If you discover that your tenants have been cooking more than dinner in your rental property, it’s going to take more than a going over with some ‘spray and wipe’ to clean the premises. But is meth contamination covered by landlord insurance?
Finding out that your investment property has been used as a drug lab is more than just distressing, it’s inevitably expensive. Whether your rental was turned into a cannabis ‘grow lab’ or used to ‘cook’ methamphetamines, chances are there is going to be substantial damage to the premises.
If your property has been used as a cannabis farm, you’re likely to find extensive damage as a result of the tenants finding ways to irrigate, for example by cutting huge holes in the ceiling and running water into the rooms. The result of these makeshift plumbing exploits is often extensive water damage and costly repairs to reinstate pipes, systems and fittings.
The damage from a clandestine meth lab may not be as obvious, except in instances where explosions have occurred, but can be just as extensive in terms of contamination.
Dangerous chemicals are used when ‘cooking’ ice and other meth-based drugs. Explosive and corrosive materials are key ingredients in the recipe – and the cocktail of chemicals can leave a highly toxic residue.
This chemical residue can seep into soft furnishings, carpets, timber floors and door frames, and even walls and ceilings. It can also pose health risks if the level of contamination is high enough.
If you suspect your rental has been used to manufacture methamphetamine, or that your tenants have been smoking meth inside, you should get the property tested (using a government-accredited testing agency). If testing reveals contamination levels of 0.5µm (micrograms) per 100cm2 or higher, the property is deemed unsafe and remediation is required.
If your rental is contaminated, it’s going to take more than a vacuum and wipe over to make the property fit to live in. It’s going to require specialist cleaning to decontaminate and remediate the premises. And that service comes at a price – in some cases costing tens of thousands of dollars.
Without forensic cleaning, there is risk that the property will remain contaminated for years to come, potentially posing health risks for future tenants. You should also be aware that the lingering presence of toxins can present a liability risk – allowing a contaminated home to be occupied may breach the residential tenancies act (duty of care) in your state/territory or even contravene building and health legislation, leaving you exposed to legal action and claims for compensation.
The costs to clean and repair damage resulting from a drug lab and/or meth contamination can be expensive. But is it covered by landlord insurance?
In many cases, the answer is ‘no’. Often, landlord insurance policies exclude claims relating to drugs, whether it is a blanket exclusion or one related to a premises being used to generate income or used for illegal purposes. This isn’t the case for EBM RentCover. Our RentCover Ultra and RentCover Platinum policies provide up to $70,000 cover for damage to the building and contents caused by meth labs, meth contamination (so long as testing confirms the level is 0.5 micrograms or above) and hydroponic set-ups. Expenses relating to testing, remediation and repairs are included. The cover is available under the tenant damage section of our policies.
It’s an inclusion that has proved invaluable to a number of our landlords who have found themselves facing repair and decontamination bills. Since 1 January 2021, EBM RentCover has settled more than 25 claims relating to meth labs and contamination. The average claim payout for meth lab clean-up was around $62,000, while the average claim payout for meth contamination was more than $36,000. EBM RentCover may also cover loss of rent while the property is being remediated.
Of course the repair and cleaning costs vary on a case-by-case basis but can often include expenses relating to:
- containment chambers (more on this below) being installed outside the entry,
- soft furnishings such as blinds, curtains and porous items being replaced, and
- all surfaces being thoroughly cleaned.
What is a containment chamber? Well, before any decontamination or cleaning work begins, a decontamination (or containment) chamber is set up at entry point(s) for safe entry and exit. They are set up and seal off each room and prevent cross-contamination.
While claims for drug lab clean-ups and meth contamination aren’t that common, when they do occur they are expensive, which is why having a landlord insurance policy that covers these events is a prudent investment for landlords.
Want to learn more about what is covered and what isn’t? Chat to the EBM RentCover team on 1800 661 662 or click here for product information.
*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are here, contact 1800 661 662 if you have any questions.