What it does
For an owner or general lessee, CP 00 10 treats the building as vacant unless at least 31% of its total square footage is rented and used for customary operations, or used by the owner. CP 04 60 replaces that percentage with the "Minimum Percentage Rented/Used" shown in the Schedule for each building.
Key provisions
- Applies to the Building and Personal Property, Condominium Association, Condominium Commercial Unit-Owners and Mortgageholders E&O coverage forms and the Standard Property Policy.
- In the Mortgageholders Errors and Omissions form, it rewrites the vacancy condition (more than 60 days) to use the scheduled percentage.
- In the Standard Property Policy, it defines the building as vacant or unoccupied unless at least the scheduled percentage is not vacant or unoccupied.
Who sees it
Underwriters may use it to require higher occupancy than 31% on buildings they consider at risk. In other cases it lowers the threshold to accommodate a building that is legitimately partly leased.
Quoting and selling notes
- Check the percentage in the Schedule against the current rent roll and expected move-outs. If occupancy drops below it for more than 60 days, vacancy penalties apply.
- For a fully or nearly empty building, use a Vacancy Permit (CP 04 50) instead.
