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Deliberate Dereliction
Norwich Union has welcomed the Government’s plans to tackle what
it calls the ‘deliberate dereliction’ of empty shops, offices
and factories.
The move is part of a package of measures from the Department for Communities
and Local Government (DCLG), which is aiming to revitalise towns and cities
trough a review of business rates and empty properties.
Mike Colmans, property owners underwriting manager at Norwich Union, said
he welcomed any move that would reduce the likelihood of buildings falling
into disrepair.
“Empty derelict properties present a greater risk to insurers in
terms of arson and malicious damage. Such attacks may not only affect
the derelict property, but also those surrounding it. We therefore welcome
the Government’s efforts to remove any incentive to allow dereliction
to occur.”
While the Government acknowledged that most property owners did not deliberately
vandalise their empty properties in a bid to avoid rates, it claimed a
small minority may be tempted to “render it incapable of economic
repair to avoid paying the rates.”
However, Colmans believes the issue isn’t so straightforward, in
that the majority of business property owners had legitimate reasons for
their properties becoming unoccupied. “It’s not so simple to
say that property owners are incentivised to allow commercial properties
to become unoccupied through relief from
Because unoccupied buildings present a much greater hazard, the cost of fire insurance usually goes up, cover may be restricted and additional terms imposed. We therefore have a certain amount of sympathy with property owners over their concerns about the removal of rate relief.”
Ted Kenrick, Norwich Union Risk Services’ technical services manager, said it was essential that insurers were informed whenever a property became unoccupied.
Risk control procedures need to be put in place at the time the building is vacated to manage the increased risk of fire and malicious damage – such as regular inspections, removing rubbish and improvements made to the security of the premises.
Insurers will also want to know why the property has become unoccupied, for how long it is expected to remain empty and what the future plans are for the premises so that any assistance can be given where needed.”
The Rating (Empty Properties) Bill has already successfully completed its passage through Parliament and awaits Royal Assent. The Government said it believed reducing the rate relief on empty properties would provide a “strong incentive” for owners to re-let, re-develop or self empty none-domestic buildings.
