Property Management Can Be a Lucrative Business, But Beware of the Squatters

3rd April 2013

Richard Brown, senior partner at NG Chartered Surveyors, says that property managers need to tackle the rise of squatters in commercial buildings in order to take advantage of opportunities in the market.

As 3cre so eloquently put it in their recent article, property management has traditionally been the scullery maid of the commercial property industry, but in the current economic climate it has become a source of steady income in an otherwise depressed market.

Property management – as opposed to the buying and selling of property – is the operation, control and oversight of real estate, in other words, making sure that a property earns its keep for the landlord.

It can be a lucrative business at a time when property prices are low, landlords are reluctant to sell and companies are struggling to access finance.

But for aspiring property managers out there, one word of warning: beware of the squatters.

There will be periods when property is vacant as tenants come and go, or if refurbishment works are underway – a temptation for squatters.

Squatting has traditionally been more of a problem in the residential rather than commercial market – with a balance of 60 to 40 per cent. But since last September property managers have seen a change of emphasis as a new law has made only residential squatting a criminal offence.

The Government has ruled that squatting in residential property is a criminal rather than civil offence that could cost squatters a six month prison sentence or a £5,000 fine, yet this law has not been applied to commercial property.

And because bedding down in commercial properties is still just a civil offence, police do not have the right to evict squatters from non-residential sites.

This is major oversight on the part of the Government, as it means that the balance has tipped significantly further toward commercial property. We’re already seeing that, since the new legislation has come into effect, squatting at commercial property has risen substantially as the perpetrators target commercial properties to avoid the repercussions of residential trespassing.

This has caused real problems for property managers, as they incur costs trying to evict and clean up after the squatters.

Like many other people in the property industry, I hope that the Government will impose an equally stringent law for the commercial sector.

Until then, the advice to current and aspiring property managers is to take effective measures to protect property. This includes regular weekly inspections to check security, carry out repairs and remove waste. Turn off all utilities and, if possible, padlock isolation valves, and increase mobile and fixed security.

I’d also recommend a clear and regular dialogue with insurers, who are increasingly concerned over vacant property issues. Levels of cover are substantially reduced by insurers on empty properties and premiums are increased, so make sure you know what your insurer covers if your property is empty.

If the number of squatters can be curbed, property owners will stay happy.

To find out more, feel free to contact us, give us a call on 0115 958 8599 or email