Connect to Real Estate

Cancellation of loan interest cover turns spotlight on insurance

2012-01-13T10:28:57Z

The fact that insurers want to undo an arrangement that has been in place for so long is a sign of the times -- they are toughening up their attitude, as, indeed, are banks.
In 1992, the insurance market, represented by the Association of British Insurers
(ABI), entered into an agreement with the British Banking Association (BBA).
This agreement ensured that insurance policies on buildings covered the interest of banks that had made loans on property. It was not intended to replace specific obligations or undertakings, but rather to be a safety net for banks.

Last summer, the ABI told the BBA that it intended to cancel the agreement because it had fallen out of use. Many of the original signatories, both banks and insurers, were no longer in business, it said, and many new ones were not included. The agreement will end on 30 June 2012, following a notice period starting on 1 January.

The agreement was intended for residential loans. For loans with specific arrangements in place, as one would expect on most commercial property, the cancellation should have no effect.

However, the fact that insurers want to undo an arrangement that has been in place for so long is a sign of the times -- they are toughening up their attitude, as, indeed, are banks...

Read this article in full

Reading the riot act will allow communities to return to normal

2011-09-09T08:09:36Z

]]> The riots of early August spawned much comment about insurance. There were stories of people who didn't know how to make a claim, were confused by conflicting advice or couldn't get answers from their insurers fast enough.

There were also examples of those who found themselves without insurance. At least they had a possible solution for at least part of their problems: compensation under the Riot (Damages) Act 1886, which allows some losses that result from riots to be claimed from the local police authority.

This caused additional confusion as, possibly because it had been a long time since it had been called upon, there was uncertainty about how claims should be lodged -- and by whom.

Then there followed a debate about whether such compensation was in the public interest, or whether the 125-year-old legislation should be repealed -- driven in some measure by the police.

Read this article in full>>

Prepare for deep waters UPDATE

2011-08-05T11:35:43Z

]]> Our previous Flood Bulletin issued in February 2011 focused on the repercussions of the Government decision to reduce spending on flood defences and the UK insurance market's response to this which might lead to either complete removal or selective availability of flood cover probably at higher premium rates during 2013, all at a time when there is expected to be an increased frequency of severe flood events.

Flood damage can be devastating and recovery can be both time consuming and very costly and can have a significantly negative effect on tenant's businesses. Here we follow up on our earlier article with a look at what real estate investors and their property managers can do to reduce their portfolio's exposure to flood and mitigate the impact which a flood might have on properties.

In this bulletin we mainly focus on property damage and the responsibilities of real estate investors and their appointed managers and our advice is therefore predominately applicable in respect of multi-let buildings and estates where they will retain management responsibilities. As with all risk and safety management issues in such properties however the landlord and the managers will generally have an obligation to co-ordinate the property wide activities and to ensure that there is appropriate cooperation between all occupiers.

Read the full bulletin here (PDF 170Kb)

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Hopes sink as criticism of DEFRA's flood defence proposals fall on deaf ears

2011-06-27T09:35:55Z

]]> My involvement with public consultations was fairly limited until I assumed my roles with the City Property Association in 2008. Since then I have been party to drafting many responses, often on my "favourite" topic: floods.

Sometimes the outcome is very satisfying. Something is identified that appears to have been overlooked by the consulting party and its plans are amended accordingly. If only it were the case that reason had been heard in the Department for Environment, Food and Rural Affairs' (DEFRA) consultation on the future of funding for flood defence expenditure, which closed in February this year.

The Comprehensive Spending Review last year led to a considerable reduction in the proposed budget for flood defence expenditure for the next few years. The DEFRA consultation, the final proposals of which were published on 23 May, was based on the proposal that funding needs to be raised from other sources, primarily the private sector. Also, that the decision-making process on what schemes should go ahead should be devolved to a local level, as should the responsibility for fundraising.

