A recent case has demonstrated the importance of a tenant vacating their property correctly.
The case related to a dispute between a landlord and tenant over the exercise of a break clause in a lease. One of the requirements was that the tenant gave vacant possession of the property on or before the break date. The Court found that the tenant had not complied with the clause as they had failed to give vacant possession.
Vacant possession – what does it mean?
Vacant possession is the requirement for a tenant to leave a property empty. This means empty of both people and a tenant’s possessions. Vacant possession will not be given where there is an impediment that prevents or interferes with a landlord’s own right of possession of whole, or part, of a property which a tenant had been occupying.
How is this achieved?
All people must be out. This means that the tenant must not carry out any further works or activities at the property following the date on which vacant possession must be given to the Landlord.
In previous decisions the Court has found that a tenant failed to give vacant possession as staff returned to complete works at the property following the break date of a lease, but in another case security staff of a tenant were allowed to remain following a break date to ensure the property was secure.
This shows that being vacant of people is a factual question, with Courts looking at individual circumstances to assess this requirement.
However, it is the second requirement – to remove all possessions – that can often prove to be the more difficult element to satisfy.
A tenant must remove all those possessions which are deemed to be chattels, or ‘personal possessions’. Also, depending on the wording of the lease and any licence, more fixed features with a higher degree of annexation to the property called ‘tenant’s fixtures’ may also have to be removed.
If rubbish, construction materials, office equipment or personal goods remain in the property, it may be deemed that the tenant is not giving the landlord full use of the property. All sets of keys should also be returned.
The Riverside Park case
The latest case shows the distinction between a chattel and a fixture is not always clear.
The tenant believed it had given vacant possession, but the landlord disputed this as various partitions and other items remained in the property. The landlord also noted that a licence had been granted to a former tenant to carry out adaption works, including installation of partitions.
The Court believed the partitions and other items amounted to chattels as they were: (1) demountable and not sufficiently attached to the property so as to be fixed, and (2) installed by the tenant for its own benefit and business need. The various items were found to restrict the landlord’s use of the property.
The Court added that even if the items could be classified as fixtures, they would be tenant’s fixtures, and the definition of “the Premises” in the lease excluded tenant’s fixtures. So either way, vacant possession of “the Premises” had not been given.
As the tenant failed to give vacant possession, the break clause was not exercised correctly and the lease continued to exist.
A point to remember
These cases demonstrate that a tenant’s obligation to give vacant possession may not be as clear as you might think.
It is important to remember that any alterations or works carried out to a property which may have been agreed at the start or during the lease can also cause complications and disagreements further down the line.
Care should be taken and advice sought to avoid the additional time and costs that can occur due to a failure to deliver vacant possession.
This post was edited by Chris Adams. For more information, email firstname.lastname@example.org.
 Riverside Park Ltd v NHS Property Services Limited  EWHC 1313 (Ch)
 NYK Logistics (UK) Ltd v IBrend Estates BV  EWCA Civ 683
 John Laing Construction Ltd v Amber Pass Ltd  L. & T.R. 12
 Hynes v Vaughan (1985) 50 P&CR 444
 Jones v London Borough of Merton  EWCA Civ 660
  above.