy, they can provide specialist legal advice on the active tenancy agreements.

If you want more advice on vacant possession or are looking for help with buying or selling your home, don’t hesitate to get in touch or get a free quote.