Interestingly, it seems that no representatives of the commercial property world were included in the list of consultees, despite many having a past involvement in debates on flood defence - a matter that affects building owners and occupiers alike. Nevertheless, several did draw attention to deficiencies in the proposals, despite reluctantly accepting that private sector payments were inevitable. Real estate already makes considerable direct and indirect contributions to the public purse.

Read my full Property Week article here (Adobe PDF 1.86MB)

Prepare for deep waters

2011-02-10T12:06:04Z

]]> Flood insurance for UK property, both commercial and domestic, will change materially in 2013 and possibly sooner. This is the response by the UK insurance industry to the decision by the Government to reduce planned spending on flood defences. The underlying message is that insurers think the flood risk is getting worse.

The government cuts in planned spending on flood defences have important, potentially catastrophic implications for commercial property owners and managers. They can include:

- The probability of more frequent and possibly more severe flooding
- Limited or more expensive insurance or both
- Potential breach of contract for properties where insurance isn't available
- Reduction in availability of property loans
- Claims from neighbouring property owners affected by flood prevention measures

The United Kingdom is unusual; flood insurance is widely available for most domestic and commercial properties. This isn't the case elsewhere in Europe. But UK insurers fear that climate change will increase the number and possibly the severity of floods, and they have already seen claims increase by 200% in real terms during the last decade.

Read my full Flood Bulletin here (PDF)

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What if?

A serious flood affecting Central London would put all services under extreme pressure - possibly even to breaking point, since they are already so stretched, and businesses would suffer as a result. For instance, seven of the nine major rail terminals are situated in the area shown in the Environmental Agency flood map as at risk and numerous underground stations are in flood risk zones. Premises may be inaccessible, even if they aren't themselves flooded, or staff unable to get to work. The effect of the pre-Christmas snow demonstrates how stretched London's infrastructure is.

Two of the three emergency response hospitals, Guy's and St Thomas' are within yards of the Thames and numerous underground stations are in flood risk zones. It is not clear how well protected major public services are, but many individual buildings still have emergency back-up power generators, telecoms and critical support functions in the basement.

An Overview of the Real Estate Insurance Market for 2011

2011-01-13T12:43:28Z

]]> The view of commentators was that 2010 would see the Real Estate market remain generally competitive with a possible number of exceptions, these being unoccupied or void buildings and properties that had potential or actual flood issues.

It was also thought that where possible insurers would push for rate increases, these could be resisted if the account was profitable and demonstrably well managed, which was the case.

There was an increased number of portfolios being remarketed due to enhanced pressures on Property Owners' own costs as a result of the economic downturn, as well as increasing pressure from occupiers to obtain the most competitive pricing.

However, competition between Real Estate Insurers remains strong with a number still trying to increase market share and few insurers sticking their heads above the parapet and trying to increase rates, potentially causing them to lose business.

What does the future hold for 2011?

There are still a number of issues affecting the Real Estate insurance market, which include:

- The market having been "soft" for several years causing the rating to reduce significantly below the market perceived norm.

- The inflationary cost of claims and settlements for both physical damage and liability losses.

- A reduction in the reserve levels available to release in order to boost profitability. In some insurer cases this is virtually nil.

- A lack of investment income and continued low interest rates.

- The Combined Operating Ratio of most Real Estate Insurers still exceeds the "break even" figure of 95%.

In order to reverse this unprofitable trend, Real Estate Insurers will need to underwrite business with a greater emphasis on achieving an underwriting profit. Insurers are suggesting that rate increases in excess of 5%, and in some cases significantly more are required to start this process.

Will Real Estate Insurers be able to achieve this?
Read JLT's full overview of the market below:

JLT: An Overview of the Real Estate Insurance Market for 2011

Insurers need to satisfy disgruntled occupiers

2010-11-23T11:32:04Z

]]> During my career - some 45 years of it - I have seen a sea-change in the attitude of property owners towards their occupier clients (previously called landlords and tenants!).

In the bad old days, the interests of the occupiers were rarely taken into account - at least once the lease was signed.

