This can be a real problem that people are not even aware of, or if they are, have no idea of how severe the consequences are when it goes wrong.
That’s your building insurance cover when the property is vacant with no one in occupation.
Of course even when a building is in regular use there may well be certain conditions that the insurers state, maybe after an inspection or just part-and-parcel of the cover. Maybe regular electrical tests and informing them of any material changes.
But when the property is empty, things get serious, which you can understand from an insurer’s perspective. The risk of a claim sky rockets here, not only from a higher chance of people breaking in with no one there, but when no one is present then problems can’t be quickly resolved.
Premiums can therefore increase, particularly over time. But more importantly, they can bring in more conditions and requirements to help reduce the risk.
And if these aren’t completed, then if there was a claim then this may well affect the outcome, meaning worst-case scenario you don’t receive a full pay out.
What to Watch Out For
Therefore, here are some pointers to be aware of to get this right. This will mainly affect property owners of course who are arranging building insurance cover, but they can still involve tenants who are in occupation who need to behave themselves, and middle-men like managing agents or insurance brokers who are involved in arranging cover and compliance.
Whilst the actual insurance cover and any property documentation will affect what you need to do, these are some general trends and common factors to bear in mind.
There is a mixture of just general angles to consider as well as actual things to be doing – as ever with good property management, you’ve got to be thinking about all kinds of things.
1. Lock Up Tight
It’s common sense to make sure the whole property is tightly secured, not only the main entrance doors but all other doors and making sure windows are firmly closed.
This may require additional internal-locks in order to prevent any easy break-in from outside.
2. No Combustibles
Fire is of course a big issue, therefore making sure nothing is inside that can either first ignite such a fire or make even worse if one did begin.
This involves obvious items like gas bottles and canisters, but also anything like paper, card and even upholstery and furniture that could go up with a bang.
3. Utilities Turned Off
The biggy is gas, but also water can be important in colder winter periods with the risk of freezing and breaks, and people breaking in to take pipes out. Electricity cut-off can also be required, particularly with more risky scenarios.
Make sure you’re clear how far turning off goes, and with water whether a full drain-down of pipes is expected, and for electricity seeing if some form of power is still required for security alarms and lighting to still work.
4. Security Alarm
A classic one to try and alert of any break-ins, although there are two important aspects to not forget.
Firstly, to ensure there is a power source, or if not then consider battery operation (and regular checking that they don’t run out of power).
Secondly, to see if any remote-connection is required through say a phone line or even with mobile technology nowadays, as a triggered alarm is not much use unless it tells someone off-site to do something about it.
As an aside, don’t confuse these intruder alarms with fire alarms, which in fact may not need to operate with no people regularly using the property now.
5. Letter Boxes Sealed
A simple fix, but making sure these are closed so that no one can place anything dangerous through them. And make sure you check all doors and open ways, even cat flaps, say, on other doors.
6. Generally Safe Condition
Even with a dilapidated property with no plans to re-use, insurers may still want any obvious dangers dealt with in case anybody on site gets harmed, even those breaking in with no authority to.
So whether that’s broken glass on the floor or signs of building façade cracking, get the basics done safely
7. Regular Inspections
A classic one after a period, that someone checks the building, say, every week. This will need to be a proper walk-around, and a must to get this documented.
This can add up in terms of resources, with managing agents and specialist vacant-property businesses needing to raise a charge for this
8. Occupier Communication
Keeping others informed is key, whether they’re occasionally inspecting the property or they technically still have a legal interest.
Even a lease with a tenant should oblige them to tell the landlord and insurers if empty for a long time rather than just left unattended.
9. Reduced Cover
Watch carefully for any reduced cover that insurers make, maybe after a certain period of time or if certain things are not done.
These conditions placed on vacant-property cover are therefore essential to get completed and correctly logged to deter this from happening.
The paperwork is important, whether that’s a paper trail of what actions are taken for the insurers or leases and licences in place being correct.
Also, the agreement with any managing agent is important to determine their roles in this important vacancy period.
Keeping Insurance Cover When Vacant
As you look at the reality of a property being empty for whatever reason and for however long, it’s important to be crystal-clear what the building insurers require, after all they will need to pay out when things go pear-shaped.
These above pointers will help consider what actual action may be required on site, as well as general factors to look out for. Drilling down into what the actual insurance policy states and into any property documentation like leases and agreements will of course dictate what’s needed, therefore get all this bottomed-out before you’re in the situation.
You then simply need to implement, ensuring everyone is involved, everything is documented, and everyone can sleep well again at night.
Need More Help?
Claim your FREE Property Management Pack here – including a 15-point Property Deal Cheat Sheet, and Introduction & Chapter from our amazon-best-seller book, the Property Management Guide.