Many clients are looking at the inevitable prospect of leaving their home in the not-too-distant future because they will need residential care.
They and their loved ones may need assistant with wills, LPAs and deputyship applications. In many cases, clients will be leaving their homes unoccupied and at risk – another further issue that solicitors need to address promptly. The risks associated with unoccupied residential property are similarly an immediate issue for the PRs when the property’s owner-occupier dies.
The volume of empty properties in the UK is an increasing problem: according to government figures released in November 2022, 257,331 homes in England alone were classed as long-term empty homes (i.e. vacant for more than six months).
So, what are the risks associated with an empty domestic property? The potential risks include attracting criminals (with the risk of arson, burglary and criminal damage), flooding and water damage, burst pipes in winter and electrical faults. There’s also the chance of squatters moving into the property, especially in elongated periods of non-occupation.
Unoccupied domestic property insurance
Practitioners are reminded of Practice Enterprise’s own unoccupied property insurance product which is cost-effective and comes highly recommended. Crucially, the product is geared specifically to cover the risk of residential properties left unoccupied because the owner is moving into a care or residential setting; or has recently died. Unlike many policies for unoccupied properties, Watchman’s policy includes cover for risks including malicious damage and subsidence.
The existing insurer (assuming there is one) will expect to be notified that the property is now empty. Most insurers will end existing cover within a certain period of being vacant (usually 30 and 60 days). If it’s hoped that the individual is going temporarily into a home for respite care for just a few weeks, there may be no immediate need to take out unoccupied insurance cover with Watchman. But given the fragility of the elderly, it’s certainly worth looking into sooner rather than later.
One of the problems with many unoccupied property insurance policies on the market is the insurers’ requirement to pay an upfront premium to the insurer. This adds to the pressures already being exerted on the individual‘s finances because of steep care home fees.
A key benefit of the Watchman policy is that you do not have to pay a full premium at the start – just a small initial deposit. Instead, the policy premium is calculated on a day-by-day basis for up to a year (or if the property is sold or transferred sooner), then after 12 months you settle the premium for the year of cover you have had. Then you can start again with a deposit for another year if the property still needs to be insured.
The policy is also simple and straightforward to set up and can usually be secured the same day with one quick call to the experienced and helpful people at Straight Solutions. They can immediately provide cover by telephone and you then have 14 days to send the deposit premium and complete the application form. There are no premium credit agreements, no hidden charges or cancellation fees and cover is calculated at a fixed daily rate based on the rebuilding cost of the property.
Unlike most others, Watchman policy requirements are easy to understand and comply with. For example, most other policies have conditions relating to security devices and use terms many lay persons do not understand, this can lead to claims being declined. With Watchman the property simply needs to be inspected every 30 days (not 7 days as many policies state) and you just have to set any existing security features in a locked position and remove all keys away from the house.
All policies for unoccupied properties that we have examined require heating to be maintained on a low setting (or the system drained) during the winter months.
Where the deceased’s home is left unoccupied, practitioners should explain to the PRs the importance of arranging unoccupied property insurance (the Watchman insurance policy is ideal). Putting suitable cover in place helps to discharge their duty as trustees to protect the estate assets. If the property is left uninsured (or under-insured) then the trustees could find themselves personally liable for damage to the property that causes a loss to the estate.
The property owner’s family – or the PRs in the case of a deceased estate – must still take practical steps, including securing the property and removing or hiding any valuables that could attract burglars. Utilities should also be turned off. And if there are neighbouring properties, the owners could be asked to let family (or the PRs) know if they see anything suspicious. In our experience, people are always willing to be neighbourly.
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