Get rid of that empty feeling by protecting your vacant property

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1 28 May 2011 Get rid of that empty feeling by protecting your vacant property The last thing facilities managers want is a vacant building, but in the current economic climate they re facing significant risks associated with empty property. Nick Tubbs, UK Managing Director, VPS - The Vacant Property Specialists, offers advice on how property owners and managers can mitigate the risks and protect their assets. Weak occupier demand and stalled progress on regeneration schemes and developments has led to facilities managers facing increased risks and costs associated with all types of vacant property. Vacant property is affecting over half of (51%) of property managers and owners in the UK, with vandalism topping the list of concerns*. Government figures show that there are more than 2 million commercial properties in the UK including retail premises, warehouses, commercial offices and factories. It is estimated that approximately 20% of UK warehouses and factories are currently unoccupied and the number of vacant shops in the UK has risen to 40,000. Findings from independent research commissioned by VPS reveal that the problem is set to continue with an average of 84% of property managers expecting vacant property to increase or remain at current levels during With this in mind many facilities managers will be handling portfolios with a significant number of empty properties that have incomplete insurance cover because they are now unoccupied. In order to comply with health and safety, duty of care and building insurance requirements, it is critical that facilities managers carefully manage buildings and legal issues that surface when buildings become vacant. Proper protection is by far the best cure and will guard against the high incidences of arson and vandalism, which are two of the biggest threats to vacant property. According to the Arson Prevention Bureau there are 2,213 arson attacks on buildings in the UK each week and Aviva Group estimates that 2 billion of damage is done to property in the UK through vandalism and arson, with 25% of this relating to vacant property. With this in mind, it s no surprise that loss of income is sighted as the biggest issue by property managers arising from vacant property. However, in the UK over half of respondents were worried about security and compliance with insurance. Empty Property Tax was less of an issue, but still impacted 1 in 4 of the sample. Unexpectedly the results reveal that property owners and managers perceive vandalism to be a bigger risk to vacant property than asset depreciation. Speed is of the essence The best course of action is to take immediate action. All combustible or hazardous material inside and outside the buildings should be cleared and properly disposed of at the earliest opportunity. Failure to do so can expose the owner to potentially expensive litigation by intruders who claim to have been injured on the site and risk serious losses from fires started deliberately or accidentally. 1

2 Turning off the water supply and draining down heating systems is essential to prevent flooding caused by frozen pipes or vandalism. Electricity and gas supplies should also be turned off at the mains unless required to support intruder or fire detection systems. Undertaking a comprehensive risk assessment by a specialist firm will ensure that potential risks are assessed. The assessment should be carried out prior to any application of security measures. Any risk assessment should take account of the layout of the site and its vulnerabilities, the nature and value of the buildings and their contents, and also the location of the site and the area s crime profile. A range of cost effective and innovative solutions can then be employed for vacant property security and surveillance, which can actually help to reduce the hidden costs of vacant property. Choose the right security If the risk assessment requires the doors and windows to be secured, proprietary steel screens and doors are much more effective than plywood boarding and do not offer arsonists a ready-made source of fuel. The screens should be perforated which helps to ventilate the building and ensure that sufficient light passes through for viewings, or work to take place, without the need to remove and refit. Where possible they should be fitted tightly into window reveals for a neat appearance and to eliminate leverage points for would-be intruders. As far as unauthorised entry to a site is concerned it is sensible to protect the perimeter of the site with the erection of temporary fencing, bollards, anti-climb paint and barbed wire. In many situations deployment of electronic security such as one or more SmartAlarms, an innovation introduced by VPS, that leads the market in terms of performance and ease of use. It is entirely freestanding, requiring neither mains power nor a phone line, using instead batteries and GSM mobile phone technology to signal to the monitoring station. It can be installed within hours of instruction and so it is ideal to provide instant security to vacant sites where services are unlikely to be available. Manned security is not always the cheapest method of protecting a site and its contents, but there is sometimes a case for using guards to get a situation under control while longer-term measures are put in place. For longer term security on some large sites, a combination of guards and electronic security is recommended. Once a site has been made secure, it is important to: Monitor the integrity of the security for attempts to gain entry Check regularly for the appearance of new hazards to the public Indentify any essential maintenance matters Be aware of any build-up of rubbish outside premises including fly-tipping and undergrowth Keep squatters at bay Among the biggest concerns for vacant property managers is vandalism and squatting, because where there are empty buildings, squatters soon follow. Squatting poses a risk for approximately 1 in 10 property managers (10.5%) in the UK. According to the Government, there are an estimated 20,000 squatters in the UK. You only have to open a newspaper to see the increasing number of news stories reporting on vacant properties being taken over by squatters. 2

