From time to time and for a
variety of reasons buildings become unoccupied. You may have inherited a
property that you want to sell or you may be between houses in the course of
moving. What ever the scenario, approach your Building society or lender and ask
them to maintain cover on your unoccupied property and they are likely to say no
and also be unable to suggest any real alternatives. Most popular now are the houses
that are bought at auction for renovation purposes, sometimes a project can take
up to 12 months to complete and during this time some form of insurance is
required. If you have borrowed money from
the bank to finance your renovation project you will find them quite demanding
when it comes to the question of insurance but again they will usually be unable
to assist you with cover under their block policy. If you have purchased the
property as a rental project you will need to get it to a certain standard
before most letting agents will accept it and start showing prospective tenants
around. If you have purchased the property for letting, remember the health and
safety checks that will need to carried out before the property can be rented
out. Your letting agent may be able to help you with these or you may the notes
in Landlords section to be helpful.
Managing an Empty Property
- looking after your unoccupied
properties needs a bit of thought and the more you can do to avert a loss the
better. Here are some suggestions;
Empty property should be
inspected on a regular basis. If you find any damage (such as a broken window
pane it should be repaired. Once every 7-14 days is usually sufficient If
possible ask a local to keep an eye on the property for you, give them your
mobile number so as they can call you in an emergency Clear the garden and
surrounds of the house of any rubbish in particular combustible material should
be removed and disposed of properly Take steps to avoid the build up of junk
mail, this presents a real fire risk. If you are not anticipating any mail,
consider sealing up the letter box Drain down the water system and turn off the
supply at the stop cock Switch off the electrics.
Empty Building Insurance is most
definitively a non standard type of Building Insurance, you will find that the
cover you are offered whilst often based on the standard policy wording will
contain a shortened list of perils that can be covered. The contract will also
come with a list of conditions and warranties ( based on the suggestions listed
above that you must adhere to if a claim is to be valid. We may not be able to
quote for every case and the cover we offer will depend very much on the state
of repair of the building and your intentions. Assetsure are able to
insure empty properties that have been purchased for renovation purposes. We are
able to provide building insurance quotations and depending on the condition of
the property, we can usually offer fairly wide cover. Ideally we are looking to
provide cover for buildings that have been purchased with a view to them
becoming either the main residence or a weekend or holiday home. Each insurance
proposal will be considered on its merits.
Whilst this type of property purchase is very
popular in Spain & France , it is not so wide spread in the United Kingdom . One
of the main reasons for this is that empty properties in France & Spain are
often very cheap to acquire and the cost of materials and labour can be
substantially cheaper and thus renovating your dream holiday or retirement home
can be done at a fraction of the cost. Here a lot more thought has to be applied
to the project; often the cost of land and the basic building shell can be more
expensive. It is worth consulting your local VAT office and asking for the
appropriate guide to VAT as some properties, depending on how long they have
been unoccupied may qualify for lower or zero rated VAT on some aspects of the
work. With VAT currently at 17.5%, this can save you some money.
Purchasing an Empty Property - we hope
you find the following suggestions useful:-
Research -
Before the purchase of an empty property
to renovate it is well worth doing a little home work to ascertain if it
really could be your dream home or it is just a money pit waiting to eat up
your hard earned funds. Probably the best way is to obtain a professional
opinion on the matter by instructing a chartered surveyor to prepare you a
building condition report. This will set you back several hundred pounds and
of course if you are considering many different properties, you will soon have
racked up a considerable expense even before you have purchased a property. In
the initial stages, there are a few things you can look out for yourself, this
should help keep your costs down and then, if you are serious about a
particular property, you can then instruct a detailed building inspection
report.
