When does property you own become vacant? Individual owners might have a wide range of opinions, depending largely upon the particular reason for the premises being temporarily unoccupied (which we discuss a bit further below).
Insurers, on the other hand, are likely to have a rather more particular view and a closer definition of a property falling empty and vacant. Whereas many are entirely content to extend comprehensive cover during those times when a building is normally occupied from one day to the next, they are likely to restrict cover, or remove it altogether, once the property has been unoccupied for longer than a number of consecutive days – typically a month or so.
There is no universal definition of this period of vacancy, which may vary quite markedly from one insurer to another.
As a rule of thumb, however, you might be facing the prospect of your residential or commercial property being inadequately insured, if at all, when it has been vacant for a month or more.
If a property is expected to be unoccupied for more than a certain number of consecutive days (as defined under your property insurance policy), you should contact your insurance provider.
The insurer may require a special type of cover known as “unoccupied property insurance” or “empty property insurance,” which is specifically designed to cover the additional risks associated with properties that are not regularly inhabited.
Find out more and get a quote for homeowner unoccupied property insurance
Or get a quote for unoccupied commercial property.
This type of insurance can provide broader protection against potential damages and legal liabilities, but it often comes with specific requirements such as regular inspections of the property, maintaining heating to prevent pipes from freezing, or securing all doors and windows effectively.
It’s important for property owners to review their insurance policies and understand the requirements and coverage limitations associated with an unoccupied property to ensure they remain fully protected under their insurance terms.
Instances where a residential property may become unoccupied
A residential property may become unoccupied for several reasons, each varying in duration and context. Here are some common scenarios:
1. Property renovation or construction
When a property undergoes significant renovations or construction work that makes it uninhabitable for a period, it is considered unoccupied. Residents may need to move out temporarily until the work is completed, particularly if the renovations affect essential services like plumbing, heating, or electricity.
2. Between tenancy periods
Rental properties often become unoccupied between tenancies. After one tenant moves out, there can be a period of vacancy while the property is cleaned, repaired, or awaiting new tenants.
3. Owner relocation or extended travel
Homeowners may relocate for work or personal reasons, such as long-term travel or an extended stay overseas. During such periods, the property remains unoccupied until the owner returns.
4. Probate
Following the death of a property owner, the property may remain unoccupied during the probate process while legal matters are settled, and the property is transferred to heirs or sold.
5. Property sale
A property may also be vacant if it is on the market to be sold. Depending on market conditions and the property’s appeal, it could remain unoccupied for an extended period before a new buyer is found.
6. Health-related absences
Homeowners might find themselves in a situation where health issues, such as a lengthy hospital stay or a move to a care facility, leave their property unoccupied.
7. Awaiting development decisions
A property might be earmarked for development or demolition, pending necessary permissions and arrangements, during which time it stands unoccupied.
In each of these circumstances, it is essential for the property owner to consider the need for appropriate insurance coverage to manage risks associated with leaving a property unoccupied for an extended period. Additionally, taking preventive measures to secure and maintain the property can help mitigate potential issues.
Instances where a commercial property may become unoccupied
In the UK, commercial properties can become unoccupied due to a variety of reasons, often impacting the type of maintenance and security measures needed, as well as influencing insurance considerations. Here are some common scenarios:
- Tenant turnover
Much like residential properties, commercial spaces often become unoccupied between tenants. After a business moves out, there may be a period of vacancy before a new tenant is found, especially if the property requires refurbishment or customisation to suit the needs of the next occupant.
- Economic downturns
Economic challenges can lead businesses to downsize, merge, or cease operations altogether. In such cases, commercial properties, whether office spaces, retail locations, or warehouses, can be left vacant as companies adjust their operations in response to economic conditions.
- End of lease periods
Commercial properties may also become unoccupied at the end of a lease period, particularly if renewals are not negotiated in time or if tenants decide to relocate to more favourable locales or upgrade to larger spaces.
- Property renovations and upgrades
Properties undergoing significant renovations or upgrades that require the temporary cessation of business activities can lead to vacancies. These periods of unoccupancy are necessary for safe, extensive renovations that cannot be conducted during normal operations.
