What is ‘vacant possession’? Investment terms explained

What is ‘vacant possession’? Investment terms explained
Jennifer DukeDecember 7, 2020

You may have heard the term “this property is available with vacant possession” or “subject to tenancy”. The term is not limited to residential property and is commonly used to describe leasing situations for commercial properties that are currently on the market.

If a property is available with vacant possession, then it’s available at settlement (usually at midday, or an agreed on time) or when the process has completed for the buyer to move in.

Usually, vacant possession means that it is available without any chattels or tenants in the building. Chattels also includes rubbish, boxes and things the owners are leaving behind without agreeing to. It does not necessarily include fixtures and fittings, especially where these are noted as included in the contract of sale.

The Real Estate Institute of New South Wales describes a case where vacant possession didn’t go quite to plan.

They note that during the cooling off period, the purchasers and vendor agreed to provide the property with vacant possession and so the landlord issued their tenant in the home with notice of the sale and to leave.

The tenant, however, called the property manager and said they would not leave. One thing led to another and it seems the contract had not been altered to include this phrase. This left the new owners facing all the stress of moving the old tenants out of the home, including taking them to CTTT.

Osborn Law explains that the front page of the 2005 edition of the contract for the sale of land includes the information about possession of the property and is where you’ll find out exactly the terms on which you are buying.

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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