Buying a house is more than a transaction; it's about starting a new chapter in a space that's unequivocally yours. In this article, part of our buying a house series, we talk about the importance of vacant possession.
Get practical advice on ensuring your dream home is ready for your arrival, even if you are buying to renovate.
Defining vacant possession
Vacant possession means that at the agreed date of a property sale, the property is empty of all people and personal possessions. In the context of property purchases, it's the state in which a buyer expects to receive the premises.
This doesn't just refer to an absence of occupants but also ensures that no one has a right to occupy it in the future under an existing tenancy or any other agreement.
Conveyancing plays an important role in overcoming the hurdles related to occupancy, streamlining the process for both buyers and sellers.
Its significance in property transactions
Providing vacant possession is a legal obligation for most property purchases in the UK.
If you're selling a property, ensuring vacant possession means that the buyer can start to occupy, rent out, or conduct redevelopment works without any delay or legal implications.
On the other hand, as a buyer, receiving a property with vacant possession ensures that you won't face unexpected tenants or occupiers and can take full control from the completion date.
Both sellers and buyers should be keenly aware of the term 'vacant possession' in their contracts. If not adhered to, it could lead to claims in court, causing unnecessary delays and expenses for both parties. Hence, always seek legal advice early on when dealing with this term in property transactions.
Key dates in vacant possession
What is the 'expected date'?
When dealing with property, the 'expected date' refers to the day both parties anticipate the tenant will vacate the property.
In a typical tenancy agreement, the expected date provides both the landlord and the tenant with a reference point. This date allows for better planning, especially when the landlord intends to sell the property.
Relation with the completion date
Linking to the 'expected date', the completion date is when the buyer anticipates acquiring possession of the property. In most property sales, the completion day follows the exchange of contracts. Here's how they interact:
Exchange of contracts: this stage formalises the sale agreement. Both parties - the buyer and the seller - agree on terms and become legally bound. After contracts exchange, pulling out usually means incurring a penalty.
Completion day: on this day, the property ownership shifts. The buyer pays the remaining balance, and in return, the seller provides vacant possession. It's worth noting that the time between the exchange of contracts and the completion day can vary. Some opt for a simultaneous exchange and completion, while others might prefer a gap, depending on circumstances.
For a seamless process, aligning the expected date with the completion date is a top tip. It ensures the tenant has ample time to vacate, granting the buyer immediate access post-completion.
Remember, if you're unsure about any dates or clauses in your lease or tenancy agreement, seeking advice from legal advisers can offer further clarity.
Ensuring vacant possession when buying
Addressing active tenancy agreements
Active tenancy agreements pose a common hurdle when buying a property. Check the property's lease agreements early on. Familiarise yourself with break clauses; these allow a landlord or tenant to terminate the lease before its end date. Exercising a break clause requires compliance with its specific conditions.
Should you wish to end a tenancy, ensure you adhere to the notice period stated within the lease. For tenants with longer-standing agreements, knowledge of the tenant act proves useful. This act outlines both the landlord's and tenant's rights.
Property's state and potential works
Properties may house more issues. Survey the land for problems, such as ongoing planning permission works or structural projects.
Early property checks can reveal ongoing construction projects or pending planning permission applications.
Buyers should consider inquiring about these early on to avoid unpleasant surprises post-purchase. Further information can often be sourced from the land registry.
Selling and providing vacant possession
Handling current tenants
Tenants can complicate the sale process, especially if their lease doesn't align with your selling timeline. Landlords, maintain open communication with your tenants. Inform them of your intention to sell and discuss the possibility of providing vacant possession upon completion.
If tenants pay rent diligently and without delay, common law often rewards them with certain protections. Be prepared to negotiate a mutually agreeable solution.
For instance, landlords might offer a rent reduction for early termination. In the event a tenant refuses to vacate, court ruled evictions might be the next step.
However, such measures should remain a last resort.
Preparing the property for sale
Once tenants have vacated, ensure the property exudes appeal. Clear any personal items and address maintenance issues. Sellers, this is your chance to showcase the house's best features.
Obtain necessary certificates, like energy performance or electrical safety, to avoid potential claims from the purchaser. It's wise to consult with professionals for advice on specific requirements.
Challenges in obtaining vacant possession
Tenancies, with their varying durations and clauses, can pose obstacles to achieving vacant possession.
The landscape of British property law further complicates matters, with rights granted to both the landlord and tenant. Let's look at these challenges.
Active tenancies and obligations
Often, properties on sale have tenants living within them. When buying a property with an active lease agreement, ensure you're aware of the break clause, if any. This clause determines when a lease can be terminated before its set end date.
For instance, if you're the purchaser of a property with a year-long lease that began just two months ago, and there's no break clause, the tenant has the right to stay for the remaining ten months.
The importance of a tenant vacating a property properly and a tenant's obligation to give vacant possession might not be straightforward.
However, not all is lost for our proactive buyer. Consider initiating early communication with the landlord and tenant. While it might not guarantee immediate vacant possession, understanding each party's needs can facilitate smoother transitions in the future.
Unexpected occupants and their rights
So, you've exchanged contracts and are looking forward to moving into your dream home. But, on the moving day, you discover someone is living on the property. These unexpected occupants, sometimes termed 'squatters', might claim rights over the land. While this scenario might seem like a rare hiccup in the property world, it's a situation that needs addressing.
In such cases, it becomes essential to establish the status of these occupants. Are they former tenants? Or perhaps someone who was granted permission to stay by the previous owner?
Their claim over the property will dictate the course of action. For example, if they were granted rights by the previous owner, they could stay till their agreement expires.
Conveyancing's role in vacant possession
The world of buying or selling a house requires expertise to ensure smooth transitions. Here's where conveyancers come into the picture, offering their expertise in the legalities of property transactions.
Assistance from conveyancers
Seeking the aid of a conveyancer can provide clarity and direction when aiming for vacant possession. These experts can advise on the terms of the contract, ensuring all parties involved are aware of their rights and responsibilities. For example, the standard conditions of sale typically require the seller to provide vacant possession on completion. If they fail to do so, the buyer might claim damages.
Moreover, if you're the person selling a property, a conveyancer can guide you on how best to ensure you meet this obligation. Whether it involves serving notice to tenants or dealing with unexpected occupants, their guidance can prove invaluable.
Reviewing tenancy documents and communication
When tenants are involved, you must review all tenancy documents. These records detail the rights and obligations of both the landlord and tenant. Conveyancers are well-equipped to scrutinise such agreements, ensuring you're not stepping on any legal landmines.
But beyond just the black-and-white of contracts, communication remains king. Keeping open channels with tenants or the previous owner can ease many potential complications. Conveyancers can aid in establishing these dialogues, ensuring all parties are on the same page.