- Market oversupply
In areas with an oversupply of commercial space, properties may remain vacant for extended periods. This can happen when new developments are completed in anticipation of demand that does not materialise as expected.
- Seasonal usage
Some commercial properties are used seasonally, such as holiday markets, agricultural processing plants, or certain recreational venues. These properties may stand vacant for parts of the year when they are not in use.
- Regulatory and planning delays
Delays in obtaining necessary permits or regulatory approvals for business operations can also lead to commercial properties being temporarily unoccupied. This can occur when businesses are transitioning to new markets or when new developments are pending approval from local authorities.
- Ownership changes
During transitions of ownership, commercial properties may experience periods of vacancy as new owners assess their options, plan property improvements, or seek new tenants.
Each of these scenarios presents unique challenges in terms of property management, security, and insurance. Owners of unoccupied commercial properties need to take proactive steps to manage risks, such as maintaining the property to prevent deterioration and implementing security measures to protect against vandalism or theft.
Additionally, securing the most appropriate type of empty property insurance to cover periods of vacancy is crucial, as standard commercial property insurance might not provide adequate cover during these times.
Why are insurers so wary of empty property?
There is one overriding reason for many insurers’ reluctance to cover an unoccupied property: the considerably increased risk which such premises face:
- instances of fire in vacant commercial and industrial property can be the result of arson;
- a fire may also start accidentally, of course, as the result of combustible material catching fire and – going unnoticed – rapidly spreads;
- even routine maintenance problems may develop into major disasters if there is no one on hand to raise the alarm and take the appropriate action; and
- on top of all these risks and perils is the tendency for any obviously unoccupied property to attract all manner of unwelcome attention from vandals, squatters, thieves and other intruders.
How you can help
Vacant property insurance is designed to help protect your empty premises, but there are a number of measures you might also take to help prevent loss or damage.
With respect to the already mentioned risk of arson, it is important you carry out a fire risk assessment of the premises concerned. By the same rationale, you might want to consider a wider risk assessment of all threats and perils to the unoccupied property.
More specific precautions and safeguards for your residential or commercial might include some or all of the following – whether or not they are required as a condition of vacant property insurance:
- ensuring that the building is well maintained and kept in a good state of repair before it is vacated;
- arranging logged inspections on a regular basis (if necessary, by contracting a specialist property management service). These regular inspections may also be a condition of your unoccupied property insurance;
- lagging or otherwise protecting water pipes which may be vulnerable to freezing during cold weather – and bursting in the thaw;
- considering shutting down all utilities – or at least informing the utility companies that the premises are going to be vacant for the duration;
- requesting the help of neighbours in letting you know of anything suspicious or unusual going on;
- creating every impression that a residential property is in fact occupied – perhaps by asking the same neighbour to park their car in your driveway from time to time, turning on interior lighting with the help of timer switches, and making sure that any deliveries are promptly taken inside and kept out of sight;
- indeed, if you anticipate that the property is going to be empty for some time, you might want to consider sealing up the letterbox completely;
- ensuring that any garden is well kept and free of fallen debris and rubbish;
- keep valuable items well out of sight – preferably removing them altogether from the property for safe keeping – but stop short of emptying the property of all furniture and possessions entirely, since this only serves to underline the fact that no one is living there;
- as a matter of common sense, of course, you need to make sure that all outside doors and windows are securely locked and that any burglar alarm is properly set – if you are unable to afford the installation of such a system, even a “false box” might help to deter opportunistic intruders.
An empty property might act as a magnet for all manner of undesirable attention as well as posing a number of additional risks and perils. For that reason, purpose designed vacant property insurance is intended as a temporary, standalone and comprehensive alternative to your lapsed regular insurance cover.
If a property vacancy is in the offing, you might want to contact the specialists here at Cover4LetProperty to arrange purpose designed vacant property insurance.
We have also produced some useful resources: read our Guide to unoccupied property and check out our video entitled: Do I need a specialist unoccupied property insurance policy?
