The importance of vacant possession
Stephen Postlethwaite considers a recent county court case which highlighted the importance of ensuring the property a registered provider or local authority is purchasing has vacant possession.
If a Registered Provider of Social Housing or a Local Authority are purchasing a property, they should always check if they are buying it with vacant possession, or whether as was the situation in the following case, they are buying the property subject to an existing tenancy.
In the recent case of London Borough of Redbridge v G (Romford County Court, 5 February 2025) the Court heard that the Defendant, Mrs G, entered into an Assured Shorthold Tenancy Agreement with her then private landlord on 24 March 2021. The local authority claimant purchased the property in April 2023, with a view to allocate the property to a person on its waiting list.
The claimant thought it was buying the property with vacant possession, but Mrs G was actually still in occupation when the bought the property.
In January 2024, the claimant brought possession proceedings against Mrs G on the basis she was a trespasser, as the property was bought on the basis it was vacant.
So what happened?
The Court disagreed. A tenancy does not cease to exist simply because a property, of which there is an existing tenancy, is sold. Section 3 of the Landlord and Tenant (Covenants) Act 1996 providers that all benefits and burdens of a tenancy passes to the new landlord by way of assignment. Further, Paragraph 2 of Schedule 3 to the Land Registration Act 2002 includes, “an interest belonging at the time of the disposition to a person in actual occupation, so far as relating to land of which he is in actual occupation”, except as specified.
It follows that where an interest in land, i.e. a tenancy, is assigned by the landlord, the new owner is bound by it.
The possession claim was discontinued and the claimant was ordered to pay the defendant’s costs of defending the claim
What type of tenancy did Mrs G have?
It was a secure tenancy because the Landlord and Tenant conditions laid out in Section 80 and 81 of the Housing Act 1985 were satisfied. A tenancy is a secure tenancy for the purpose of that act if per section 80, “the interest of the landlord belongs to one of the following bodies […] a local authority” and per section 81, “the tenant is an individual and occupied the dwelling-house as his only principal home”.
Comment
Despite the circumstances of the case being unusual, it highlights the very important position of ensuring that vacant possession is offered up upon the purchase of a property, if it is your intention that it is to be the case. Not doing so can be a very costly mistake for local authorities and Registered Providers of Social Housing.
Stephen Postlethwaite is a solicitor at MSB Solicitors.
