When landlords are left with vacant property, they can also be left holding the baby across a range of legal and contractual issues. Daniel Long explains some of the problems – and how they can be resolved.
Empty rates liability
Landlords of commercial property should consider future empty rates liabilities well ahead of taking back their premises. Sometimes you can claim empty rates relief and it’s worth exploring whether rates liability can be passed onto a former tenant for a set period following vacation.
You can only claim empty rates relief for three months or six months, depending on the type of property. If you have difficulties re-letting the premises, you should think about short term occupations as they can effectively re-trigger empty rates relief in certain circumstances. For example, you could let your premise to a shelf company, charity or storage company for six weeks, during which landlords reimburse the rates liability so that empty rates relief can be claimed later.
Insurance requirements and security
Landlords should also consider implementing short term security measures to prevent occupation of the vacant property by squatters, damage to the premises, or theft. Some premises – such as factory units – are particularly vulnerable to security problems. You should inspect vacant premises regularly and think about investing in intruder alarms, CCTV or a physical security presence. It may also be sensible to secure perimeters, seal any letterboxes, drain water systems and isolate services to the premises.
It’s almost always necessary to inform insurers if premises are going to be vacant. Failing to do this could prevent a later claim. It’s worth keeping in mind, too, that insurers may have specific security requirements for the property.
When tenants vacate a property, it is important for landlords to contact utility providers. Landlords sometimes end up in dispute with utility suppliers if large bills have been issued based on estimated readings. This is a particular risk where meter readings are not taken electronically.
In some circumstances, ‘deemed contracts’ can leave landlords liable to pay utility bills. So you should take meter readings when the property becomes vacant, including photographs of the meter readings as evidence, and get in touch with the supplier at the earliest opportunity.
Goods left at the premises
When commercial premises become vacant, but the vacating tenant has not removed all goods and equipment, landlords should take photographs and make an inventory. In some circumstances landlords can exercise commercial rent arrears recovery (CRAR) for a set period after the lease termination, enabling you to take control of goods.
It is also important to establish if there is a contractual entitlement under the lease to sell goods that have been left. Notice can be served on former tenants, giving the landlord the right to dispose of goods unless they are removed. Otherwise, landlords should be aware of their legal obligations in relation to goods that have been left, including a duty of care not to damage or remove goods and to allow access for collection at reasonable times.
It is risky to dispose of goods unless you have a clear contractual right, a legal tort notice has been served, or the goods have been abandoned. To treat goods as abandoned requires evidence that proper attempts have been made to find the owner of the goods. In addition, particular care should be taken before disposing of computer equipment – landlords can inadvertently assume duties under data protection legislation and may have to arrange secure disposal by a specialist.
For further advice on how to deal with vacant property, call Daniel Long on 0161 761 8063, or email him at firstname.lastname@example.org. Daniel is a director at WHN Solicitors and has extensive experience in property dispute resolution between landlords and tenants.