The growing threat of cannabis cultivation for landlords

The illegal cultivation of cannabis is a growing problem for buy to let property owners – police discover a cannabis farm every two days in the Capital, according to Scotland Yard data, and police in Lincolnshire uncovered 75 cannabis farms across the county in one year. Until recently, cannabis cultivation was generally large scale, often taking place in industrial units, remote warehouses and disused farm buildings. Now, the police are increasingly finding smaller scale cannabis farms in residential private rented properties, many of which they describe as death traps.

With statistics showing that 90 per cent of cannabis farms are being set up in residential properties, rental homes are particularly attractive to growers as there is no paper-trail – the properties are not connected to the gangs running the operations. Renting out several properties also helps criminals spread the risk should they be caught.

 

The threat of cannabis farms on landlords and the wider community

Finding a cannabis farm in your rental property is one of the worst things that can happen to you as a landlord. The criminals behind cannabis farms may be involved in other illegal activity such as criminal gangs and human trafficking. They can render your property uninhabitable and your property will become a crime scene, preventing you from re-letting it or carrying out repairs. You may even find yourself implicated if you have not taken the necessary precautions, putting your reputation at risk.

“Cannabis farms pose a real threat to landlords today. If their property is turned into a cannabis farm, not only are they at risk of unwittingly becoming involved in a police investigation, but cannabis farms cause enormous damage to a property.”

– Melissa Choules, Senior Claims Handler at Hamilton Fraser Total Landlord Insurance

At Hamilton Fraser Total Landlord Insurance, we have seen a rise in cannabis farms. In particular those that cause major fires within properties due to the rewiring of electrics and overloading of sockets from heat lamps. Last year (2019), we received 10 cannabis farm claims, three of which involved major fires. This is more than double the number of claims we received the previous year.

Damage caused by cannabis farms can be extensive and very expensive to rectify.

“For example, the latest cannabis farm claim we dealt with was for damage caused by a fire which started due to the tenant rewiring the electrics. The stairs and ground floor ceilings all collapsed and the entire property was damaged by smoke. We paid out nearly £25,000 for damage to buildings, as well as another £1,000 for loss of rent.”

– Melissa Choules, Senior Claims Handler at Hamilton Fraser Total Landlord Insurance

Police warn that those tampering with energy meters risk electrocution, severe burns and increase the risk of fire due to exposed wires and connections that can easily become overheated. Worryingly, data released last year showed that police investigations into the theft of electricity were up by 13 per cent on the previous year, with cannabis factories largely blamed for this rise.

The cultivation of cannabis can also result in mould and water leakage from hydroponics and irrigation systems, as well as damage caused by knocking through walls for ventilation and installing fortifications to stop easy access.

With rented homes increasingly being turned into potential death traps, illegal cannabis farms pose a huge threat not only to landlords, but also to the safety of people living in neighbouring properties. Nobody wants to live next door to a cannabis farm, yet towns and cities across the country are now blighted by criminals running cannabis factories from residential, often rented, properties. So, it is important that landlords can recognise the warning signs and know how to protect themselves and their neighbours against the risk of unwittingly becoming a victim of this trend.

What should landlords be looking out for, and what steps can they take to prevent cannabis growers gaining access to their property in the first place?

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The growing threat of cannabis cultivation for landlords

Warning signs that your tenant may have turned your property into a cannabis farm

Landlords need to know the tell-tale signs that their rental property could have been turned into a cannabis farm. Here are the key indicators to look out for:

  1. Neighbours may report unusual tenant behaviour – for example lots of activity when tenants first move in, a large number of visitors at all hours of day and night, paranoid or antisocial behaviour and even tents in the garden (as the property is too humid to sleep in)
  2. Tenants seeking to deter landlords from visiting the property or asking too many questions may offer to pay rent upfront, hand over large deposits, or make cash payments
  3. A major increase in electricity consumption can be a sign of cannabis cultivation, which requires large amounts of heat, light and humidity
  4. There are also a number of physical indicators that landlords should look out for, some of which can be observed from outside the property:
  • Excessive fortification of the property to prevent easy access
  • Silver duct tape around the windows, which may also be blacked out
  • Humidity in the property which can be seen in condensation, steamed up windows, peeling wallpaper and mildewed walls
  • A sweet, sickly pungent smell emanating from the property, which growers sometimes attempt to conceal with the excessive use of air freshener
  • Powerful lights (typically 600W) that are on both day and night
  • Extra ventilation equipment
  • Electrical wiring that has been tampered with
  • Paraphernalia that growers use to cultivate cannabis, stored either inside or outside the property, including reflective materials, bulbs, soil, fertiliser, rubber tubing, bubble bags and self-seal bags
  • Snow melting unusually quickly on the roof in winter and birds gathering on the roof, as it is warmer than others in the street
  • Whirring noise from fans

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How can you reduce the risk of your property being turned into a cannabis farm?

Fortunately there are steps you can take to minimise the chance of criminal operations in your rental property, largely involving ensuring that you carry out regular visits and find the right tenant.

 

1. Carry out regular visits and inspections

Warning bells should ring if tenants routinely refuse you access to the property. It is important to conduct regular visits to your property and it’s advisable to do so within the first three months of the tenancy, ideally carrying out a first visit after one month. Follow the steps in our guide, How to inspect your property, to ensure that you are providing adequate notice (at least 24 hours’) and following best practice. It can take as little as three months for cannabis to be raised to cultivation, so early inspection is vital.

If you communicate to tenants at the outset that you will be doing this, it may even deter a would-be cannabis grower from targeting your property.

If access is denied, check for the warning signs that don’t require you to enter the property, such as blacked out windows and lights on constantly. You should also keep records of repeated failed attempts to gain access to your property for an inspection without the tenant providing reasonable grounds. This may be needed if you end up pursuing possession proceedings.

For landlords who don’t live nearby, it’s a good idea to get to know the neighbours so that they can alert you to any usual behaviour.

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2. Find the right tenant

Criminals are mainly using rental properties advertised through social media for their cannabis farms, hoping that in this way they can avoid formal checks. Taking on a reputable letting agency to find tenants is a lower risk option.

Police have warned that criminals often use a ‘front couple’ to visit a property. After they have taken possession of the property, they will disappear without a trace, to be replaced by the criminals, who will then convert the property into a cannabis factory.

This is why it is really important to visit regularly and ensure that the person you rented to is actually the person occupying the property.

Even if the tenant is genuine, remember that many criminals will go to great lengths to portray themselves as an ideal tenant in order to find the perfect property.

So, even if you think you have found a great tenant, it is still important to carry out regular visits to the property.

3. Carry out thorough checks

“Unfortunately, criminals are very good at coming up with false papers, so you need to make sure the referencing is really thorough. Bank statements, driving licences and utility bills all need to match up, too.”

– Paul Shamplina, Hamilton Fraser brand ambassador and founder of Landlord Action

It is vital that landlords and letting agents carry out thorough due diligence to confirm that tenants are who they say they are and that they are traceable.

Paul Shamplina, Hamilton Fraser brand ambassador and founder of Landlord Action, says: “Landlords are understandably keen to get a tenant into their property, but it’s a false economy to skimp on referencing as the costs in terms of repairs and lost rent can run into hundreds of thousands of pounds.”

Paul advises landlords to be wary of prospective tenants who offer to pay several months’ rent in advance, want to keep utility bills in the landlord’s name and ask for complete privacy (no inspections).