At a glance
- With an estimated 20,000 squatters in the UK, unlawful occupation is one of the biggest risks owners face when leaving property empty
- Other risks facing your property-owning customers include theft, vandalism and accidental damage
- We explore some of these key risks and provide strategies on how to mitigate them
There are an estimated 600,000 unoccupied homes in England, according to a recent report from the Empty Homes Agency. In addition, it is estimated there is enough vacant commercial property to create a further 420,000 homes.
Reasons why properties are left vacant vary – from owners being unable to find a tenant, to the need for substantial refurbishment before they can be sold or let. Occasionally, in areas where property prices are rising rapidly, commercial premises are left vacant to accumulate in value, because the costs of letting may actually outweigh the building’s rental value.
Whatever the reason, vacant properties may carry additional risks for property owners, particularly when left empty for long periods of time. We examine some of the main risks below, and what your customers can do to mitigate them.
Although the Government does not keep official figures on the number of squatters in England, the most recent estimate, made by the Ministry of Justice in 2012, put the figure at around 20,000.
In 2012, a new law was introduced, making squatting in a residential property a criminal offence, punishable by up to six months in jail or a fine of up to £5,000.
However, squatting in commercial properties is not a crime and the process of evicting squatters using the civil courts can take several weeks and incur substantial legal costs. Evicting unlawful occupants can therefore be an expensive annoyance for commercial property owners.
Theft and criminal damage
Even if a property owner does manage to evict squatters, or if they have left voluntarily by the time the owner comes to sell or let their property, it is possible that significant damage may already have been caused, either by squatters or other trespassers.
Vacant properties can be at increased risk of crime. Theft is a significant risk, not just of contents but also of fixtures and fittings, such as pipework or boilers, which can be expensive to replace.
Another significant risk of damage in vacant premises is water damage. If a building is unoccupied for several months without regular inspections and maintenance, there is a significantly increased risk of water damage, for example from burst pipes, or a small water leak that goes undetected and becomes more serious.
Under the Defective Premises Act 1972 and Occupiers Liability Act 1984, property owners have a duty of care to protect anybody who sets foot in a vacant property (including estate agents, surveyors, members of the emergency services, trespassers and vandals) – from hazards or defects that might cause them harm.
If somebody was injured, or a neighbouring property suffered damage, as a result of a defect in a vacant building, a legal claim could be made against the owner.
Mitigating the risks
So, what should property owners do to lessen the risks outlined above?
The first step should be to carry out a thorough risk assessment. The nature of this appraisal will vary depending on the type of property, but it should cover:
- How easy it is for intruders to gain entry and remain undetected
- Whether there is anything in the property likely to attract thieves, and how secure items are
- Whether there are any hazards or defects that could create a risk of injury to others
Security should be a top priority. This means installing good quality locks and burglar alarms, and also considering additional measures such as mobile security cameras. Owners should also ensure a basic level of maintenance of their properties, including removing anything that is likely to give a building the appearance of being uncared for and therefore unoccupied, such as fly posters and graffiti.
Other basic measures that can reduce vacant property risk include:
- Ensuring that wherever possible, utilities and electric systems are switched off to reduce the risk of fire or water damage
- Draining all fuel and water tanks and systems. Arranging for periodic inspections to check for signs of intrusion or evidence of damage or disrepair, e.g. water leaks, or potential hazards such as rubble, protruding nails or live wiring
- Securely closing letterboxes in residential properties. Letterboxes are often used by arsonists to set a building on fire
You should make your customers aware of these risks and help them develop robust plans for managing their vacant properties.
How can Zurich help?
Zurich is the only insurer to offer unlawful occupation cover as standard, as part of our Real Estate insurance proposition. Zurich can also provide additional services where needed; we have a team of Risk Engineers who can give property owners more detailed guidance on how to mitigate the risks of their entire portfolio, including any vacant properties.