Home Info Centre Could you be managing a drug lab?
Could you be managing a drug lab?

Could you be managing a drug lab?

31 May 2019 4 mins read

The harsh reality is… people looking to set up drug labs often target rentals. Within the privacy of their rented four walls, some tenants are secretly growing and manufacturing illicit drugs including cannabis, methamphetamine, ecstasy and GHB.

There have been some cases where properties have been rented and the entire internal living spaces removed or destroyed to turn the house into a hydroponic drug lab. In order to convert the rental into a ‘grow house’, it is not uncommon for the tenants to take drastic measures, including:

  • Cutting holes in ceilings to redirect water pipes and install sprinklers, causing extensive water damage and leading to costly repairs to reinstate pipes, systems and fittings.
  • Re-wiring the meter box, requiring the electricity supply to be reconnected and often the home to be re-wired.
  • Stripping rooms of fittings and fixtures, which all need to be replaced.
  • Blacking out windows and even changing locks. 

Modifications to the home to set up a chemical lab are usually not as extensive, but the actual manufacturing of the drugs can result in fires and explosions, which cause significant damage, and the need to engage costly forensic cleaners to return the property to a tenantable condition. 

So, what should I look out for?
  • Unusual chemical smells that are not normally present in the area 
  • Numerous chemical containers (labelled solvent, acid, flammable) stored or stock piled 
  • Stained glass equipment and cookware 
  • Plastic or glass containers fitted with glass or rubber tubing 
  • Numerous cold tablet packages lying around or in the rubbish
  • Portable gas tanks or other cylinders not normally seen or used in the area 
  • Chemical stains around household kitchen sink, laundry, toilet or stormwater drains 
  • Yellow/brown staining of interior floor, wall, ceiling and appliance surfaces
  • Light bulbs being removed (to avoid the risk of a spark causing an explosion) 
  • Smoke detectors being disabled 
  • False walls being erected 
  • Curtains always drawn or windows blacked out

If a landlord or agent suspects the property is being used as a drug lab, the police should be notified immediately. 

Finding that an investment property has been converted into an elaborate hydroponic cannabis operation, or used to manufacture methamphetamine, can be a shock for the landlord, as well as a devastating hit to the back pocket – as the following EBM RentCover examples highlight:

  • After the PM was notified police had raided the house and found a hydroponic set-up, an inspection revealed holes cut in the walls and ceilings throughout the home. There was vent tubing, additional wiring and chains hanging from the ceilings – and hundreds of empty pots. The main power supply had also been altered and the home had been flooded, destroying the flooring. The policyholder received the maximum damage payout of $65,000 plus an additional $9,000 for loss of rent.  
  • In another property, despite only one room being turned into a grow lab, the damage bill topped $18,000. In addition to the one room damaged from the growing operation, the tenants had also altered the power supply, requiring the home to be re-wired and the main power box to be replaced. The landlord received a further $3,400 for loss of rent.
  • A landlord was paid out more than $42,000 after a drug lab had been found at the property. The cost of the forensic cleanup topped $25,000 and $12,000 was paid for lost rent; the balance of the claim went towards repairing damage including replacing benchtops and a dishwasher.
  • The PM had noticed an odd smell coming from the rental and notified police they thought the premises was being used to manufacture drugs. The police raid confirmed the apartment had been used to operate a chemical lab. The $25,000 claim included costs for forensic testing and specialist cleaning, lost rent while the apartment was uninhabitable and damage.

Every landlord wants a secure investment and reliable tenants. But, sometimes, not everything goes to plan. And, some events cannot be controlled. What can be controlled is whether landlords have adequate insurance. 

EBM RentCover is one of few landlord insurers providing protection for drug lab cleanup. It’s just another way we help landlords and property managers feel confident they have the right insurance solution in place to address issues that can have major ramifications – like finding out the rental has been used as a drug lab. 

*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 there, contact 1800 661 662 if you have any questions. 

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