This is a question to the blog clinic from Eric who is buying a house.
I am purchasing a house with vacant possession and there are people living in it. I don’t believe they have a written tenancy agreement. They are supposedly moving out but what would happen if they didn’t and on completion, I turned up at the house and they were still in occupation?
I should start by saying that I am not (and never have been) a conveyancer so these are just general comments.
First – many people buy properties with sitting tenants as an investment property. However, if you were looking to buy with vacant possession and there were occupiers who were still in occupation at completion, both you and the vendor would have a problem.
The vendor would have a problem as you would have a claim against him for breach of contract. As the property he sold you was not as specified in the contract.
You would be entitled to compensation to put you in the position you would have been in had the contract been performed as agreed – which would mean you would be entitled to recover the costs of eviction and an element for distress and inconvenience.
However, you would be the owner of the property and you would have the responsibility of actually evicting the occupiers. Which could be difficult without evidence of the agreement, or lack of, with the occupiers.
You would need the vendor to give evidence of the circumstances under which the occupiers went into occupation – for example, whether they are squatters or tenants. You will have a problem if the vendor is unwilling to do this.
If the occupiers are tenants, then you may (depending on the type of tenancy they have and/or whether there is a fixed term which has not expired yet) be unable to evict them. For example, it is almost impossible to evict protected tenants under the Rent Act 1977. Presumably, your solicitor has asked about these occupiers and their status in enquiries before contract.
There may also be a problem if the vendor turns out to have no assets as there would be little point in suing him. For example, the property may have had no equity or the vendor may have disposed of the proceeds of sale very quickly.
You do not want to risk this happening – even if the vendor would be able to satisfy your claim I am sure that the last thing you want is to be embroiled in court proceedings.
My advice, therefore, is to refuse to exchange contracts until the occupiers have vacated and to visit the property yourself to make sure of this first. Or if you do exchange contracts make the sale conditional upon vacant possession being provided and put a time limit on it.
You need to be very careful and I would suggest you discuss all this with your conveyancing solicitor before going any further with the purchase.