Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.

The term ‘Vacant Possession’ is one of the most commonly used terms in the property industry.

A tenant taking a property letting will expect the landlord to give vacant possession and, by the same token, a landlord will expect the tenant to give vacant possession when the agreement (tenancy) comes to an end (either at the end of the term or through the exercise of a break).

A property investor or a developer, acquiring a new building or a site for development may want a vendor to deliver up vacant possession. This is important if he/she intends to redevelop or demolish an existing building. But what does vacant possession actually mean?

A people and chattel-free zone
Vacant possession means that the property must be empty or free of people – unoccupied.

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In NYK Logistics (UK) Limited v Ibrend Estates BV (2011) it was held that because some workmen remained in a property to finish off some works after the break date, the tenant had not given vacant possession and the break failed.  This was in spite of the tenant having informed the landlord in advance.

Vacant possession also requires the property to be empty of chattels such as furniture and boxes.  The test here is whether the chattels left behind substantially interfere or prevent the enjoyment of the right of possession for a substantial part of the property.

As an example a small number of empty pallets and dismantled racking in a large warehouse didn’t cause problems for the tenant in Legal & General Assurance Society Limited vs Expeditors International Limited (2006) but, on the other hand, when the seller in Cumberland Consolidated Holdings Limited v Ireland (1946), left a substantial amount of rubbish there was a breach of the vacant possession condition.

Top tips for vacant possession
So, if you need to give vacant possession what are the top tips?

  • Make sure there is no one left at the property after the date when vacant possession should be given;
  • Make sure there is no furniture left at the property – if in doubt remove it;
  • Make sure there is no one else with an a right to occupy, for example, make sure any lease, sub-leases and licences have been terminated; and
  • Make sure you hand over the keys.

Legal impediments to vacant possession

In a straightforward case, vacant possession means absence of people or chattels. However, there are several examples where a breach of vacant possession has been caused by an outstanding legal claim – and there have been some very obscure ones over the years.

In 2000, a Mr Baylis sold land with vacant possession, which fronted a main road. It subsequently transpired that the Highways Authority claimed the land had been dedicated as a highway for road-widening work and therefore Mr Baylis was not in a position to sell it with vacant possession. The purchaser successfully sued for damages.  In another case, a ground floor flat in a house was sold with vacant possession. Unfortunately, a clause under a relevant Housing Act meant that only one household could occupy the whole property and as the first floor flat was occupied, the seller was not in a position to give vacant possession.

The moral of the story is to ensure that any potential legal claims are thoroughly investigated and not just rely on an empty building.

Article Courtesy of: James Richards, Real Estate Solicitor with Wright Hassall LLP.

Please Note: This Article is 4 years old. This increases the likelihood that some or all of it's content is now outdated.
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1 COMMENT

  1. With respect, I think the information in your article could if taken literally be misleading.

    Where the lease contains a break clause whereby termination of the tenancy on a specified date is subject to compliance with conditions, one of which I am assuming for purpose of this comment is vacant possession, that termination would only be effective if vacant premises were given, and if the case-law to which you refer applies. If the conditions were not satisfied then the landlord could impose continuity.

    When a lease comes to an end on expiry of its contractual term or any statutory continuation thereof and the tenant does not renew or serves notice to quit, the tenant’s right to quit the premises on expiry of the contractual term or notice to quit is not invalidated if he fails to give vacant possession. The landlord cannot impose continuity regardless: the conditions for vacant possession that might apply to a break clause termination do not apply on expiry of the lease.

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