Cut the risks of a vacant property with DTZ’s advice
Some helpful advice for landlords of vacant commercial property this week, from DTZ. With the number of vacant properties on the rise amid the economic downturn, the firm has taken a look at how to reduce the risks associated with an empty commercial property of any type.
Colin Bailey, associate director in DTZ’s corporate real estate management team, says landlords, property holders, investors and developers all face management problems and increased risk when a commercial property to let becomes vacant. If an empty property is not managed properly, this could lead to expensive repairs and even possibly to litigation. And it is important to keep a vacant property in a reasonable condition in order to attract new tenants or occupiers.
It is often a legal requirement to tell your insurer when a building becomes vacant, either partly or fully. DTZ advises that you check the terms of your policy as soon as a property becomes empty, to make sure that the building is adequately covered. If your landlord insures the building, you should also check your lease to find out whether you have a contractual requirement to notify the landlord when the property becomes vacant.
There are obvious risks associated with the security of an empty property, and also risks relating to problems caused by defects such as leaking pipes. There is often an insurance requirement to carry out routine inspections of a vacant building by the owners, DTZ notes. “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. Other security measures include perimeter fencing, CCTV monitoring, alarms and security screens,” the firm adds. Central heating and water systems should be drained down to prevent damage from freezing in the winter, or heating systems should be set at a low level to tick over continuously, to prevent burst pipes and other damage.
It is important to keep records of keys – when they are handed out to agents or contractors, for example – as they “all too often” go missing or cannot be found when they are needed in a hurry. You should tell utility companies, the police and fire departments when a building becomes vacant, and give them key-holder information in the case of an emergency. This key-holder information should also be given to the security company if there is an alarm in the building.
Make sure you keep up the maintenance of systems and equipment such as sprinklers, fire extinguishers, boilers, and smoke alarms. “It would be advisable to ensure regular maintenance inspections are continued to keep the property in reasonable condition to attract new tenants or occupiers,” DTZ adds.
Finally, don’t forget that your empty property might be eligible for full exemption – or an exemption period – for rates while it remains unoccupied. “You should contact your local authority to discuss what empty rates relief you are entitled to,” DTZ advises.
