What does "Vacant Possession" mean ?

Gaz

Looking at a house online and there is a big disclaimer saying ..

* PLEASE NOTE THAT THE PROPERTY IS NOT BEING SOLD WITH VACANT POSSESSION *

What does this mean exactly ?? There is already a tenant in the house or something ??

robd

Gaz wrote: »

Looking at a house online and there is a big disclaimer saying ..

* PLEASE NOTE THAT THE PROPERTY IS NOT BEING SOLD WITH VACANT POSSESSION *

What does this mean exactly ?? There is already a tenant in the house or something ??

Ah, the house in Clontarf.

Means there is a tenant present. To be more specific it's likely to mean that there is a long term tenant in situ, who comes under different laws to the standard tenancy act, and as such they cannot have there lease terminated. There are strict rules on rent reviews. The old rent control laws.

Given the asking price of 185 I'd guess the rent is prob circa 500 per month and they have a 20 or 35 year or life time lease. That's a 3.5% yield which is obviously crap but about what houses are currently priced at vis-a-vis rental income.

You'd need to ask the agent about the tenant and what the rent is. Basically you can't live there though.

Article on rent control here.

http://archives.tcm.ie/businesspost/2002/06/30/story521083628.asp

Gaz

Yeah, I was wondering why the house was so cheap .... makes sense now.

Thanks

potsy11

This can be a good thing in terms of investment.

You get the house at well below market price (whatever that is currently).

Forget about it if you are looking at buying for Private Residance.

You may have to wait for the tenant to die before you can take full possession.

I would doubt very much if you will be able to find a bank that will lend on it.

20goto10

It simply means there's a tenant in the property which you obviously need to be aware of when viewing the place as they're not going to clean the place prior.

I don't know where this clap trap above is coming from. You will not be stuck with the tenant (unless you want him of course). The tenant will have to move out on settlement, provided he has due notice.

In otherwords, they're keeping it rented while it's on the market.

robd

20goto10 wrote: »

It simply means there's a tenant in the property which you obviously need to be aware of when viewing the place as they're not going to clean the place prior.

I don't know where this clap trap above is coming from. You will not be stuck with the tenant (unless you want him of course). The tenant will have to move out on settlement, provided he has due notice.

In otherwords, they're keeping it rented while it's on the market.

In which case the house would be priced at market rate of €500+k rather than €175k and the house would not be being sold as non-vacant posession.

http://www.myhome.ie/residential/search/brochure/47-vernon-avenue-clontarf-dublin-3-clontarf-dublin-co&-city/BGYPH420724

You cannot give notice to a tenant with a rent controlled lease, it's like a commercial 25 year lease. It's specifically not covered by the residential tenancy act. See http://www.prtb.ie/DownloadDocs/Residential%20Tenancies%20Act%202004%20-%20A%20Quick%20Guide.pdf
Page 2 details what's not covered.

I'm afraid you're totally wrong here.

And if you could give the tenant notice, then that house would be sold, cause I would have bought it for €175k the day it was advertised, for cash.

potsy11

20goto10 wrote: »

It simply means there's a tenant in the property which you obviously need to be aware of when viewing the place as they're not going to clean the place prior.

I don't know where this clap trap above is coming from. You will not be stuck with the tenant (unless you want him of course). The tenant will have to move out on settlement, provided he has due notice.

In otherwords, they're keeping it rented while it's on the market.

You do not have a clue what you are talking about. OP - disregard above. I think I know exactly what I am talking about seeing that I was part of an investment group that bought 10 of these 'sitting tenant' properties.

Pat Mustard

Robd is spot on.

The house would be sold with vacant possession if the tenant was going to be moved out prior to the closing of the sale.

jdivision

Exactly, robd has it exactly right. There was a similar case recently on Prince Edward Terrace albeit that house was only part-occupied by the sitting tenant.
http://www.independent.ie/national-news/buyer-snaps-up-a-bargain--and-tenant-1929955.html

20goto10

After seeing the property and price, I take what I said back. But I would still suggest you ask them. Fire off an email saying you are interested as an owner/occupier and the property must be vacant before signing contracts.

btw, the scenario I was suggesting does happen.

eth0_

Under what circumstances would someone have that sort of a lease? Are those sorts of leases still issued?

JuliusCaesar

Post 2 gives a link to info on the old leases. No, they don't exist anymore.

But people have 'bought out' sitting tenants......for fairly large sums of money.

EKRIUQ

eth0_ wrote: »

Under what circumstances would someone have that sort of a lease? Are those sorts of leases still issued?

If the owner of the house died and left the house to a relative but gave lifetime use of the house to the occupant.

Where I've seen this happen was a man died but had left the house to a daughter who already had another house but gave his son lifetime use of the house until he died or decided to move out. This way he was looking after the interests of his son by giving him a roof over his head but the son couldn't sell the house and drink the proceeds.

Possibly that's what the above scenario is.

potsy11

eth0_ wrote: »

Under what circumstances would someone have that sort of a lease? Are those sorts of leases still issued?

Institutions and organisations used to buy up houses (years ago) and house their staff or patients in them. Some put on short leases orther put on long leases and others again put on lifetime leases.

This means that the owner of the property can change as many times as you like but the tenant has rights as per that (old) lease. Some of the leases may have stipulated that if the house was to be sold that the lease was then terminated (a bit like all residentail leases nowadays).

The liftime leases were generally given to vulnerable families etc.

Example: The mater hospital bought up a large amount of properties in and around the North Circular Road. The Mater has been around for 150 years and so have some of the houses. The mater would then housed some of their staff and patients in these houses. Over time patients (who were dependant on the hospital) and loyal staff were offered lifetime leases in the properties.

Over time and during the early years of the boom the hospital started auctioning off portfolios (8-10 properties at a time) to private investors. This was to raise funds for the hospital and get what were poorly kept houses (needing repair etc) off thier books.

loyatemu

JuliusCaesar wrote: »

Post 2 gives a link to info on the old leases. No, they don't exist anymore.

But people have 'bought out' sitting tenants......for fairly large sums of money.

what would that house be worth under normal circumstances though - got to be at least 400k. If you bought it for 150k you'd have a fair bit of cash left over to try and buy out the lease (though obviously you'd expect the existing owner to try this prior to putting the house on the market)

robd

loyatemu wrote: »

what would that house be worth under normal circumstances though - got to be at least 400k. If you bought it for 150k you'd have a fair bit of cash left over to try and buy out the lease (though obviously you'd expect the existing owner to try this prior to putting the house on the market)

Perhaps. Older people tend not to like change though. They'd often prefer to live out their years in a large run down hovel over a swanky new place that much better meets their needs.

Yep 400k would seem about right. Last asking was 495k
http://www.myhome.ie/residential/search/brochure/26-vernon-gardens-clontarf-dublin-co&-city/WMCHY343762

shoegirl

potsy11 wrote: »

You may have to wait for the tenant to die before you can take full possession.

These leases date back to the early 1970s so even if the tenant was 18 when he/she moved in, they cannot be any younger than 58, and more likely a few years older than that, you might not be waiting so long, unless they live to 85 or something huge like that.

As a long term cash investment, not bad really.

robd

shoegirl wrote: »

These leases date back to the early 1970s so even if the tenant was 18 when he/she moved in, they cannot be any younger than 58, and more likely a few years older than that, you might not be waiting so long, unless they live to 85 or something huge like that.

As a long term cash investment, not bad really.

Leases can be inherited though.