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Property Law

Vacant Possession in Property Transactions-What Does it Mean?

It is a condition of the standard Law Society condition that vacant possession of the property in sale will be handed over on closing. General conditions 17 states:

17. Subject to any provision to the contrary in the Particulars or in the Conditions or implied by the nature of the transaction, the Purchaser shall be entitled to vacant possession of the Subject Property on Completion.

Vacant possession disputes

Occasionally disputes can arise on handover, however, about vacant possession. It may appear self-evident and obvious what vacant possession means but situations can arise which cause tension, disputes, and bad feeling between the parties.

For example, it is obvious that a property should be clear of people but what about objects such as furniture, appliances, old beds, tables and chairs, curtains, carpets, temporary partitions?

The new owner does not want the hassle and cost of having to remove broken and worn furniture, for example, and the vendor may be happy just to let the whole lot go with the house and avoid the cost of organising a skip.

One of the problems surrounding vacant possession is that it is not defined anywhere in Irish law and there is no settled decided authority on the point.

In the UK the question has been investigated by the Courts from time to time, but each case will be decided on its own particular facts and circumstances. At its essence, however, is agreement that vacant possession means the property is free of people and chattels (objects) and the purchaser will be able to enjoy the property from day one.

It may be the case that some contents are included in the sale, and these should be agreed between the parties in advance. But anything over and above what is agreed must be removed.

The upshot is that if the vendor is not able to give vacant possession the purchaser may refuse to complete the sale. Or he may complete and bear the cost of removing rubbish, old furniture, and so forth and then sue for damages including the cost of removals.

The vendor can sue for specific performance of the contract, and completion, if the purchaser refuses to complete on the grounds that vacant possession is not being hander over. In a worst-case scenario one of the parties may seek to rescind the contract and collapse the deal.

Conclusion

If you are the seller it does not make much sense to allow the issue of vacant possession to scupper a sale or to cause an avoidable row to develop between you and your purchaser.

Especially if a skip or a man with a van will solve the problem.