Closing a district building: Simple guidelines to reduce risk

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In this challenging economic climate, many Michigan school districts must make difficult decisions in order to save money and balance their budgets. One method of reducing costs is to consolidate students into fewer schools and close unneeded buildings. When this decision is made, it is important for districts to take the following steps.

1. Notify your property/casualty provider that your district intends to close a building.
2. Give your property/casualty provider the following information:

  • Address of the vacant building;
  • Date of building closure;
  • The previous function/use of building;
  • Reason for vacancy (e.g. declining enrollment, building deficiencies, zoning issues, loss of tenant);
  • A photograph of the building from a front angle and if possible, an opposite corner angle from the rear of the structure;
  • Current status of property (e.g. for sale, for lease, plan to reoccupy, abandoned or no longer usable, or other reasons); and
  • Status of building services:


HVAC:          Disconnected        Turned off     Operating as normal
Plumbing:     Disconnected        Turned off     Operating as normal
Electrical:     Disconnected        Turned off     Operating as normal

3.    Prepare and secure the premises:

  • If heat, water and electricity are left on in a vacant building, the structure should be inspected regularly and the thermostat should be set to no less than 55 degrees.
  • Available security systems should remain active.
  • If functioning, exterior lighting should be used at night.
  • Ask neighbors to be alert and notify the district if damage or any unusual activity appears to have taken place.
  • If the building will be rented or leased, notify your district’s property/casualty provider so it can review the leasing contract and verify it contains a “hold harmless” agreement and that the district is named as an additional insured on the policy.

Additional considerations

  • Is the property under construction or renovation?
  • Is the property being considered for other use?
  • Are repairs needed on the building and if so, will they be completed?
  • Is the building secure against unauthorized entry?
  • How frequently are security checks conducted on the property?
  • Are additional risks present (e.g. pool, playground, skate park, vehicle trails)?

Questions?

Your district’s property/casualty provider is the best resource for questions or concerns related to the process of closing school buildings.

Article provided by the MASB-SEG Property/Casualty Pool.