Turnover of industrial and commercial property is a fact of life. And not
always because of lease expiry.
Owners and investors may not like it, if it continues for too long. Yet it
also gives them an opportunity to re-evaluate strategy, review rents,
remodel, re-purpose, or even sell.
But making the most of opportunity also calls for safeguarding what you
Protecting your vacant commercial property means not only protecting your
investment but also, potentially, saving money and the hassle that comes
with damage, leakage, pollution, neglect and other perils that empty
Every year, tens of thousands of vacant buildings in the US are damaged or
destroyed by fire, defaced and damaged by vandals and other intruders,
seriously affected by water leakage, and targeted by opportunist thieves.
Even garbage dumpers have been known to drop all manner of trash on vacant
sites, from mattresses to concrete and other building waste.
Yet, a few smart precautions, some of them quite inexpensive, can protect
you from most of these ravages. Effectively maintaining a building's
attractiveness and potential will help it hold value and become less of a
target for natural decline or criminal intent.
What you do to protect your buildings depends on a number of factors such
as location (for example, is it isolated or near to other occupied
buildings?), size and accessibility.
20 Actions to Protect Your Vacant Property
Bearing that in mind, here are 20 actions you can take to protect vacant
property, both between tenants and during renovation.
- Ensure access to buildings is limited, under lock and key. Restrict who
has access to keys.
- Ensure a prospective tenant or anyone else with a legitimate reason to be
there is always accompanied during inspection.
- Have a program of regular maintenance. This may include interior
cleaning, replacing of lighting, maintenance of landscape, snow clearance,
sump pump management, pipe insulation and general appearance upkeep.
- Inspect the building structure regularly. Identifying defects now may
save you time and money later. In particular, check roofing, gutters and
general structural integrity.
- Where utilities are concerned, take particular care over plumbing and gas
supplies. You should maintain services for heating (55F minimum),
sprinklers and security. If possible, isolate and shut off other,
non-essential supplies. Allowing a building's temperature to fall too low
may cause structural damage or bursts.
- Clear potential fire hazards both inside and outside buildings. Abandoned
storage equipment such as pallets and cardboard packaging left by a vacated
tenant is a particular hazard.
- Be cautious about on-site adverting the building is for sale or lease,
especially if the building is not surrounded by occupied premises.
- If you advertise its availability online, don't provide too much location
detail and be wary about including photographs.
- Promptly rectify any damage, including removal of pollution and boarding
up of broken windows. Keeping your building in good condition reduces the
liability risk of injury.
- Set up closed circuit or motion activated camera monitoring, ideally
- Similarly, set up an intruder alarm system connected to a remote security
service. If you already have alarms, tell the monitoring firm that the
building is currently unoccupied.
- If you don't already have them, install smoke alarms. If you have them,
add them to your regular maintenance program.
- Install temporary perimeter fencing if the building is isolated.
- Notify police that the building is vacant and immediately if there's any
evidence of a break-in. In some locations, police may be prepared to
include the location on their patrol route.
- Likewise, notify the fire department and your local government authority.
- Reinforce doors against forced entry.
- Install signage warning that the building is under surveillance and
locate cameras visibly.
- Have permanent security on-site, or regular patrols -- either your own or
- If the building is partly occupied, ask existing tenants to notify you of
- Arrange vacant property insurance with your agent! See below for more
Protecting Vacant Residential Property
Some of the measures we've outlined here also apply to protecting vacant
homes and other residential properties. You may be a landlord or an owner
between houses -- but, either way, it's important to maintain your property
in peak condition.
Vacant Property Insurance
Insurance for your vacant property is the most important fail-safe action
you can take to protect your investment. Without it, you are still at risk
of a potentially huge financial impact.
Generally, a building may be considered vacant when it's only 31 percent or
less occupied, though it may still contain certain equipment and fittings.
There may also be some insurance flexibility in the standard occupancy rate
to allow for change-over of tenants.
A good vacant property insurance policy will provide most or all of the
- Premises liability for injury suffered inside the building, for example
during an inspection.
- Insurance against theft and damage to fittings and other equipment.
- Structural insurance either for named perils or for all-risks (subject to
- Coverage of multiple buildings in a single, comprehensive policy.
- Flexibility of coverage as buildings become occupied or vacant.
- Flexibility of coverage terms. This is usually in three-month increments
up to a maximum of two years. However, some insurers limit coverage for
certain risks to just 60 days.
- Pro-rated cancellation, for example if a building is sold or becomes
- Protection for property under renovation, subject to limitations on
project cost and completed building valuation.
Buildings under construction or significant remodeling require contractors
to provide their own liability insurance, bonds and
certification, and builders risk coverage.
Once complete but unoccupied a newly-constructed building may be considered
for vacant property insurance.
Cost? Well, because a vacant property is considered a greater risk than an
occupied one, premiums are generally higher than for standard commercial
property insurance. However, the amount can vary significantly between
Vacant property insurance is a complex product and can sometimes be
difficult to obtain. Securing this directly is generally not something an
owner should undertake unless they have specialist and experienced staff.
Robertson Insurance and Risk Management offers specialist guidance on risk management as well
as full coverage for your vacant property.
If you'd like our help both in advising on minimizing risk to your vacant
property and arranging appropriate insurance, please get in touch.