Continuing Financial Crisis Leads to Vacant Properties, Vulnerable to Vandalism, Metal Theft

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Brooklyn, N.Y. — Thieves who broke the locks on an unoccupied apartment building stripped the entire building of its copper piping, valued at more than $30,000.

Las Vegas — The entire electrical system, including copper wire and switch gear, was stolen from a vacant grocery store in an otherwise-occupied commercial shopping center. The thieves damaged the plumbing system and stripped the rooftop air-conditioning units of copper coils. The insurance claim exceeded $250,000.

Minneapolis, Minn. — When thieves damaged a vacant apartment building to steal copper pipe, they broke the piping that carried natural gas to the building. Later, a spark ignited the accumulated gas, causing an explosion that flattened the building. The building was in foreclosure and had not been secured.

In communities across America, several factors have combined to create a “perfect storm” of property risk. First, the growing credit crisis has led to record numbers of foreclosures, leaving scores of residential and commercial properties vacant. Second, fiscal pressures mean that many communities do not have sufficient law enforcement personnel to patrol these properties. Third, market prices for metals and other commodities have skyrocketed in the past several years.

The result?

Increasingly, vacant properties are being targeted by thieves who strip buildings of copper wiring and plumbing; appliances; woodwork; and other materials — even windows and doors. These criminals can cause enormous damage, often rendering the buildings uninhabitable and unsalable.

Foreclosed properties are particularly vulnerable. Because electric and telephone service is usually shut off, the security alarms, monitoring systems and lighting may not be operational. And foreclosed properties are easy to find, not only because of signs on the property, but because lists of foreclosed properties are readily available from government agencies. Thieves are known to have obtained foreclosure lists to identify properties that they can burglarize with little risk.

Some New Laws May Help Track Thieves

Until recently, property owners and law enforcement officials had little recourse. It is easy for thieves to convert scrap metal to cash, and unscrupulous recyclers readily accept salvaged copper, often paying up to 90 percent of market price. Most of the stolen material is difficult to trace, and operators of scrap yards and recycling centers have not been required or encouraged to take any action to impede criminals or to report illegal activity. Although metal prices have dropped, metal theft continues to plague property owners and law enforcement officials.

In California, several new laws should assist state law enforcement officials in identifying and apprehending these thieves. Among other provisions, the new laws require recyclers to maintain identifying information about scrap metal sellers and report this information to local police each month. The bill also requires recyclers to withhold payments from sellers for three days; this removes the “quick cash for scrap” situation that has made metal theft popular.

According to the National Conference of State Legislatures, at least 26 states have passed widely varying laws to address the theft and sale of scrap metal. While a few of these laws criminalize the actual theft of metal components, most of the legislation focuses on requiring recyclers and scrap dealers to maintain records of their transactions, including the identities of those who bring in scrap for sale. Similar efforts are underway at the federal level. In October 2008, bills were introduced in the U.S. Senate and House of Representatives that would require certain metal recyclers to maintain records of transactions. No further action has been taken with the proposed federal legislation.

While these laws may help enforcement officials track down metal thieves and unscrupulous dealers, property owners should still take all necessary steps to protect vacant or unoccupied properties, because by the time the recycler has to decide what to do with scrap metal brought in for resale, the property damage has already been done.

Unoccupied Properties Require Stringent Risk Management

A vacant or unoccupied property may be as large as an entire manufacturing complex or as small as a single apartment or a small retail space in a strip mall. Regardless of size or location, vacant and unoccupied properties should be protected by appropriate, adequate insurance and sound risk management and maintenance programs. Following are suggestions agents should pass along to customers.

Obtain Appropriate Insurance. Normal commercial property policies generally exclude vacant or unoccupied properties or impose specific coverage restrictions. Agents should help their customers to determine the best coverage for their property and educate them on what the policy covers. Because many policies will not cover theft from a vacant property, purchasing extra coverage and strengthening security to safeguard against theft should be a consideration. Customers should work with their insurer’s loss control professionals to identify and manage risk at their properties. Agents should advise customers to inform them immediately if a space becomes vacant or unoccupied, or if a tenant moves into a previously unused space. Failure to notify an insurer may void coverage.

Strengthen Security. Second to proper insurance, a sound security plan is essential to protect assets.

Keep Intruders Out. Customers should be advised to strengthen perimeter security. Ensure that all doors and windows have working locks. If the property is unoccupied for an extended period, owners should cover the doors and windows to prevent broken windows and illegal entry. Sturdy fencing around the property should be installed. Fences, gates, locks and other barriers should be in good condition. Access to roofs and upper floors should be prevented.

Use Technology. Property owners should invest in the best security technology that they can afford. Alarms should be in working order and set to trigger lights, sirens, horns, or other deterrents and to alert police or a monitoring service. A video surveillance system, with cameras trained on doors, driveway and parking areas, and other vulnerable areas can help.

Keep the Lights On. Good lighting is an essential deterrent. Owners should install security lighting around all buildings, especially around entrances and windows. Ensure that there are no dark spots where trespassers can hide. Lights should be connected to motion detectors. Photocells can turn on the lights automatically at night or in poor weather.

Post Warnings. Prominent, strongly worded signs can discourage would-be thieves and vandals, both by alerting them to security measures and by conveying that the property owners are monitoring the area and actively engaged in security. Examples include “No Trespassing,” “Video Surveillance in Use,” “Door Alarmed,” “Police Take Notice,” “Neighborhood Watch,” “Beware of Dog,” “No Loitering,” etc.

Maintain the Property. Would-be criminals look for properties where poorly-maintained landscaping, graffiti, trash, broken windows, poor lighting, and general disrepair indicate inattention to security. Owners should maintain buildings and grounds properly by attending to lawn care, snow and leaf removal, repairs, lighting, signage, etc. They should remove graffiti as soon as it appears (after photographing and reporting it to the police). Tell them to make repairs as soon as broken or worn items are noted.

Be Present and Aware. The best protection for property is constant awareness and monitoring. Owners should keep abreast of reports of criminal activity in their area. Property should be inspected often, but on an irregular schedule. Inside and out, they should check the integrity of all security measures, making repairs and updates immediately. They should maintain a narrative and photo log of all inspections, noting date and time, condition of the property, etc.

Work with Law Enforcement and Neighbors. Owners should inform police that property will be empty; ask for property patrols and notification of irregularities. If they see suspicious people or vehicles, or evidence of trespassing, theft, or other criminal activity, they should contact law enforcement immediately. All incidents and thefts, no matter how insignificant, should be reported. A small incident may be part of a larger pattern of crimes for which every bit of information is helpful to the police investigation. If customers observe a crime in progress, they should not attempt to interfere and not confront the criminals. They should leave the scene and call the police, noting the details in their log. They should not do anything to endanger themselves or others. Leave investigations and pursuits up to the police. Owners should know their neighbors; ask them to alert police if they see suspicious activities, vehicles, or people on or near your property, then do the same for them.

Topics Fraud Legislation Law Enforcement Property

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