Empty Commercial Property – Things to Consider

Clearway
Empty Commercial Property – Things to Consider
Empty Commercial Property – Things to Consider

The volume of unoccupied business premises in the UK has risen sharply, primarily due to companies relocating or switching to a remote work structure following the pandemic.

Fortunately, there are several things you can do to retain your site value and preserve the integrity of the structure, whilst preparing it for a new tenant or resale in the future.

There are definite risks associated with vacant commercial premises, even including your legal liabilities if a trespasser is injured while in your property. We always recommend a proactive approach to mitigate threats you may not have considered, as well as the usual risks like fire and flooding, vandalism and theft.

Insurance for a Vacant Commercial Site

Normally, your lease agreement would require the tenant to manage financial liabilities associated with maintenance tasks, but most landlords will hold basic building insurance.

When a property becomes vacant, you may need to;

  • Purchase a more comprehensive insurance policy.
  • Notify your insurer that the site is empty (and an estimated timeframe).
  • Schedule regular inspections to pick up on essential repairs.
  • Contact your mortgage provider where applicable.

Empty buildings are common targets for vandals and squatters, so while you may believe that your property doesn’t require robust protection due to the absence of contents, in truth it is the opposite.

Some mortgage lenders and insurers have specific exclusions that apply during a void period. You should ensure your property benefits from vacant property alarms and, ideally, regular patrols.

Providing evidence of upgraded security protocols may enable you to negotiate a lower insurance premium or avoid purchasing an additional policy.

risk assessment

Risk Managing Unoccupied Business Premises

Risk assessments play an important part in property management, particularly if you don’t know how long the building is likely to remain empty.

A professional risk assessment ensures you don’t overlook any major gaps, covering areas such as:

  • Ensuring alarms are functional and appropriate.
  • Clearing waste or unwanted items.
  • Arranging periodic inspections.
  • Contacting insurance providers.
  • Managing maintenance tasks.
  • Removing valuable items.

Some of the actions identified through a risk assessment may seem obvious but can make a real difference.

For example, any buildup of unopened junk mail (or where the previous tenant hasn’t updated their address) signals immediately to potential criminals that the site is empty and unsupervised.

Even where there are no high-value items, criminals may target your property for asset stripping, focusing on things like generators, copper wiring, radiators and electrical piping – all of which will cost a great deal to repair or replace and create unwanted hassle and stress for the owner.

Updating Your Business Rates When a Commercial Property is Empty

The next step is to ensure you have contacted your local council or taken action to avoid becoming liable for empty building rates.

Once a site has been empty for three months, you may need to pay full business rates, regardless of whether your tenant usually covers this cost.

There are exemptions, and empty property relief might apply for:

  • Industrial units, such as warehouses, which have an additional three-month exemption.
  • Listed buildings and those rated at under a £2,900 in value.
  • Properties that charities and amateur sports clubs own.

Another solution could be to let out the property for another use, such as storage, which means you avoid empty property rates. However, the rental income would normally be less than you charge for full occupancy.

Protecting Empty Commercial Units from Criminal Entry

As mentioned, empty business sites are a prime target for criminals, including squatters. Illegal trespass can be a huge problem, but has become more common as UK laws have changed to make squatting illegal in residential buildings.

It isn’t as easy as telling a trespasser to leave, since the owner will need to take legal action to evict the unauthorised tenants.

The best way to avoid this issue is to take preventative steps, such as:

If you end up with squatters, we recommend you get in touch immediately; the Clearway Eviction Services team has years of experience managing even the most challenging situations. We provide enforcement agents, rapid responses, police liaison and clearance, plus advice to ensure your property is protected from potential further incidents.

Note that liability can be an important factor; if a trespasser gets injured and you have not taken satisfactory action to prevent them from entering your property, you could be considered legally liable.

Other Considerations in Vacant Commercial Property Management

So many of the simple steps we can take to defend an empty property are easily forgotten, so we’ve summarised some of the actions we recommend to every vacant property client:

General Property Security

  • Seal your letterboxes, set up a redirect, or contact your postal service provider to prevent junk mail from being delivered.
  • Hire a contractor to clear all waste (especially food!). Remember that decay can attract insects and infestations, which can be highly costly to remove.
  • Ensure there is adequate signage, especially if you have live CCTV monitoring, and if there are any trip hazards on the surrounding grounds.
  • Review the insurance requirements, and notify them when you have scheduled guarding patrols and regular inspections.
  • Check that your alarm systems are fully functional with a backup power source – temporary vacant property alarms are an ideal solution as they are wireless and operate on professional-grade batteries.
  • Decide whether to leave your electricity, gas and water connections running or request a disconnection where necessary.

Ongoing Maintenance

  • Review your fire risk precautions, ensuring any alarms or testing systems are working well and powered by a battery.
  • Undertake maintenance tasks to ensure the property is safe.
  • Have your water system flushed and tested to avoid harmful bacteria buildup or disease exposure in stagnant water.
  • Schedule ongoing inspection certificates for gas and electricity – these must be valid and up to date, regardless of whether the property is occupied or not.
  • Check that you have a valid asbestos report and management plan where relevant.

Empty Unit Management

  • Arrange new utility contracts if the previous accounts were held in your tenants’ names. Emergency tariffs can be very steep, so you might choose to remove a meter or switch to the most economical rate.
  • Contact the local authority and discuss options to mitigate exposure to empty business property rates.

By following these steps, you remove most of the severe risks associated with an empty business building and ensure it will remain in good condition, ready for your new tenants to move in.

If you would like further information about any of the vacant property services mentioned here or wish to schedule a professional risk assessment, please contact the Clearway team at your convenience – we secure, monitor and protect.

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