Now the situation is much different. It really started, at least in my experience, when shopping centre owners and occupiers realised that there was a commonality of interest in getting shoppers into their buildings, comfortably spending money.

That required some mutual cooperation in terms of marketing and the improvement of common parts. In turn, that closer relationship led to Tenants Associations and the like - generating an opportunity to discuss issues of mutual interest previously often unheard of.

The more recent close liaison between occupier and owner organisations that has resulted in various incarnations of the Lease Code has generally been welcomed as benefitting both parties. Insurance issues have been one of the key elements of those codes - with the owners making considerable concessions in clarifying the position of occupiers in a number of areas.

It was therefore rather a shock to see that the latest Occupier Satisfaction Survey undertaken by the Property Industry Alliance and CoreNet, the large occupiers representative body, suggests that the level of satisfaction with landlord's insurance arrangements has fallen by as much as 16% over the past year.

Admittedly, insurance has never had a good press; it is generally a grudge purchase - whoever has to buy it - and really only comes into its own in the event of a disaster. Not surprising that general satisfaction levels are low anyway but why should they have fallen and what can be done about it?

This is the subject of my latest article in the Professional section of Property Week. Please click on the following link to read more:
Insurers need to satisfy disgruntled occupiers (PDF)

Do not ignore insurance in the case of fit-out contracts

2010-08-27T08:11:02Z

]]> One of the worrying issues that emerged during my time as president of the City Property Association was just how segmented the property market is in the City. The top-quality, well-let offices and retail buildings are commanding increasing rents and higher market values: a subject of considerable rejoicing. However, there is also a substantial amount of far less desirable buildings that fall short of current requirements for carbon emissions and other green demands of prospective tenants.

There is little chance such properties will be let without substantial refurbishment and adaptation.

This leads me to an insurance problem causing concern in property and legal circles: when a contract involves an extension or alteration to an existing underproperty, the standard Joint Contracts Tribunal contract -- in schedule 3, option C in the 2005 version, and its equivalent in other forms. This requires the employer to arrange joint names insurance against specified perils for the structure and contents, which are the responsibility of the employer. The clause also requires the employer to arrange all risks cover for the works.

This is not likely to pose a problem when the client is the owner of the property and arranges the building insurance.

However, when dealing with a property actually insured by a third party, an approach has to be made to that party at an early stage. It is important to assess their attitude towards providing some protection to the contractor, and the tenant, in respect of damage done to the existing structure, because of the negligence of the contractor or others under the control of the client. In those cases, it is highly unlikely that cover will be provided

Find out more in my full Property Week article here

Embrace reinstatement valuation to alleviate grudge dread

2010-05-11T10:09:41Z

]]> As an insurance broker of considerable vintage I am fairly immune to allegations that all I am trying to do is to sell more insurance, when introducing new risk exposures or coverage concepts. Rarely is it admitted that my intentions are honourable - even if they are aimed at protecting my client.

On this occasion, I am actually counselling property owners to consider reducing their insurance costs by looking seriously at the building reinstatement values - an important element in the formula by which premiums are calculated. This advice is not based on some attempt to make myself loved, alas, but rather following discussions with several major firms of valuers, backed by data produced by the RICS.

In essence, the cost of building has fallen quite substantially over the past few years and few policy holders have taken advantage of that by reducing sums insured commensurately. The inevitable outcome is that too much premium is being paid. For more background, see the most recent column in Property Week.

This is an appropriate moment to mention the difference between investment values - which, sadly, have also fallen during the same period - and reinstatement values. Many property owners still mistakenly insure for the latter but the policy is designed to meet the costs of reinstatement of the building, usually together with cover for loss of rent, following damage. It is well worth checking that the right figure is being used to avoid any complications if a claim occurs.

Market Commentary 2010

2010-01-12T10:24:09Z

12 months ago, received wisdom in the real estate insurance market was that premium rating increases would prove to be almost inevitable during the course of 2009, with insurers generally making it known that they would be looking for set increases across their books of business, ranging from 5% to 9%.