3 A 40m building between High Holborn and Oxford Street was recently taken over by partygoers to host an illegal party. The building was occupied for nearly 48 hours until the trespassers finally called an end to the party, leaving behind a repair bill costing tens of thousands of pounds. Another high profile case saw serial squatters take over two buildings in Mayfair, including the former Mexican Embassy, worth a combined total of 50 million. There have also been documented cases of commercial properties being stripped out, suffering over 150,000 of damage. The basic minimum clean-up bill for a small commercial property, such as a pub, or a three storey house, after being squatted can be upwards of 1,500 for a lock change and rubbish clearance. This figure would increase dramatically for larger properties or where greater damage is perpetrated and does not take into account legal fees, which on average start at around 5,000. With an estimated 100,000 incidents of squatting in the UK, the clean-up bill for property owners and managers could cost 650 million, before taking into account the cost of any repair work. Even celebrities have recently fallen victim to squatting as Madonna s ex husband, Guy Ritchie, found out. He had his 6 million London mansion taken over by squatters while it was being renovated. Reacting to the surge in squatting, the Ministry of Justice is looking at how to strengthen the law to make it a criminal offence. The situation may be set to get worse as cuts to housing allowance set out in the Government s Comprehensive Spending Review take effect. According to research commissioned by housing charity Shelter, over 134,000 households will either be evicted or forced to move as they will be unable to negotiate cheaper rents leading to a rise in homelessness. Vacant or temporarily unoccupied buildings are not only potential targets for squatters or trespassers, but can become a real issue for local communities. While the Government s proposed changes to the law are welcome, they can only go so far to speed up eviction timeframes. The majority of damage to squatted properties takes place within the first 48 hours of the premises becoming occupied, so proper protection is vital. It is currently unclear whether any new legislation will cover commercial buildings, in addition to targeting squatting in residential property. If new legislation protects only residential properties, squatters may begin to target more commercial buildings, causing increased concern and cost for commercial property owners and managers. Be prepared and keep control The most effective way to protect a vacant property and mitigate the risks is to take immediate action when a building becomes vacant. Using a specialist firm will help to make vacant property safe and secure by identifying cost effective integrated solutions for customers, using a combination of technology and manned services to ensure legal and insurance requirements are met. This enables facilities managers to control the financial cost of vacancy and ensure their vacant property assets retain value and become re-occupied quickly. Importantly it also reduces the negative impact of vacant property on local communities and help make areas safer. Do the simple things Property owners and managers can take the following steps to ensure their property is well protected: 3

4 Taking immediate action when a building becomes vacant is the most effective way to protect a property and mitigate the risks associated with squatting. You are required by law to inform your insurer immediately when a property becomes vacant. They may have specific requirements to ensure your building is properly covered. Undertake a comprehensive risk assessment using a specialist company to assess potential risks, such as fire hazards and public liability exposure as well as the exposure to damage from squatters/ criminals. Isolate and shut down the power and gas supplies and drain down your water systems properly to avoid flooding. Clear the property making sure to remove any combustible material. Install a letter box seal to prevent arsonists or squatters setting fire to the property. A build up of mail is also a vital clue that a property is empty. Ensure the perimeter of the property is secure and where required fit steel fittings to windows and doors. Instigate a minimum weekly inspection of the property both internally and externally as required by most insurance providers. Secure the property with a permanent security officer and/ or alarm (which includes passive infrared smoke detectors and water detectors). Not only will the alarm act as a deterrent, but if squatters do gain access, the alarm activation will register any break-in. This can act as evidence when applying for an Interim Possession Order a fast track eviction process. Not only will these steps help to address property managers concerns linked to squatting, but minimise the negative impact on local communities. - Ends - About VPS, The Vacant Property Specialists VPS is the trusted specialists in securing, maintaining and managing vacant properties across a wide range of customer and industry sectors the world over. Core services cover the complete property lifecycle from an initial risk assessment, to security, monitoring, clearing, cleaning, maintenance and preparation. These services protect properties against unauthorised access and a variety of hazards such as arson, theft, squatting and unauthorised occupation. Additional services include cleaning, clearing and removing hazards from properties, disconnection of services, inspections and essential maintenance for customers. Following VPS s recent acquisition of SitexOrbis Limited in September 2011, the enlarged VPS Group will have global revenues of approximately 200m, more than 2000 employees and more than 90,000 properties under management. The combined European businesses will have a turnover of 100 million, 1300 employees and nearly 100 locations across the UK, France, Ireland, Germany, Italy, Belgium, the Netherlands and Spain. This enables VPS to serve its customers quickly and efficiently, and as soon a property becomes vacant. Its extensive range of services provide customers with the peace of mind that vacant property is safe and secure, and most importantly, retaining its value. The VPS Group also has significant operations across the USA. For more information visit Press contacts: 4

5 Alexandra Tucker, FTI Consulting: / Rosa Hatherley, FTI Consulting: / Images available upon request 5