Potential Risks of Vacant Real Estate


        Protecting Vacant Real Estate Property

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There are a host of risks and concerns associated with owning vacant property. Vacant buildings are an obvious target for theft, trespassing and vandalism. For example, the rising cost of copper has given rise to an increase in the theft of copper pipes from vacant properties. In addition to any loss or property damage that may occur, keep in mind that the owner of a property can be held liable for criminal activities or accidents that take place on the premises.

In addition, vacant properties are susceptible to undetected damages, such as fire, water damage, electrical explosions, wind or hail damage, and mold. A study by the U.S. Fire Administration shows that approximately 30,000 fires occur every year in vacant buildings, costing $900 million annually in direct property damage. Many of these incidents occur in vacant buildings due to small, undetected maintenance issues (where someone in an occupied building would have recognized and handled the problem before it caused a larger loss).

In certain facilities, there may also be environmental hazards that the owner needs to consider. Facilities that are used to store chemicals or other pollutants should ensure that such materials are removed or securely stored—the owner may be held liable for any hazardous materials that contaminate groundwater or other nearby natural resources. Also, underground fuel tanks present serious challenges and thus should be frequently and carefully inspected by professionals.

In a time when layoffs and foreclosures are widespread, your firm may be forced to manage vacant real estate. The insurance risks and liabilities associated with owning vacant property can be extensive, and to ensure you are adequately protected, it is important to know these risks. In addition to purchasing comprehensive insurance coverage, there are numerous preventive strategies for maintaining vacant properties to reduce risk and liability.

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