Download the 'Market Commentary 2010' newsletter as a PDF(1.58kb) by clicking here

]]>

This was as a result of a combination of factors:

- the market having been "soft" for several years, resulting in a downward trend in rating over the course of that time;

- a reduction in reserve levels available to release, to boost profitability;

- the potential impact of recessionary linked claims, both actual and fraudulent;

- increased reinsurance costs

- the inflationary nature of claims costs and settlements;

- a lack of investment income and low interest rates;

- as a result of the previous two points, the need to underwrite business with a greater emphasis on profitability, rather than market share.

However, the reality during 2009 was that competition for business amongst insurers remained fierce, with some seemingly operating a "dual pricing" system of underwriting, whereby reduced rating was offered to secure new business, with attempts being made to achieve targeted rate increases on existing business.

Whilst potentially beneficial to clients in the short term, such a strategy adds obvious friction and instability into the equation when the business then comes round to renew the following year.

The latter half of 2009 saw an even greater drive by insurers to secure business, both new and existing, driven largely by poor financial results for the first half of the year.

So what lies in store in 2010?

Essentially, the same issues described above still exist and so must be taken into account when attempting to plot the course of rates during the next 12 months...

Download the 'Market Commentary 2010' newsletter as a PDF(1.58kb) by clicking here

Can you reinstate buildings in Central London?

2009-12-01T11:43:04Z

My work on the London Views Management Framework, on behalf of the City Property Association and featured in an earlier blog, led to one of my regular columns in Property Week. As a result of that, the Investment Property Forum commissioned me to write an article on some of the wider aspects of the insurance implications of a changed planning policy for its journal. That has just been published in the latest edition of "Focus" and the IPF has kindly given permission for my article to be featured on the JLT Real Estate blog - It addresses some serious concerns about the ability of a normal insurance programme to respond to the investment threatening restrictions that might be imposed by the relevant authority if a building is destroyed and cannot be reinstated. This is an area that seems to have been overlooked before but for which the real estate team at JLT have now developed a range of solutions.

Download the 'Can you reinstate buildings in Central London?' article as a PDF(1.14mb) by clicking here

]]> The IPF, of which I have been a member for many years, is an organisation founded in 1988 to advance the knowledge and understanding of property as an investment. It has over 1,900 members, who are individual rather than corporate, including leading figures from a range of different professional backgrounds - with a common interest in commercial property as an investment. I have had the opportunity to talk at several of its events on various insurance and risk management topics, the latest being the Sustainability Interest Group's breakfast last month that looked at the challenges posed to investment by climate change - and the risk that insurance might not cover all of the consequences. For more information on the IPF see - www.ipf.org.uk

London Views Management Framework

2009-10-12T09:34:00Z

As you may know, I joined the real estate team here in July - the pinnacle of my career spanning some 45 years focussing on commercial property insurance. During that time, as well as being Chairman of the Insurance Committee of the British Property Federation, I have been honoured to be elected as President of the City Property Association - a post that I have held since March 2008.

It was in this role that I became engaged with the consultation concerning the Mayor's proposals to amend the LVMF put in place by his predecessor some two years ago. This complex guidance to planning authorities sets out the restrictions that will apply to any new development to prevent it encroaching on the views of certain strategic buildings - primarily the Tower of London, The Palace of Westminster and St. Paul's Cathedral.

]]> Some measure of protection for some of these views has been in existence for many years but the Mayor's proposals create new vistas and widen the corridors that are now blighted. There also now seems to be a degree of Mayoral discretion built into the proposals, making them far from clear and certain - one of the supposed objectives of the changes.

These are obviously planning issues of considerable concern to owners of properties and development sites that may be affected, if the proposals get through the consultation process. That was due to end on 4th September but, due to some errors and lack of clarity in the original consultation document, this closed on the 30th September.

