Question: I suspect tenants are cultivating drugs in my rental property – what should I look out for?

Answer: By Carolyn Parrella, Executive Manager, Terri Scheer Insurance

Rental properties can be targeted by people looking to manufacture drugs. Illegal drug manufacturing can cause considerable damage to rental properties and cost the landlord thousands of dollars in repairs and subsequent lost rent. Tenants involved in cultivating illegal drugs, such as cannabis, methamphetamine and ecstasy can go to great lengths to hide such activities.
Therefore temporary drug laboratories in rental properties can be difficult to detect if you do not know what to look out for.

The following tips may help property managers identify any suspicious or illegal activity:

Conduct regular property inspections

Carrying out regular property inspections will increase the chances of detecting any illegal activity, assist landlords to lodge insurance claims as soon as possible and potentially mitigate loss. It takes three months to cultivate a hydroponics crop so carrying out quarterly inspections will increase the chances of detecting any illegal activity as soon as possible. When conducting an inspection you should look for signs that the property is being lived in. Illegal drug manufacturers generally do not live at the properties they use to cultivate drugs, therefore the premises may appear under furnished or neglected.

Modifications to property
Some hydroponic systems or temporary drug laboratories require specific modifications to the property. Check for potential tampering of the property. Some hydroponic set ups require pipes or hoses to be filtered through the roof or a designated man hole. Look for holes in the ceiling as they could lead to hydroponic systems. It is also a good idea to check whether the meter board has been tampered with or rewired. Holes in nearby walls or built-in cupboards are common in order to feed wires to a power source.

Look out for unusual items or activity
Certain items are commonly used to manufacture illegal drugs, including glass flasks, beakers, rubber tubing, gas cylinders, chemical containers, drums, drain cleaner, acid garden fertiliser and cough, cold or allergy medicine. Portable air conditioners are also often used when cultivating hydroponic crops.

If such items are present at the property and appear inconsistent with practical use, it may indicate the presence of a drug laboratory. Windows that are constantly covered or sealed during the day and night, and rooms that are covered in aluminium foil are also common signs that drugs have been manufactured at the property.

It’s a good idea to regularly review water bills for the property. A dramatic spike in water consumption could signal drug manufacturing as more water is generally needed to cultivate drug crops.

Malicious damage to property
From an insurance perspective, any damage caused by drug cultivation, such as holes in walls and doors, through to damage to carpets and floor coverings is considered a malicious act, and likely to be viewed as an insured event.

If there are intense lights being used as part of a hydroponics set up it may visibly fade paintwork. Look out for colour variations on walls, particularly behind hanging pictures or artwork.

You should consider landlord preferred insurance policies to protect against this kind of damage.
Once a tenant has vacated the property, insurance assessors can be sent out to determine the extent of the damage to the property.

Report to police
Many landlord insurance policies stipulate that malicious damage claims must be accompanied by a copy of the police report or the name of the police station where the report was made.

If you suspect illegal drug manufacturing is taking place at your rental property, you should contact police immediately.

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Carolyn Parrella

Carolyn Parrella joined Australia's leading landlord insurance specialists, Terri Scheer Insurance, in 2004 and was appointed Executive Manager in 2009.
Carolyn oversees all operations within business, which aims to protect landlords against the risks associated with owning a rental property. These include malicious damage by tenants, accidental damage, legal liability for occurrences on the property that cause death or bodily injury, and loss of rental income as a result of damage to a property or a tenant absconding.
As a South-Australian based national insurance firm, Terri Scheer Insurance is the only company in Australia to specialise solely in landlord insurance.
Carolyn also owns two investment properties.

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