What is Vacant Possession? A Conveyancing Hot Potato!

It is important to make sure your solicitor is aware of any concerns you have so these can be raised with the other party before you exchange contracts. After contracts have exchanged (which can take place at any time before the completion date), you are legally bound to perform that contract. That means you must do what you have agreed. If you don’t, and fail to fulfil a contract condition, then you could be faced with threats of legal action.

Although, having said that, it is rare for there to be legal action after completion, and usually any disputes are resolved on completion or shortly after. It is however best to avoid any disputes of course. One of the reasons for this is because the costs of taking action for breach of a condition in the contract will mostly likely far exceed the value of any potential claim you may have. The economics of pursuing a claim is a very important factor, not to mention the stress factor. Don’t forget you are in the middle of a house move!

Also bear in mind that the costs you have agreed for your sale/purchase are the costs for the conveyancing work only and may not cover additional work to start pursuing a contested claim that may lead to legal proceedings. So our advice is to take a common sense view of the situation and try avoid post completion disputes.

As an example, let’s say that you as the buyer have just got the keys to your new house, you enter the garage and find various items of junk, eg an old sofa and a chest of drawers that the seller had agreed to remove. This could be argued to be a breach of the contract. but it could take time and money (ie legal costs) to resolve. You are also unlikely to recover the costs of arguing your claim even if you win. At the end of the day, it will probably be cheaper and quicker to just dispose of the items yourself, even though you may have a claim. This may not seem fair, but economics are such an important factor to consider.

We would therefor always advise that a buyer inspect the property as close to exchange of contracts and again before completion.  This will enable you to inspect the general state and condition of the property and also establish if there are any occupiers in the property which have not been disclosed.  The risk to a buyer if an inspection is not carried out is that they may take the property subject to any occupier or goods in the property which can be costly and time consuming to resolve.

If the buyer and seller have agreed any special conditions or agreements which are added to the contract, and the seller fails to fulfil those conditions, the buyer will have more options, but please bear in mind it could be costly and time consuming to pursue.

These options can include:

1. An application to the court for an order for specific performance (enforcing the defaulting party to perform the terms of the contract) and claim damages.
2. Rescind the contract, recover any deposit paid and claim damages.
3. Choose to complete and claim damages.
4. Choose to terminate the contract even after completion has taken place, provided that the buyer has not affirmed the contract. This is because of the obligation to give vacant possession does not merge in the conveyance or transfer but remains actionable after completion (even in the absence of an express non-merger clause)

It is important to note that every contract for sale is unique and will be specific to the transaction in hand. The availability and amount of damages will depend on the circumstances and the nature of the losses.