2.) Inform Necessary Parties
Another initial step involves informing a few important people about your intentions for the property.
- Insurance provider. Promptly notify your insurance company that the building is vacant. Make sure to have insurance in place for any unfavorable event. “Recently at one of our vacant sites, a tree fell on top of a woman’s car while she was using it as a lunchtime getaway from her office,” Insul explains. “Fortunately, she wasn’t injured, but her car was severely damaged.”
Buildings that are more than 69% vacant for more than 60 days can lose important coverage, says Luanne Funari, vice president of The McIntyre Group, insurance brokers and consultants. The standard commercial policy reduces loss payments by 15% for most causes of loss and does not cover others at all, including vandalism, water damage, and glass breakage.
“For a premium, the owner may be able to purchase vacancy permit coverage that reinstates some or all of this coverage for a specific time,” she says. “Proper precautions can keep the building secure.”
- Local authorities. Also notify your fire and police departments of the building’s vacant status, Insul advises. It’s important for authorities to know how they might access the property during an emergency – either via key or lockbox.
One aspect of the notification process is retaining an accurate and accessible key holder list. Overlooking this simple task can inadvertently result in damage to doors and locks if police and fire departments must open them with axes and drills. Third parties, such as CAP and Vacant Property Specialists, can act as the point of contact if emergencies arise.
- Attorneys. Next, seek out the services of a tax attorney if you do not have one on staff. Over time, a good attorney should attempt to lower your real estate tax obligations so that the vacant building is less burdensome.
- Code enforcers. Also contact the municipal planning authority to advise who will handle oversight of the building.
“Initially this might be considered a way to unnecessarily get yourself on their radar and subject your property to extra oversight,” Insul says. “However, the opposite should occur. Because the local code enforcement department typically has so little information about who to contact about vacant properties, being proactive will make local officials view you as a concerned citizen and partner.”
There has been a significant emphasis in recent years by local code officials to encourage owners of vacant properties to provide contact information. Many cities have implemented building registry requirements for this reason. A failure to properly notify local code enforcement may lead to harsher penalties on the owner if the property is not maintained.