The importance of Vacant Possession in property transactions

In the intricate world of property transactions, the concept of vacant possession holds significant weight, especially when dealing with properties occupied by tenants. Failing to disclose tenancy details correctly can have profound repercussions on the contractual agreement, potentially leading to disputes and financial losses for both parties involved.

Vacant possession essentially signifies that the property is unoccupied and available for the buyer to take possession of upon settlement. This means the property must be free of any occupants, whether they are tenants or otherwise, and must adhere to the agreed-upon conditions outlined in the contract.

When a property is sold with existing tenants in place, it becomes imperative for the contract to provide comprehensive and accurate details regarding the tenancy arrangement. Failure to do so can result in the assumption that the property will be handed over with vacant possession, potentially granting the buyer grounds to terminate the agreement and seek compensation for the lack of disclosure.

Buyers who find themselves in a situation where tenancy details were not adequately disclosed may pursue compensation for various damages incurred as a result. These damages may include:

• Rental costs for alternative accommodation until the tenants vacate.

• Expenses related to moving belongings to the new property.

• Lost concessions or benefits that were contingent on immediate possession.

• Fees associated with boarding pets during the transition period.

• Compensation for emotional distress and inconvenience caused by the delayed possession of the property.

The financial implications of these damages can escalate rapidly, underscoring the critical importance of thorough and accurate disclosure of tenancy details in the contract, particularly if the tenants are not expected to vacate before settlement.

By ensuring diligent disclosure practices, all parties involved in the transaction are protected, and the likelihood of disputes arising is significantly reduced. Transparency and clarity throughout the process contribute to a smoother and more satisfactory experience for both buyers and sellers, fostering trust and goodwill in the real estate market.

Thank you to Rebecca Petroff from Sunstate Conveyancing for sharing this very important information with us.