Byline: Colin Bailey
Since the economic downturn the demand for commercial property of all types - retail, office, industrial - has significantly reduced. This combined with a significant number of business failures has lead to a significant increase in the number of vacant properties in the UK. Currently over one in 10 high street shops are vacant.
Landlords, property holders, investors and developers all face management problems and increased risk when a commercial property becomes vacant. Failure to manage vacant property correctly can result in expensive repairs, unnecessary costs, management problems and potential litigation and costs. The other concern is to keep the property in a reasonable condition in order to attract new tenants or occupiers.
So what can landlords do to reduce these risks, issues and property management headaches? Insurance If you, as owner, insure the property it is more than often a legal requirement to inform your insurer when that property (in part or whole) becomes vacant. You should check the terms of building insurance policy as soon as the property becomes vacant to make sure the building is adequately covered. Failure to notify your insurer can either invalidate or reduce the cover on your policy as vacant property is generally more costly to insure and requires additional cover.
If your landlord insures the building you should also check the provisions of your lease to identify whether there is a contractual requirement to notify him when the property becomes vacant. To avoid potential litigation it is always best practice to notify your landlord in writing as soon as the property becomes vacant.
Vacant property inspections and security Vacant properties run a far higher risk of attracting squatters, trespassers, criminal damage, arson or theft. Also, on vacant properties, defects such as leaking pipes run a far higher risk of causing significant damage and cost to a building owner if left unattended. It is also worth mentioning that there is often an insurance requirement to undertake routine inspections on vacant properties by building owners.
As soon as a property becomes vacant a regular inspection and security regime should be implemented to minimise the risk of criminal action or damage to the building and to ensure that standards are maintained. …