Commercial Squatting

On 1 September 2012, it became a criminal offence to squat in a residential building in England and Wales. But, while this gave homeowners greater protection, owners of commercial properties can still find themselves facing large bills and lengthy eviction processes if squatters move in.

Under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the offence of squatting in a residential building carries a penalty of up to six months’ imprisonment and a fine of up to £5,000. However, despite pressure
on the government to extend the act to commercial property, this has not yet been realised.
Property owner risks

Unfortunately, with squatting criminalised in residential property, it‘s resulted in an increase in commercial properties. Since 2012, squatters have moved into everything from empty office blocks to pubs, for example, the 300-year-old Cross Keys in Chelsea, historic buildings such as the Grade II listed former Royal Mint Court property opposite the Tower of London, and even a former rehab clinic that once treated Michael Jackson.
While the squatters can target all sorts of commercial properties, the owners usually face significant costs as a result. On top of the legal fees associated with evicting them, owners may need to pay for repairs to the property.
As an example, when squatters were evicted from an empty office building in Lambeth in June 2013, the owners were left with a bill for more than £100,000.In addition, the extensive damage caused by the squatters forced them to rethink their plans to refurbish and let the offices again, eventually opting to demolish the building and redevelop the site instead.

Business issues

Business interruption issues can also arise while the property is occupied. Rental income could be lost while the squatters are in residence and some businesses may even have to halt production if a property is critical to their operations.
It‘s even possible that a long-term squatter could claim ownership of a commercial property or land. This was recently the topic of the true story film Hampstead, in which Harry Hallowes was able to use squatters ‘rights to claim a £3m patch of Hampstead Heath.

It’s an extreme case but once a squatter, or succession of squatters, has lived in a non-residential property continuously for 10 years, they can apply to HM Land Registry to become the registered owner. As the present owner, you ‘ll have 65 days to object to the application, and this is usually sufficient for the application to be rejected. After a further two years, if you haven‘t tried to remove them, they‘ll be able to apply again, with HM Land Registry normally allowing them to register as the owner at this point.

Your rights

Given the risks involved, understanding your rights is essential if squatters move into your commercial property. Firstly it‘s important to note that, although they might not have your permission to be there, occupying your non-residential property isn‘t a crime.

The police will only take action if the squatters commit other crimes when entering or staying in the property. These crimes could include causing damage, stealing from the property, flying-tipping and ignoring a noise abatement notice. However, in practice, unless there is extensive damage or disruption to the peace, the police are usually reluctant to intervene.
While the squatters might not be committing a crime living in your property, if you try to remove them yourself using force, or the threat of it, you could face criminal charges.

Instead, to remove them from your property, you will need to pursue civil remedies. Two options are available – an interim possession order (IPO) or a claim for possession – with both taking time and money.

England and Wales. Eviction orders

An IPO is an option if it‘s fewer than 28 days since you discovered the squatters have moved into your commercial property. You will need to apply for this at your local county court and pay a fee for your application.

The court will issue the claimant with documents confirming the application for an IPO. These must be delivered to the squatters either directly or by fixing a copy to a prominent part of the occupied premises.

Once an IPO is granted, the squatters will then be committing a criminal offence if they fail to leave the premises within 48 hours. If it‘s been more than 28 days since you found out they were in your property, you will need to make a claim for possession. Again, a claim is issued in your local county court, giving the squatters at least two days’ notice of the hearing date. A possession order will usually be granted at the hearing, although, if an eviction is necessary, it can take a few more weeks before the bailiffs arrive.

Protect yourself

As prevention is definitely better than cure, a robust approach to risk management is essential if you own commercial properties that could be targeted by squatters.

• Increase security in vacant buildings e.g. fence off or barricade the premises.
• Disconnect utilities.
• Arrange temporary occupancy arrangements to avoid having empty premises for a long period of time.
• Ensure, where possible, you make regular visits to monitor the property.
• If necessary, provide a security patrol.
• If you do find individuals in your premises without your consent, contact the police.

Courtesy of Allianz Insurance