If you’re looking into moving house, you’ve likely heard of the term ‘vacant possession.’ What does vacant possession actually mean? Whilst it seems simple enough to deduce the answer, there is a specific meaning to the phrase when used in the sale or purchase of a property in the UK.
What Is Vacant Possession?
For property buyers or sellers, the term ‘vacant possession’ is typically used within the exchange contract for a property transaction. Simply put, it means that the property must be left entirely empty on the day of completion. These means no personal belongings or tenants can reside at the property.
For many properties this process may appear fairly simple. When you purchase a property to become your new home, you expect to be able to move in on the day of completion. You want to feel at home in your new house as soon as possible, which is why you’d expect to enter an empty property that allows you to settle in and make your own. However, not all transactions are this simple.
Buying or Selling With Tenants at the Property
One factor that can make the exchange process far more complicated is the involvement of tenants. This occurs when a property owner has decided to sell their house whilst their are letting to tenants. Typically, this occurs when the completion date occurs before the end the tenancy terms.
It is vitally important during transactions such as these, that the property owner and current landlord discloses the current situation. It may occur that the potential sellers are happy to wait out the remaining time on the tenancy contract. As the new owners, they would inherit the role of landlords during this period.
These circumstances would be discussed in detail with the buyer and seller’s conveyancing solicitor to ensure the process is dealt with appropriately and each of the assigned responsibilities are transferred officially.
Instead of purchasing a property with vacant possession in this case, the property would be termed as ‘buy to let.’ This would be officiated within the exchange contract and the tenants should be informed of the change of property ownership.
Buying a Property with Vacant Possession
The term ‘vacant possession’ will have slightly different implications depending on which side of the exchange you are. As buyers, your experience should be fairly simple. During the property exchange negotiations, you or your conveyancing solicitor likely would have ensured the inclusion a term that states the property is sold with vacant possession. Contracts are then exchanged and the period before completion can vary between two and three weeks in most cases.
During this time, the seller will most likely remain in their home. As many people would, they’ll likely spend the time packing up their final belongings. They might make arrangements to move onto their next property and leave the home in a fit state for the next owners.
On completion day, you would expect to collect the keys to the property and enter your new home. There should be no presence of the previous owners, their belongings or tenants. Should this occur after agreeing a vacant possession exchange, your conveyancer will issue the seller a notice to remove or retrieve any remaining items. If this notice is disregarded or doesn’t receive a response, the individual(s) can be taken to court.
Selling a Property with Vacant Possession
From the perspective of a seller, if you have agreed to transfer the property with vacant possession, it is your responsibility to ensure the term is met by the completion date. After contracts are exchanged, all agreements made are legal obligations. Therefore you should take action to remove any belongings, ensure that tenants have moved out, and made arrangements for your own accommodation.
If the new owners of the property dispute that the house was sold without vacant possession, it is their right to claim legal action against you.
What Role does Conveyancing Play?
Conveyancing is one of the key processes that you’ll become familiar with throughout the process of your purchase or sale. It is the legal process of transferring ownership of a property between two parties. Throughout the conveyancing process is it key that you work alongside a highly competent licensed solicitor. It is their job to ensure that the transaction goes through smoothly. They should also ensure that the exchange contract is written with your best interests.
When drawing up the exchange contract, vacant possession is certainly something that should be discussed between you and your solicitor. Either from the buyers or sellers perspective, it is important for both parties to be aware of the full meaning and implications of the term. If a buyer states that vacant possession is essential to the completion of exchange, it is vital that the sellers solicitor informs them of their obligations in order to complete the transaction.
Working with a professional, experienced solicitor can be vital during the negotiation stages. If any factor is left out of discussion, there could be serious implications that may become time consuming or costly. Vacant possession is one of the key factors that should be considered. However, it is something that could easily fall through the cracks if working with an incompetent solicitor.
Moving Sorted are able to partner you with a trusted professional conveyancing solicitor. Make conveyancing simple and hassle-free with an online conveyancer who knows every inch of the exchange process. Get your free online quote today from Moving Sorted.