Vacant property management

Richard Pullen discusses the management of vacant commercial properties.

Over time vacant properties can fall into disrepair and they may be subject to environmental damage such as vandalism, squatters, fire, theft and flooding. This can result in diminished demand from potential future occupants and falling property values. The cost of returning such properties to marketable condition can run to significant sums.  If a vacant property is damaged or vandalised it may be more difficult to attract a new occupier, as potential occupiers may have concerns about security and disrepair issues.  A dilapidated, vacant building may take longer to lease, may take time to repair and could attract further vandalism, increasing disrepair.  All of which, could result in extended periods of void, with lost rent for landlords at a time when rates and other outgoings still need to be paid.

Effective vacant property management can mitigate these problems and costs by ensuring vacant properties remain secured, in a good state of repair and meet insurance requirements.  Effective vacant property management also enables the commercial property owner to be best placed when occupier enquiries are received.  

Issues to be considered when managing an empty property include:-

• Notify your insurance company the property is empty and check the policy requirements.  For example, some insurers may increase premiums; reduce cover and/or specify vacancy requirements (such as weekly, documented inspections of building state and fire/smoke alarms and sprinklers).

• Notifying the Police and Fire Service that the premises are vacant and provide them with contact details for the key holder in the event of an incident.

• Notifying neighbours in adjacent buildings; they may be useful for example informing the owners of unauthorised access and other problems.

• Under the Occupiers Liability Act the owner of a vacant property has responsibility to ensure the premises are safe for all persons entering the property.  A regular inspection of all areas should be undertaken to identify and rectify any areas that may have become dangerous or present a hazard to anyone who may use or enter the site.  Particular attention should be given to the perimeter of the site and any means of access to the site and building to ensure these remain safe and secure.

• Consider the utilities and services that may still be required, for example electricity may be required for lighting, lifts and security systems.  However, check with your insurer, for example some insist the electrical supply is switched off.

• It is also advisable to employ a local security company who can hold the keys for the premises under British Standard BS7984 conditions and who can provide a response to site 24 hours a day in the event of an emergency.

• Ongoing maintenance via an appropriate contractor will also help reduce the risk of the site being subject to anti social behaviour such as vandalism; breaking windows; littering; fly-tipping and graffiti. Maintenance services can cover major incidents such as flood, fire and structural upkeep, minor concerns such as mould, decay and gardening that may affect your property and its future value.

• Investing in on site security to be your ‘eyes and ears’ on site is a proven security method, no matter how advanced your security system may be.  Security guards can be on hand when and where needed and can keep the property owner informed about the safety and security of the property.  Security contractors should be accreditated to British Standard BS7858.

The message to all owners and landlords is clear: Effective management is vital to ensure vacant properties remain an income-generating asset and do not incur expensive remedial costs.

Pullen Associates can help with all your property needs.