Advice from a Builder - older often
semi derelict properties will have problems, that could include subsidence
heave, damp, dry rot, damaged or faulty wiring, broken plumbing damaged or
collapsed drains etc or it maybe that the building has never been used for
human habitation before. What ever the problems, try to keep an open mind,
everything can usually be overcome at a cost and if the basic shell is
available at a good price, even with the remedial work, you may still have
found yourself a bargain. Once you have obtained a good idea of what needs to
be done, speak to a builder who should be able to give you an approximation of
any works that need to be carried out and the costing. As above, remember to
check the VAT position, it is a good idea to do this before any work
commences. A simple mistake is to get carried away with the final value of the
property on completion, always check with local estate agents as to the price
of similar property and try to find out how long such property usually takes
to sell.
Viewings - When viewing your
desired empty building, start by looking at the outside, take a walk around it
and make notes on the condition of all sides. A camera to take pictures is
essential and can help you to demonstrate the condition of the property to a
builder if he is unable to call at the property. Take a tape measure with you
and write down all of the dimensions of the property. Make notes as the
surrounding buildings, their usage and access to and from the property.
Structural Movement -
Perhaps the most important thing to look
out for in an unoccupied building is structural movement. The remedial work
for this can be costly and often even when repaired, it can make the building,
difficult to insure. Although, you may not be worried by the subsidence
aspect, particularly if it is going to be your own home or holiday home,
remember, that one day you will undoubtedly want to sell the property and the
ability to obtain good quality affordable insurance will be of paramount
importance to any purchaser. Also bear in mind that if a property is not
eligible for subsidence insurance, it is highly unlikely that a mortgage will
be able to be secured on it. Examine all walls for evidence of
cracking, make sure you check both inside and out. Also check to see if there
are any cracks in the plaster work. Pay special attention to doors and window
frames. Stepped diagonal cracks could mean there is a subsidence problem as do
doors that do not close properly. Cracks above doors do not necessarily mean
subsidence, they can also be attributed to failed lintels, and your builder
should be able to offer an accurate opinion. Rendering is usually applied to a
building for cosmetic reasons and cracked rendering does not necessarily mean
that a building has subsidence problems but you should at least check to see
if the brickwork underneath is damaged as well. Underpinning building is not
cheap, it is specialised work and an accurate quotation should be obtained
prior to any reconstruction work being started. Bowed or leaning walls
can be replaced or repaired; sometimes repair work to the roof can alleviate
the problem or inserting restraining rods or wires can fix the problem If the
problem is acute, you may have to demolish the whole wall to make sure that
the building becomes structurally sound.
Drainage - special attention should
be paid to any drains if they are in existence, collapsed or broken drains
should be repaired or replaced as quickly as possible. Any escape of water in
to the surrounding soil can lead to settlement and thus can often be confused
with subsidence damage.
Chimneys and Roofs - Make sure that
chimneys are straight, if the stack is unstable, if will have to be rebuilt
and this could cost up to £1000. Leaking flues are easily checked with smoke
pellets, but you will need to seek permission first, again if you need to
replace a flue, it could cost you up to £1000. Roofing problems include broken
or slipped tiles or damaged lead flashings and worn pointing. You may need
binoculars to study the condition of the roof, if it is in a bad condition, it
may need to be renewed in its entirety. Having access to the attic is
essential, you will need a torch but have a look to see if you can spot any
holes as well as any damage to the roof timbers caused by damp or fungal
infection. Check to see if the roof is spreading often a consequence of damp.
Internal Fixtures -
Have a look at the electrics in the
building, if they are old and worn, they may need to be replaced, and an
electrician will be able to give you a quotation. Lastly don’t forget to
check all of the internal wood work for evidence of dry rot or fungal
infection, dry rot will destroy timber very quickly and it thrives in damp
poorly ventilated locations. The first signs of dry rot are a musty smell and
if a building has dry rot, it will need professional treatment.
Once you have ascertained the true condition of
your property, added up the costs of the remedial works, , discovered the prices
of similar converted houses in the location, you will be on the way to deciding
if your chosen property really is a bargain.
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Guide to Unoccupied Property