What does vacant possession mean on settlement?
You’re thinking about selling your home. You’ve had a chat with a real estate agent. They mention that the property will be sold with ‘vacant possession’. You nod and agree, because it sounds straight forward enough. That just means no one’s living at the property after settlement day, right? Well, not quite.
Vacant possession is one of those terms which sounds simple enough but can catch both buyers and sellers off guard, often very late in the transaction.
So, what does ‘vacant possession’ actually mean?
When a property is sold with vacant possession, the buyer is entitled to unimpeded use and physical enjoyment of the property once settlement is completed. In practical terms this means the purchaser should not be left dealing with anything physical which gets in the way of them using the property as they intended.
Does that mean you, as a vendor, cannot leave any physical items behind? As with many legal questions, the answer is: it depends.
A good starting point is understanding what is included with the property as part of the sale and purchase, ie. the chattels, fixtures and fittings that form part of the sale. The uncertainty usually arises when items don’t clearly fall into one of those categories.
Does vacant possession mean the property must be completely empty?
Vacant possession is not about ensuring the property is entirely empty at all costs. Rather, it’s about making sure the buyer can take over the property without unexpected obstacles, unwanted items, or anything that substantially interferes with their use and enjoyment of it.
Whether an item can remain on the property depends on what it is, what the agreement says, and what the parties understood during the sale process.
If you’re unsure what vacant possession means for you and the property you are looking to sell or buy, it’s best to get advice early.
The importance of getting early advice.
Whether you are a vendor or purchaser, a short conversation before entering into an Agreement for Sale and Purchase can save a lot of stress, time, energy (and potentially cost!) later.
Give us a call and let’s discuss the ins and outs of your situation, with a view to finding a practical solution together.
Carla Rule and Sarah Cathcart are part of our Property team at Norris Ward McKinnon.
