The two most common places to see this requirement is in a break clause in a lease or on the sale of a property.

The simplest interpretation of vacant possession (“VP”) is to “put the property in a state in which the buyer or landlord can both physically and legally occupy it on the day of completion or the lease termination date”.  An example of a breach of the requirement to provide VP would be if something is left in a property that substantially interferes with the physical enjoyment of the property but which is removable.  For instance, if a large quantity of rubbish has been left at the property to such extent that part of the property is rendered unusable until such rubbish had been removed, the tenant or seller would be found to have breached the condition of VP.  However, It could be different if the rubbish had been left outside the building but still within the boundary of the property.  In a case in 1985, rubbish consisting of a small pile of garden rubbish near a bonfire site together with a neat stack of concrete blocks and some corrugated sheet, an old tree stump, some aggregate, bonfire remains, broken tiles, bricks and concrete and bits of wood. Some builder's rubbish had been left on another area of the acquisition site together with an old fire-extinguisher and an old dinghy trolley. There was also a mound of earth with a few foreign objects in it at the back of the garage, and a quantity of rubbish and other useful items stored in some loose boxes.  The High Court held that the debris comprising the old bonfire sites, garden rubbish piles, compost heaps and manure heaps merged into and became indistinguishable from the soil of the property, and consequently became part of the acquisition site. The other items did not prevent the seller from giving vacant possession. They could only have prevented the seller from giving vacant possession if they had substantially prevented or interfered with the enjoyment of the right of possession of a substantial part of the property.

Compare this case with the case in 2011 where the Court of Appeal found that a tenant had failed to give VP in accordance with the terms of the break clause in its lease because two workmen that it had employed to carry out some works, remained in the property following the break date to finish off the outstanding repairs. The tenant had also continued to employ a security guard for a further week following the break date due to concerns that the property would be vandalised.

Where there is an obligation to give VP which has been breached because chattels have been left on the property, the buyer is a gratuitous (or involuntary) bailee of the chattels (that is, it has taken possession of the bailor's chattels without having given consideration for them). As such, the buyer cannot simply dispose of the chattels but must do what is reasonable in accordance with ordinary principles of negligence.  What amounts to reasonable will depend on the circumstances and may depend, for example, on whether and what opportunity the buyer gives the seller to remove the chattels. This will be subject to any express provision in the contract.

Leases will usually deal expressly with the landlord disposing of any chattels left on the property after the end of the term, because of the duties of a bailee.

Many VP cases end up in the Courts.  So, if in doubt, make sure that you understand the requirements of your contracts and leases before completion and always take legal advice before issuing a break notice on your lease.    If VP is not given in accordance with the contract or lease, the contract can be terminated or, in the case of a lease break clause, the lease will be deemed to continue and the tenant will be obliged to continue to pay the rent.