How to manage the risk of leaving your commercial property empty


If there are two words that owners of commercial properties fear most (behind “late rent”), they would likely be “vacancy rates”.

Having a property become and remain vacant is a worst-case scenario for landlords, and yet it can be very quickly realised in markets with appreciating rental rates or when an asset is poorly managed. Vacant properties can not only cost landlords money in lost rental income, but they can also be targeted by squatters, vandals and thieves. Costs that can be associated with property damage and theft can rack up substantially, putting a further dent in the landlord’s bottom line.

Know the risks

Vacant buildings are a major draw for miscreants, and there are plenty of such buildings throughout the UK.

Vacancy rates in the retail sector rose 161 per cent between December 2008 and March 2013, and although the vacancy rate for offices in London dipped to a 14 year low of 4.8 per cent in Q2 2015, that still leaves a fair amount of unoccupied space. Although you may not have an occupant in your premises, you or your organisation could still be liable and even face prosecution if a trespasser injures themselves while on your property. A trespasser injured in a vacant commercial property once received nearly £600,000 in compensation!

In addition to being liable for any injuries, you will also be liable for any damage done to your property if you fail to notify your insurer. It’s worth noting that when you do, your premiums will likely be affected. However, if you don’t, you could be in found to be in violation of the “change of occupancy clause” which could leave you uncovered and therefore liable for the costs of any damage yourself. Insurers Aviva reveal that £2 billion worth of damage is attributed to vandalism and arson in properties throughout the UK, with 25 per cent of this pertaining to vacant properties.

What you can do

To protect yourself financially in the eventuality your property becomes empty, there are some things you can do:

  •  Where possible, remove any electrical and copper pipes along with radiators, as theft of or damage to these are among the fastest-growing insurance claims, according to Aviva.
  • Remove anything valuable, such as electronics, which could be enticing to thieves or squatters.
  • Carry out a risk-assessment to identify points of entry, and put in place appropriate measures to secure them.
  • Ensure you have a working CCTV and alarm/security system in place in your property, so that in the event it is vacant even for a short space of time, you are quickly alerted to any intruders.
  • Turn off the water supply to eliminate the risk of pipes bursting and causing costly damage.


Written by: Charlotte Peel on Thursday 15/09/2016