Vacant Possession in Victoria – What It Means and What to Do If the Vendor Doesn’t Move Out
/What Does Vacant Possession Mean in a Victorian Property Contract?
When a property is sold with vacant possession, the seller must ensure:
No occupants remain (whether owners, tenants, or licensees)
The property is clear of personal belongings, rubbish, or goods not listed as inclusions
You, the purchaser, can take immediate and exclusive occupation upon completion of settlement
This requirement is expressly set out under General Condition 10 of the standard Law Institute of Victoria (LIV) Contract of Sale, which governs the majority of residential transactions in Victoria.
Unless the contract states otherwise (e.g. subject to lease), the purchaser is entitled to receive the property fully vacated and ready for use.
How and When Should Vacant Possession Be Delivered?
Vacant possession must be provided at the moment of settlement, not hours later or "sometime that day".
This means:
The vendor must have completely moved out before the PEXA workspace is completed
There must be no tenants or short-stay guests remaining
No unauthorised parties may remain in occupation under any implied or informal arrangement
A common mistake is assuming that if keys are handed over after settlement, the property is vacant. In law, the keys are symbolic—what matters is that the property is actually free to occupy.
The Role of Final Inspections in Confirming Possession
To safeguard against post-sale surprises, purchasers should always exercise their right to a final inspection under General Condition 16.
At Victorian Property Settlements, we strongly recommend:
A formal final inspection 2–3 business days before settlement, and
A follow-up inspection on the morning of settlement, especially where concerns arise (e.g. no visible packing or movement by vendor)
These inspections allow you to:
Confirm the vendor is actively vacating
Ensure the condition of the property has not deteriorated
Document any issues or breaches before funds are released
What to Do If the Vendor Hasn’t Moved Out by Settlement
If it becomes clear that vacant possession won’t be provided, the appropriate response is:
Delay settlement—do not proceed
Notify our office immediately
Allow us to place the vendor on notice in writing, preserving all of your rights under the contract
We will issue correspondence on your behalf confirming:
That vacant possession is a contractual condition
That settlement will not proceed until compliance is achieved
That any delay caused by the vendor places them in default, attracting penalty interest under General Condition 27
That costs incurred by you may be recoverable as a result of the breach
Examples of Breaches of Vacant Possession
These are not just theoretical—they occur frequently. We’ve seen:
Vendors still occupying the home on settlement day
Properties filled with furniture, whitegoods, and personal effects
Contractors or tenants still residing in part of the dwelling
Rental agreements not disclosed or not formally ended before settlement
In each of these cases, the purchaser has the right to delay or condition settlement, and in some circumstances, rescind the contract if compliance is not forthcoming.
What About Proceeding Under Protest?
In limited cases, a purchaser may choose to proceed with settlement but:
Document the breach
Reserve their rights to compensation or legal remedy
Engage us to follow up on costs such as storage, hotel accommodation, or cleaning/removal expenses
This approach should only be taken with legal guidance, and should never be assumed safe.
Where possible, it is preferable to delay settlement and enforce the obligation before title transfers and funds are released.
Can the Vendor Request to Stay On?
Occasionally a vendor may request to remain in occupation post-settlement. This can only occur by:
Entering into a formal licence agreement, signed by both parties before settlement
Setting out terms for duration, access, insurance, indemnity, and rent (if any)
These agreements are rare and should never be implied or left verbal.
David Dawn’s Advice to Purchasers and Agents
“Vacant possession is not a courtesy—it’s a contract condition. If you arrive on settlement day and the vendor hasn’t moved out, you don’t just accept it. You delay, document, and protect your position. Let us do the heavy lifting and place the vendor on formal notice.”
We frequently assist clients by:
Confirming possession obligations
Preparing breach notices or warnings
Negotiating resolutions, licence agreements, or cost recoveries
Ensuring your legal position is preserved and enforceable
Final Thoughts
The concept of vacant possession is simple—but breaches are costly, inconvenient, and legally significant. The safest course of action is:
Inspect early and inspect again
Notify us immediately if anything seems wrong
Never accept excuses or delay without formal conditions in place
Need Help Enforcing or Delaying for Vacant Possession?
Victorian Property Settlements
Trusted for over 25 years by Victorian buyers and sellers.
📍 Based in Frankston | 📞 03 9783 0111 | ✉️ david@quick32.com
🌐 www.victorianpropertysettlements.com.au