Those affected may not realise the impact that the changes will have. Perhaps some property owners do not appreciate that their investments now fall within the new corridors - our discussions with property owners show that they may be far from clear about the situation.

As a result, JLT has set up a partnership with GMJ, a leading architectural services firm, to assist us and our clients to understand the risk that they are facing. The 3D computer model of central London that GMJ has developed clearly identifies those existing buildings at risk in considerable detail. It also allows a developer to put a proposed building "on the map" to see if it will fall foul of the regulations - current and proposed. Another aspect not fully appreciated is the Mayor's decision that not just an existing building that offends is at risk but also one in its shadow. He expects, in the fullness of time, that all offending buildings will be removed and not replaced.

That leads on to the substance of my article in the 21st August edition of Property Week; which can be found on - www.propertyweek.com/story.asp?sectioncode=274&storycode=3147259

Basically, my involvement with the consultation led me to realise that most building insurance arrangements, although fully compliant with the terms of the relevant leases and funding agreements, are unlikely to protect a building owner adequately if an offending building is destroyed. This comes from the statement made in clause 57 of the consultation that if an existing offending building is demolished, planning permission to replace it will only be given for a compliant building - likely to be smaller than the destroyed one. There is no differentiation between a building demolished at will and one that is, for instance, destroyed by an act of terrorism or a fire.

Property insurance, with the associated loss of rent cover, generally deals with the reinstatement of damage. Any inability to reinstate the whole building, with the consequential loss of investment value, is not generally catered for. Neither is the loss of land value that will inevitably result if a site has reduced potential income. Even if there is a degree of investment value protection, as provided by the JLT bespoke property owners wording, it will be limited to the sum insured that will be based on reinstatement value.

Using GMJ's sophisticated modelling; we have been able to identify those properties at primary and secondary "shadow" risk. We have also developed a number of insurance solutions to that risk. At first sight, what was needed was an increase in cover to top up the claim to meet both the reinstatement cost of whatever could be rebuilt together with an additional amount for loss of investment value above that of the new building.

However, that was not sufficient or even the best solution for some owners. For them, a continued income stream - at current levels - for a much longer period than normally insured, perhaps 10 years instead of 3, met their requirements far better. For others a mix of revenue and capital payments fitted their exposure. Each case seems to rest on its own criteria - something that JLT will be able to assist in determining.

Of course, even better if the Mayor can be persuaded to change his ideas to recognise that a property owner who has had an investment destroyed by some external force is in a very different position to one who willingly demolishes a property in preparation for redevelopment. The City Property Association will certainly be lobbying for that change - as might you - but until the final changes come into force the situation is still a risky one for the owner of an offending property.

Do speak to us if you have any concerns - we can certainly help in risk identification and mitigation.

GMJ - 3D analysis of London's Protected Vistas

This geometric analysis has been carried out by GMJ using their London CityModel, a fully surveyed and accurate 3D planning model of central London. GMJ have looked at each protected vista to determine which existing London buildings breach those thresholds.

GMJ is a leading force in the production of high-resolution photomontage imagery pioneering the use of verified planning visualisation imagery, immersive virtual reality presentations and interactive real time 3D tools. http://www.gmj.net

Can the Mayor see the wood for the trees?

2009-08-24T09:16:43Z

I wanted to bring your attention to an article published in the latest edition of Property Week by Bill Gloyn, Partner, Jardine Lloyd Thompson Real Estate and President of the City Property Association.

I read with some interest his thoughts on the revised ideas for the London Views Management Framework coming out from the London Mayor's office. This forms part of the consultation on the new draft London Plan. The framework basically governs what can be built in and around certain heritage buildings of international importance - in particular, St. Paul's Cathedral, the Houses of Parliament and the Tower of London.

]]> The existing view corridors/framework were put into place by the last London Mayor and are due to be expanded by the current Mayor. These can affect buildings many miles away, as well as those in the immediate vicinity of the protected sites.

