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Properties that are temporarily vacant, whether for a few days, a few months or longer, represent a different scale of risk for property and facilities managers or owners, in comparison to occupied premises.
Empty properties are far more vulnerable to everyday risks. For example, flooding and utility leaks – such events may not be discovered until much later, when damage is greater and costlier to repair. The average cost of a domestic flood claim last year was £50,000, but this can easily escalate to six figures if water ingress has been allowed to continue unabated for a long period. There is more likelihood of vandalism and, particularly (but not exclusively) for non-residential sites, of squatting and illegal raves. Additionally, from the most recent statistics available, over 60 fires a day occurred in the UK either inside or next to a vacant property.
Because of these greater risks, insurers set a range of special conditions for vacant units that must be complied.
Critical to ensuring compliance, is the skill of an assessor and the attention to detail of ongoing inspections. An experienced assessor will take into account not only the obvious security weak spots such as access points and perimeters, but also many more details such as the surrounding environment, the internal and external materials apparent on the site (or that could be assumed), and the history of crime or flooding in the vicinity. In addition, the safety of the site – even trespassers have successfully sued landowners for accidental injuries when on empty premises.
Once there is a plan to protect the assets, a range of options exist from the traditional, such as security guarding, through to technological solutions, such as cctv and sensors. More often than not, a skilled assessor will recommend the deployment of a mix of options to find the most cost-effective but best fit solution.
Regular inspections are also often a crucial element in mitigating risk – VPS have a wide experience of incidents that might have led to costly repairs. One disused warehouse we were protecting was targeted for an illegal rave, which VPS helped to prevent. The insurance company informed us that a similar event the previous year had cost them £250,000.
In a case where the roof of a conservatory became damaged by heavy snowfall over a period of days, the insurer rejected the claim, saying that the damage was not covered as an insured event such as storm damage. There had been a significant amount of snow on the roof of the conservatory before the damage had occurred. A one-off event of extreme snowfall would constitute a storm, but this was snow that had built up gradually over a period of days. The claim, and the ensuing complaint to the ombudsman, was not upheld.
This example underlines the importance of regular inspections – VPS carry out over 100,000 a year – and that there should be a recorded trail of inspections.
VPS has also been in the forefront of developing an innovative scheme to protect assets, which is the use of property guardians for vacant units. We have developed a range of best in class services with guardians living in vacant properties under a license agreement. Each property is assessed for suitability, made safe and compliant for occupancy. Guardians benefit from low cost accommodation, and owners benefit from rates abatement, rental income, and security through occupancy.