Despite the importance of the term vacant possession to both property owners and tenants, the term is not defined in legislation, nor is there a clear Irish authority confirming what is meant by vacant possession. We consider what vacant possession means and its relevance to owners and tenants of commercial real estate.
Vacant possession is a term to describe the usual basis on which a seller must deliver a property to a buyer on completion or a tenant must deliver to a landlord at lease expiry.
Failure to deliver vacant possession has different implications for a seller or tenant dependent on the circumstances. To avoid potential breaches of contract or of lease covenant, sellers and tenants should be fully aware of the terms of any contractual commitment to deliver vacant possession.
Vacant possession is generally of relevance in the following circumstances:
When a property is being sold, as the general conditions of sale state that a purchaser is entitled to vacant possession on completion Yield up obligations in leases generally place an obligation on the tenant to deliver vacant possession on term expiry Break clauses in leases are often conditional on the delivery of vacant possession by the tenant on or before the break option date What is vacant possession?
The term vacant possession is not defined in legislation, nor is there a clear Irish authority on what vacant possession means. There have been a number of cases in the UK where the meaning of vacant possession has been discussed. Simply put, vacant possession means that the relevant person, whether that is a purchaser or landlord, is in a position to enjoy the property undisturbed.
If a seller or tenant continues to use the property in a manner that is inconsistent with vacant possession or if there is an impediment, physical or otherwise, to enjoying the property, vacant possession may not have been delivered.
The UK courts have held that vacant possession was not provided in the following circumstances: People:
A tenant's workmen remained on the property after a break date to attend to repairs. This was notwithstanding that the tenant had sought permission, albeit without response, to completing the work after the...