The implications for property owners resulting from the proposed changes are varied but the most notable example Bill gives is that of Clause 57 in the consultation document, which raises the question of whether a building that infringes the view can be replaced, even if destroyed by fire or terrorist action?

So what are the issues here... Should the building be destroyed the property could only be rebuilt to a pre-agreed set of criteria, being height and floor plate size. A property owner might - in the event of a 10 story building, for example - only be allowed to rebuild to five stories, therefore incurring a significant loss of rental income and investment value. Normal insurance - designed to meet the costs of reinstating damage and paying loss of rent during that period, as required by leases and funding agreements - would not compensate the owner for the far greater losses that would arise.

There are solutions out there and Bill's comments have certainly created a stir within the JLT Real Estate Team.

I would urge you to read the article and of course, please get in touch if you would like to chat about any of the issues raised in it with either myself or Bill.

Property Week Article: http://www.propertyweek.com/story.asp?sectioncode=274&storycode=3147259

Professional Indemnity Insurance - Challenges for Real Estate firms in 2009

2009-07-21T11:19:58Z

Recently, there has been a lot of press about the challenges that some firms have faced in renewing their professional indemnity (PI) programmes this year.

It is widely accepted that the recent experience of cumulative premium/rate reductions are not sustainable in the long term, and this is particularly true with the real estate sector, as a result of the downturn in the UK property market which has lead to an increase in claims and notifications in this area.

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Market Conditions

The RICS website details 41 qualifying insurers apparently able to offer compliant coverage, however, this seemingly large number of insurers is by no means a uarantee that renewal will be easy.

This is demonstrated by the fact that these insurers have different appetites:

    * Not all insurers will write S&V risks
    * Some insurers will write survey risks but not valuation risks
    * Some will write valuation risks but not for lending purposes
    * Some have limits on the amount of S&V work they will accept as percentage of the firm's overall revenue.

In addition to these factors, more general changes in the insurance market regarding underwriting considerations are also adding to the pressure of insurance renewals:

    * Insurers have become more selective and are asking more questions, including seeking supplementary questionnaires before they will provide terms

The imposition of higher excesses, particularly for S&V claims, is common

    * Some insurers won't consider S&V exposures in London and the South East
    * Some insurers are reluctant to write new policies for surveyors because of potential exposure to claims from work undertaken during recent times when the economy and property market were prospering.

Firms that undertake high levels of S&V work and those with claims who cannot demonstrate satisfactory risk-management procedures, may find themselves subject to punitive terms.

However, there is still adequate capacity for firms with strong risk management procedures, satisfactory claims experience and those that are well presented to insurers.

Helping Yourself

    * Allow sufficient time to prepare for your renewal; at a minimum start planning around 12 weeks ahead of renewal dates
    * It is essential to have risk management procedures in place to mitigate against potential claims, but in addition make sure you know how to demonstrate to your insurers how these procedures work in practice
    * Be prepared to provide more underwriting information than in previous years. To differentiate yourself from your peers, provide information even before it is sought.

This could include:

    * Banding of valuations
    * Contractual limitations
    * Risk management controls, i.e., valuation authorisation, peer review process, sign off, etc.
    * Client selection process JLT Financial & Professional

Working With You
In this increasingly challenging insurance market, you need a dedicated, experienced broker that can help steer you through the difficult market conditions.

JLT can provide you with the background to assist you in your decision of insurer selection; it is important to take into account the length of time they have been writing S&V exposures, their reputation for paying claims and their financial rating. Due to the claims made nature of PI policies it is the insurer at the time a claim or notification is made that will need to deal with the claim regardless of when the event giving rise to the claim occurred.

The real test of the value of an insurance programme is always at the time of claim and this is an area in which JLT truly leads the way. Our knowledge of insurance products, strong position within the insurance market and our dedicated London-based claims team allows us to settle claims quickly and with a minimum of adversarial negotiations, leaving you to get back to business with the minimum level of interference.

