Warnings By Insurer To Landlords – Damage Caused By Cannabis Farms Will Not Be Covered
There are daily stories covered in the media of the increase in damage caused by cannabis farms in rented properties. Insurers are becoming wary of this and one has issued a stark warning that they may not cover damages caused by this activity.
Latest figures released have revealed that during 2011 and 2012, 7,865 cannabis farms were found which was up by 15 per cent from 2009 and 2010.
Richard Burgess from a landlord insurance specialist company said: “Type ‘cannabis farms landlord’ into Google and you’ll see hundreds of stories of landlords facing huge repair bills, having unwittingly let their property to tenants who have then turned it in to a cannabis farm.
“Sadly, most landlords assume that this type of damage – which can include ripping up floor boards, knocking through walls and creating an indoor greenhouse environment – is covered by their landlords insurance, particularly if they have the ‘malicious damage by tenant’ element of cover.
“Not all insurers provide malicious damage by tenant cover as part of a landlord insurance policy, though at ours, we do. What landlords need to understand however, is that while all of our insurers will consider a cultivation of cannabis claim under the malicious damage by tenant section, some will have limits, typically up to £5,000. This means that any repairs can still end up costing a landlord tens of thousands of pounds.
“Finally, part of their contract with their insurer is that they – or a representative – makes regular, logged, checks on the property, including sheds. So, the signs of cannabis growing would be clear to see at an early stage. Ignorance is no defence.”
Burgess urges landlords to carry out stringent checks on new tenants and that they should always carry out regular inspections of their properties. He says to always be on the lookout for tell tale signs from tenants who may not be what they seem. Anyone who pays particular attention to the electrics within the property, references to new jobs that do not "mirror" the accompanying paperwork.
Sadly those who wish to pay six months' rent up front may not be bona-fide in some cases.