Unless otherwise stated, residential property is sold on the understanding
that the present owners will vacate on the financial completion of the sale leaving
the buyers free to move in. In England and Wales, the contracts will make this
matter clear and, once unconditionally exchanged, the seller then has no option
but must grant full possession.
In Scotland, vacant possession will normally
be a condition precedent in the missives. This means that, if not fulfilled, the
disappointed buyer would be entitled to generous damages and full costs although
you will not be able to evict the seller provided he can meet the substantial
financial penalties his refusal to vacate will occasion.
Where a property
is part let, the tenants may have a statutory form of tenancy which does not allow
the owner to require them to vacate. If it were an assured Shorthold this tenancy could run to the end of the agreed term which could be anything from
six months to (unusually) ten years. Whatever, the tenant could leave earlier
but, assuming he pays his rent and observes all the associated covenants (q.v.) he has security until the end of the term when the landlord can obtain
possession in the normal way.
It is possible that the tenants may have
an ‘assured tenancy’ which is not a Shorthold (q.v.). In that case, subject to paying the rent regularly and keeping to the
agreed conditions, the tenant may continue in residence on an on-going basis.
There are certain conditions when a court may agree to grant possession, for example,
if the accommodation is needed for the owners’ own occupation (and it is
his main place of residency), or if a mortgagee seeks to foreclose.
Leaving
these legal aspects aside there is nothing to stop an owner making the tenant
a cash offer to vacate. This negotiation could reflect the increased value of
the property with full, as opposed to part, possession.
In either case,
the property may be offered for sale at any time, but with part possession, it
must be sold subject to the tenancy. That aspect will be valued on an investment
basis and the likely time-scale for full possession. After factoring in this discount
the sale price could well be lower again reflecting the more general inconvenience
of having the on-going tenancy.