Download the Bulletin (PDF) here

Management of Unoccupied Properties

2009-06-15T10:13:14Z

Given the current economic climate and the potential for a greater number of properties being left empty together with a rising crime rate, insurers are looking more closely at the underwriting terms they apply in respect of vacant and void properties.

As a result, voids and other empty properties require additional risk management and the real estate team at JLT have prepared this guidance for our clients, their managers and tenants.]]> Generally, insurers will not cover individual vacant properties and even as part of a portfolio they are now looking for higher premium rates and the application of additional special terms, including :

• increased excesses
• indemnity rather than reinstatement basis of cover
• restricting the range of perils

There are also additional risk management controls which insurers will require the tenant or, if the demised unit is an un-let void, the landlord to take all reasonable precautions to prevent or minimise damage. Where an occupier has gone into receivership this may of course fall to their administrators who will still be required to comply with these reasonable requirements in order for the landlord's insurance cover to be maintained.

The following actions are typical of those which insurers expect for an unoccupied unit, but given the location and other specifics of each property some variations might apply
on a case by case basis

Regular inspections of the unit, including internally, should take place, preferably at least once a week, to ensure the property is fully secure and that there are no signs of entry, damage etc.

• In the case of properties with 24 hour onsite security, this internal inspection may be required less frequently, but this will require the owner to ensure that the security staff are informed of the unit being vacant and them being asked to undertake regular external checks. It is not essential for the internal inspection to be undertaken by the tenant or their administrators and it may be simplest if the on site security team also undertake this, if that can be arranged.

• Water systems should be drained down or the heating set to maintain an ambient temperature of 5 degrees or above to prevent the pipes from freezing or bursting. Other services should be disconnected unless required to maintain temperature/detection systems etc.

• Valves should be chained and padlocked closed, unless serving sprinkler or other critical systems, in which case they should be in the open position.

• All existing physical security measures must be put into effect and ideally external doors to a property should be secured with five lever mortise deadlocks. However depending on the type of doors this may not be possible and if we can give further guidance in this regard we are happy to assist.

In some instances insurers may require external boarding of windows, but if the building has 24 hour onsite security then this might be waived, providing the external checks outlined above are being undertaken.

• Any intruder and fire alarm detection systems must be set, maintained and any monitoring contracts (such as Redcare) continued in force.

• Letter boxes should be securely blocked, ideally by screwing shut with non-return headed screws so as to prevent any accelerants or lighted materials being passed through.

• The empty property should be cleared of combustible waste both internally and externally. The regular checks should also look for signs of fly tipping, which can provide a would be arsonist with fuel for a fire and if present these should be removed as soon as possible.

• Similarly, any damage or graffiti or overgrown vegetation which can indicate the vacant condition of a unit should be repaired or removed as soon as possible.

• Tanks containing heating fuel and other flammable products should be drained and precautions taken to prevent the explosion of residual vapours.

• Where the site is open and susceptible to potential travellers, the use of concrete blocks or ditches should be considered.

• The maintenance of the property in a safe condition is also important. This is necessary to safeguard the health and safety of those performing the regular checks but also because the owner's/leaseholder's duty of care applies equally to trespassers, who might include children since empty space can attract them as a play area. This will almost certainly require a review of the formal health and safety risk assessments for the property.

It may also be necessary to notify the local authorities, police or fire service of the vacant nature of the property and any relevant changes which have been made.

• Where voids are being maintained in condition for immediate letting and plant such as lifts and pressure systems are kept operational, owners need to ensure that they are inspected as required under the appropriate safety regulations. This needs particular awareness when such units are taken back from tenants who will previously have been responsible for such inspections and the property and its plant will need to be added to the owner's emergency inspection programme.

Ultimately all owners, tenants, managing agents and local property managers will have to use a degree of subjectivity as to what is most appropriate according to individual circumstances and in some cases legal advice might be necessary, but the JLT real estate team would be happy to provide advice if required.