Vacancy in an apartment building: handover of vacant units, reletting and assurances

Vacant units in an apartment building are both an opportunity and a risk. The buyer plans reletting at market conditions, the seller wants the empty-unit price to be realised and the running tenancies should not be disturbed by the interim period between signing and closing. Between these interests sit precise handover duties, evidence questions and a deliberately limited power of disposition for the seller.

This article addresses the questions that are specific to vacancy. It describes evidence of vacancy at the effective date, the mechanics of vacating, keys and inventory handover, the reletting mandate during the interim period and the drafting of assurances and guarantees. Questions of full tenant turnover in continuously occupied units are covered in a separate article.

Why vacancy is its own review layer

If a unit is presented as vacant in the data room, expectations shift. The buyer values the option to re-let at market conditions rather than the continuing rent from an occupied unit. The seller then promises not only the transfer of a property but a physically and legally available empty unit. That statement is legally more demanding than a simple description of the stock.

For that reason vacancy belongs in a review layer of its own, with a clear separation of evidence, handover and interim phase. Tenant turnover questions for continuously occupied units are collected on the topic page rent roll and lease agreements. This article stays strictly within vacant units.

Evidence of vacancy at the effective date

Proving that a unit is actually vacant and freely accessible at the effective date requires more than a statement in the sale contract. A layered evidence chain is useful: recent photographs, floor plan with complete rooms, confirmation of vacating by the seller or the property manager, meter readings, termination or vacating instrument and a handover record with date and participants.

For the buyer, the strength of that chain matters in a dispute. For the seller, a complete evidence chain protects against later claims that the unit was in a different state on handover day. The documentation standards on the topic page handover and effective date provide a useful template.

The distinction from purely alleged or factual vacancy is essential. The physical absence of a tenant alone does not make the unit legally free. What matters is whether tenancy or use rights are still in force, whether keys have been returned and whether handback has actually occurred. Where those elements are outstanding, the assurance of vacant delivery should be tied to a specific event, date and responsibility.

Vacating, contract termination and open claims

For units still to be vacated, the legal termination and the physical vacating should be treated separately. Without effective termination the lease continues even if the tenant has left the premises in practice. A defensible end position arises from an agreed termination, a vacating settlement, a valid notice followed by actual vacating, the expiry of a valid fixed term or a documented handback of the premises to the landlord. The appropriate scenario depends on the circumstances of each case.

For pending vacating the sale contract should address the current status, the expected end date, who owes the vacating and the consequences of delay. Grace periods, purchase price retentions and an obligation for the seller to pursue the eviction actively may be considered. Related topics on judicial termination are collected on the topic page rent roll and lease agreements.

Open claims such as arrears, deposit, compensation for investments or residual receivables must be allocated. A clean transition model separates the claims and duties that stay with the seller from those which pass to the buyer at closing. Without such allocation, disputes between former and new landlords are likely.

Keys, inventory and condition of the unit

On handover of vacant units, all keys, cylinders, access codes and alarm codes must be transferred. A numbered key list with recipients avoids later doubts. If cylinders need to be exchanged, the timing belongs in the handover record. For commercial units, IT access, alarm packages and maintenance contracts also matter.

The inventory should be clearly allocated in the handover record. Remaining fit-outs, removed furniture, retained signage and their condition are frequent points of friction. For valuation, the question is whether an additional dismantling or restoration is expected and whether the seller performs that work.

The condition of the unit should be documented with photographs, floor plan and a defect description. For the buyer, it is important that the unit is delivered in the condition the contract describes. For the seller, an explicit description protects against later allegations. Without a handover record, evidence in a dispute becomes materially harder.

Interim period and reletting mandate between signing and closing

Between signing and closing a period usually remains during which the seller still manages the property. For vacant units the sale contract must regulate whether the seller may sign new leases. Without a rule, a later letting will bind the buyer under the principle that a sale does not break a lease, even though the buyer did not select the tenant.

Sensible drafting ranges from a complete interim lock to a consent requirement with clear criteria and a threshold approach for standard leases. Criteria may include minimum rent, deposit, creditworthiness, term, intended use, operating duty and exclusion of high-risk clauses. Consent should be given within a defined period so that the seller cannot claim loss of letting opportunity.

Consequences of a breach must be specified. Rescission rights, price reduction, damages or an obligation on the seller to terminate a non-consented letting at their cost are among the options. Only with clearly drafted consequences does the interim rule become effective.

Assurances and guarantees on vacancy

Assurances and guarantees for vacant units should be drafted in layers. Sensible layers cover vacancy at the effective date, the absence of un-terminated leases or third-party rights of use, the complete handover of keys, access authorisations and traces of use, and the absence of public law obligations that would prevent letting.

The seller should avoid blanket assurances if physical vacating is not yet complete. A statement tied to the closing date with a transition clause for delay is more precise. The buyer can secure the position through purchase price retention, rescission on continued delay or damages.

In warranty terms, vacancy is an agreed characteristic within sections 922 following ABGB. If the reality differs, cure, price reduction and, in extreme cases, termination of contract come into play. The contract can specify these rights but cannot arbitrarily curtail them in consumer settings. The apartment building risk check supports prioritisation.

Refurbishment, maintenance and reletting after closing

Where reletting is planned after closing, refurbishment and maintenance become material. The buyer needs to know whether the unit requires alterations, energy upgrades or standard residential refurbishment before it can be re-let. The data room should disclose which maintenance work is outstanding, which permits are pending and which conditions apply.

Contract clauses should regulate responsibility for the condition on handover and for maintenance obligations up to that date. After closing, the buyer takes on the landlord role for future leases. Related questions on outstanding maintenance are collected on the topic page old building renovation and maintenance.