The conveyancing solicitor in charge of drafting the contract will have to make a mention about the possession details, i.e. if they are in vacant possession or if it is subject to occupational leases. These are to be mentioned through special conditions. Standard pre-printed contract forms purchased from law stationers have these inserted as conditions in the rear pages (if the property is in vacant possession, or is subject to leases and tenancies). The condition that does not fit the case should be struck out. And when the property is sold subject to a lease, copies of these should be provided to the buyer along with the draft contract to enable him to assess the terms of the agreement.
Sometimes, it may happen that a property is mentioned to be in vacant possession, but it is occupied by someone other than the seller. In such circumstances, the occupant should vacate the property upon completion of the transaction. The buyer would also have to be convinced that the occupant does not have a legal interest in the property and equitable interest if any was overreached. It is better to seek in writing from the occupant that he will vacate the premise after sale. Even if the occupant does not stand a chance to claim possession, seeking a letter in writing helps the buyer to avoid problems in the future. This will be revealed when the occupier refuses to sign the agreement. The wordings for such an agreement are laid down in SC 7 of the pre-printed form. It may be as follows:
“In consideration of the Buyer entering into this Agreement, I……….[name of the occupier]……agree:
a) To the sale of the Property on the terms of the Agreement; and
b) Not to register any rights I may have in relation to the Property (whether under the Family Law Act 1996 or otherwise); and
c) To remove any registrations made by me in relation to these rights before completion; and
d) To give vacant possession of the Property on completion.
This could either be included in the contract or slightly modified to be set out as a separate document. If the occupant is not the seller’s spouse or partner, any reference to Family Law Act 1996 should be removed.
However, if the occupant is claiming an equitable interest in the property, he should be appointed as a second trustee of the property. This is a solution.
Photo courtesy: Cindy Funk
