Owners of commercial properties are rightly concerned if a property is lying vacant. There is no tenant to provide income via rent, the owner will be wholly responsible for repairs and maintenance, and the non-domestic rates will not be passed on to a tenant. It is also common for a vacant property to quickly show signs of its non-occupancy. There will, for example, not be the usual comings and goings, the lights or the heating may not be on, and windows might not be cleaned as often as they would be when the building is in use. Insurers (duly notified) may often impose conditions or charge increased premiums.
A vacant property can also act as a magnet for those intent on causing trouble. Graffiti and the usual signs of vandalism are not uncommon in and around vacant properties. The risk of damage to the property is one that an owner will have to weigh against the cost of taking measures to deter such acts.
Is an owner of a vacant property in Scotland under a legal duty to protect neighbouring properties? Damage to your own property is one thing, but when that damage starts to impact on a neighbouring property, an altogether different friction between neighbours can arise.
This was the issue that arose in the 1987 Scottish House of Lords case of Maloco v Littlewoods Organisation Ltd. Littlewoods purchased a cinema (with the intention of demolishing it and replacing it with a Littlewoods store).The building lay empty and soon became a target for youths. Neighbours were aware of repeated intrusions into the building and attempts to start fires. Littlewoods were, however, unaware of these incidents.
Ultimately, a significant fire took hold within the cinema, destroying the cinema and leaving both a neighbouring church and a neighbouring billiard hall/café severely damaged. The court had to decide if the neighbours could claim against Littlewoods for the damage caused to their properties.
The House of Lords said no. It did not consider, in the circumstances of the case, that the owner of a property owed a duty of care to owners of adjoining properties in respect of acts by intruders which resulted in damage to those adjoining properties. Imposing such a wide-ranging duty on property owners would create an unreasonable burden on ordinary property owners It was a step too far to say that, simply because Littlewoods had a vacant property, it was reasonably foreseeable that the criminal acts of third parties would result in a fire with such severe consequences. In any event, the mere fact that this might be foreseeable wasn't sufficient to impose liability. Liability is not imposed simply because one party has created an opportunity for a third party to act in a way which could have been anticipated.
Commercial property owners in Scotland can be reassured that they are relatively free to take their own decisions as to how they manage their own vacant properties. That being said no owner wants the condition of their building to needlessly deteriorate and steps taken by such owners to protect their properties will indirectly benefit their neighbours. If, however, the owner becomes aware of events which are likely to give rise to damage being caused to a neighbour's property – knowledge that was lacking in Maloco - then it would be prudent to act on this and take advice (including from insurers) as to what should be done about it. The court has made it clear that imposing liability on owners such as Littlewoods would only occur in very rare circumstances, but the door hasn’t been completely slammed shut on such claims. If you know someone is setting fire to your property and you do nothing about it, it remains possible that the court might impose liability if a fire in your property subsequently damages a neighbouring property.
Those owning adjoining properties should also act to protect their own position, by taking steps they consider prudent to protect against the risks of neighbouring a vacant property. If the events of Maloco repeat themselves, such owners may struggle to pursue claims against their vacant neighbour leaving them with only a claim against their own insurers.
You can also listen to Craig Watt and David Ford's accompanying podcast episode For want of a nail.
Contributor
Senior Associate & Solicitor Advocate
