Legal Issues with Vacant Properties
Understanding Your Responsibilities and Risks
For commercial landlords, managing vacant properties comes with a unique set of legal challenges. While it may seem that handling an unoccupied building is a temporary lull between tenants, the reality is that a longer period of vacancy poses several key risks that landlords must address. Failing to do so can lead to costly liabilities and legal disputes. The responsibilities of landlords extend beyond finding new tenants and involve complying with property maintenance standards, ensuring safety, securing the building, and keeping up with changes to insurance coverage or tax obligations.
Moreover, landlords may have to deal with issues like trespassing, vandalism, anti-social behaviour, and squatting, which can complicate the situation and bring about additional legal consequences. Understanding these risks and taking proactive steps can help landlords safeguard their investments while remaining compliant with the law. In this blog, we’ll discuss the key legal issues surrounding vacant properties, provide guidance on mitigating potential problems, and share practical tips to help landlords manage their vacant properties effectively.
Common Legal Concerns for Landlords
Owning a vacant commercial property exposes landlords to various legal risks that may not be immediately apparent. Understanding these risks is crucial for avoiding potential financial and legal pitfalls. The key legal concerns include maintenance obligations, dealing with squatters, and ensuring the property is secure and regularly inspected.
Property Maintenance Obligations
Even if a property is unoccupied, landlords remain legally responsible for maintaining it. Neglecting a vacant property can lead to significant problems, including structural damage, health and safety issues, and even legal claims. If a property falls into disrepair, it may attract vandalism, squatters, or anti-social behaviour, further increasing liability.
Landlords are legally obligated to ensure that their vacant properties do not threaten public safety. For instance, broken windows, damaged roofing, or hazardous materials can create dangerous conditions for the public, potentially leading to injury. Local authorities may also issue penalties or fines for failing to address property maintenance issues, such as overgrown vegetation, fire hazards, or structural defects.
It is easy to imagine a landlord facing legal action if a passerby sustains injuries due to a crumbling staircase in a vacant property. A court will likely find the landlord liable for not maintaining the property, resulting in significant financial losses. Regular inspections and timely repairs are crucial to prevent such legal risks and demonstrate that the landlord is taking all reasonable steps to manage the property responsibly.
Squatting: Legal Rights for Landlords
Unlawful occupation, or squatting, is a significant issue for commercial landlords with vacant properties. Squatters can occupy a building without the owner’s consent; in some cases, they may even acquire certain legal rights. While squatting in residential properties is a criminal offence in the UK, squatting in commercial properties falls under civil law, which means landlords have to follow specific legal processes to achieve an eviction
Over time, if squatters remain in a property undisturbed for a prolonged period, they could potentially apply for “adverse possession,” a legal process that may allow them to gain ownership rights to the property. This situation is rare but underscores the importance of regularly checking on vacant properties and taking steps to deter unauthorised access.
To protect against squatting, landlords should ensure their properties are well-secured, using measures such as robust locks, security fencing, alarm systems, and surveillance cameras. If squatters gain access through forced entry, landlords can involve the police to address the issue as a criminal matter. In situations with no evidence of forced entry or criminal damage, eviction proceedings are more challenging, often requiring the assistance of legal experts specialising in property law to navigate the eviction process.
Maintenance, Regular Inspections, & Addressing Hazards
Landlords are responsible for taking reasonable measures to secure vacant properties and prevent unauthorised access, vandalism, theft, and other forms of anti-social behaviour. The term “reasonable measures” can be interpreted differently depending on the specific circumstances, but generally, it includes ensuring doors and windows are locked, installing security systems, boarding up vulnerable areas, and employing adequate lighting around the property. For larger properties, hiring security personnel can also be a worthwhile investment to deter trespassers.
Regular inspections are essential for identifying potential hazards that may arise while the property is unoccupied. Issues such as water damage, pest infestations, structural weaknesses, and signs of unauthorised entry should be addressed immediately to prevent problems from escalating. Frequent inspections help maintain the property’s condition but also, importantly, demonstrate that the landlord is actively managing the property, which may provide a defence in case of any liability claims.
Addressing hazards promptly is a key responsibility for landlords. This includes repairing broken windows, maintaining the exterior and landscaping, and upholding the building’s structural integrity. Neglecting these duties can lead to legal consequences, including fines from local authorities or civil action from individuals who sustain injuries on the property.
How to Protect Yourself Legally
In the UK, when it comes to paying business rates, commercial property liability reverts to the owners should a building be unoccupied. Despite temporary periods of relief of three months for commercial property and six months for industrial spaces, full business rates will ultimately be required from the owner. This can be a considerable amount previously paid by the tenant.
Rates relief is available for property owners who temporarily occupy the building, although loopholes around short-term ‘box-shifting’ practices have been closed. Temporary pop-up retail spaces and short-term charity and community group leases can prove effective at reducing the business rates burden for landlords.
ASTOP specialises in the latter and forms partnerships between landlords with empty properties between charities and good causes who need space. The benefits go beyond pure cost saving, but the resulting business rates relief can prove significant.
Insurance for Vacant Properties
Obtaining the right insurance coverage is one of the most effective ways to mitigate risks associated with vacant properties. Standard property insurance may not be sufficient for unoccupied buildings, as many policies include exclusions for vacant properties for extended periods. Therefore, landlords should consider vacant property insurance specifically designed to cover unoccupied commercial properties.
Vacant property insurance typically covers risks such as vandalism, theft, fire, and liability claims. Landlords should consult an insurance broker to discuss their specific needs and ensure adequate coverage. Although vacant property insurance may be more expensive than standard policies, its protection is essential for reducing financial losses and providing peace of mind in the event of a claim.
In some cases, insurers may require landlords to meet certain conditions to maintain coverage, such as securing the property, performing regular inspections, and keeping the utilities operational. Failing to comply with these requirements could result in denied claims, exposing the landlord financially.
Legal Consultation
Consulting with a legal expert specialising in property law can help landlords navigate the complexities of managing vacant properties. Legal professionals can advise on complying with local regulations, dealing with squatters and anti-social behaviour, and addressing liability concerns. Having access to expert legal advice ensures that landlords stay informed about their obligations and can protect themselves from potential legal disputes.
Landlords should also consider obtaining legal advice if they face any specific challenges, such as disputes with local authorities over property maintenance or dealing with squatters. In such cases, a lawyer’s expertise can be invaluable for finding a resolution and avoiding lengthy legal battles.
Documenting Your Processes
Our final piece of advice is to document maintenance activities, inspections and other activities undertaken during any period of unoccupancy. Evidence that the landlord is fulfilling their legal responsibilities is important. In the event of a liability claim, having a record of these efforts can be useful in defending against allegations of negligence.
