What is Vacant Possession Upon Completion


If you’re in the process of either buying or selling property, it is imperative that you are conversant with the term vacant possession. It is bound to come up during the negotiations and contract terms agreement.

What is Vacant Possession?

The term vacant possession refers to the ability of a buyer to have exclusive and immediate occupancy, ownership, and control of the property newly acquired. It must be devoid of contents, though this does not always mean completely empty. The normal rule in a property transaction is that the seller will provide the purchaser with unoccupied possession on the completion date.

Essentially, any personal property left on the premises must not interfere with the pleasure and usage of a large portion of the property. Suppose there are tenantable occupiers who are residing on the premises at the time of contract and wish to retain their tenancy after the sale is complete. In that case, this is stipulated in the contract and forms part of the terms and conditions.

How to Avoid Vacant Possession Disputes

Before engaging in a property sale agreement, it is very important to carry out a site inspection. This affirms that the incoming buyer is in acceptance and agreement with the seller in matters pertaining to what’s to be removed and what’s to be retained on the property. This will include fittings, furnishings, landscaping, and debris on the property.

Before making the final payment, on the day of completion, it is important for the prospective buyer to inspect the property and confirm that the seller has met his end of the bargain. This helps to ensure that he has performed as expected and agreed.

Remedies to Completion Pitfalls

In circumstances where vacant possession is not given upon completion of the sales agreement, the buyer will have several options.

  • Make a court application for an order for a particular performance, which will require the defaulting party to execute the contract’s terms. Compensation for any damages caused will then be sought.
  • Where the seller has abandoned personal possessions on the premises and is in breach of the contract requirement to grant vacant possession, the buyer is expected to act fairly and use usual negligence rules in relation to the seller’s possessions. Acting the part of an involuntary bailee, a buyer ought to take measures (within reason), to contact the seller to retrieve the things before disposing of them.
  • In the worst-case scenario, following completion, a buyer who feels that the obligation to give vacant possession is no longer enforceable may opt to cancel the sale agreement, arguing that the agreement does not integrate with the transfer. They then have the right to recover deposits paid and claim for damages.
  • Alternatively, it may be more practical to continue with the transaction and complete the transfer without factoring in the violation and seeking compensation for damages.

What Happens If There Are Tenants?

There are two ways to go about this. For starters, it is best if the seller schedules the completion date to fall after the tenancy agreement terminates. This will provide the tenants with enough time to prepare and vacate the premises without interrupting the sale and vacant possession upon completion thereafter.

Where the new owner is willing to ‘inherit’ the tenants, all tenancy-related agreements are made available to the seller to determine if the terms and conditions are suitable. You will need your conveyancer’s intervention at this juncture to ensure you fully understand the entire concept. If there may be discrepancies, clarity is sought at this point. If all are in agreement and the buyer is content, the sale transaction continues, and the buyer then becomes the new landlord. However, it is advisable to have the tenants sign new tenancy agreements with the edited landlord details and signatures.

What Happens During Vacant Possession?

On the agreed-upon date of vacant possession, in line with the stipulations in the sales contract, the seller will ensure that the property is tenantable for the seller, free of occupiers or possessions. Failure to this is considered a breach of contract and there are legally enforceable implications.

In Summary

On the day of completion, all keys must be handed over to the new owner. This will include all key copies. In addition, keys to the garage, lockable windows, back doors, the basement, and the entire property must be handed over. As a seller, nothing should be left behind, not even garbage, unless earlier agreed upon with the buyer. In which case, this must be clearly stipulated in the contract. This is giving vacant possession upon completion.


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