Move over ‘stoners’, cannabis attracts organised crime gangs

Warning: organised crime gangs are targeting rentals to set up cannabis farms.

Marijuana Farm

Perth investment property owners are being warned about the rising number of East Coast-based organised crime gangs renting privately-listed homes and setting up elaborate hydroponic cannabis operations.
 
According to WA Consumer Protection, 21 homes in the past seven months had been rented by members of South-East Asian gangs who used the premises to cultivate illicit drugs. Police seized more than $6 million in crops from these drug dens. 
 
While the toxic aftermath of a cannabis operation is far less than that of a meth lab, the damage to the property can be extensive. One unlucky landlord who found their premises had been converted into a hydroponic lab was left with a $70,000 damage bill. Another needed to find $20,000 to replace a destroyed ceiling and blacked out windows, install new locks (the tenants had changed them), and have the electricity supply reconnected and rewired.
 
Like all good farmers, growers need to water their crops – and the easiest way to do that is usually to cut huge holes in the ceiling and run 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. 
 
It’s not just water pipes housed in the ceilings, but also a myriad of extension cords providing electricity to lights, heaters/coolers and other paraphernalia. To access the electricity, the meter boards are usually tampered with and the home becomes a potential fireball-waiting-to-happen. 
 
Police estimate that the 21 grow houses have stolen over $1 million in power to cultivate crops. One landlord learned a valuable lesson after negotiating a higher rent with the tenants so that their electricity use would be covered – it backfired and he now faces an $85,000 power bill.
 
With Perth’s difficult rental market, high vacancy rates and tough competition for tenants, the gangs’ offers are attractive to landlords doing it tough. And desperation is leading to a lack of due diligence. 
 
A common factor in all 21 cases, was that the tenants had targeted privately-listed rentals (i.e. no real estate agent in the equation), often advertised on sites like Gumtree. Specific suburbs were not sought-out but in a number of instances the victims were of the same nationality as the tenant and the prospective tenants posed as families with young children. 
The applicants would negotiate directly with the owners, often offering to pay for a long lease in advance. They then used fake identities to secure the premises.
 
Despite hard times, landlords need to carry out proper and extensive checks on prospective tenants. It is also important to conduct regular rental inspections (legally in WA you can conduct four a year) and consider having the first inspection within a month or two of the tenants taking possession.
Discovered the rental property has been used as hydroponic lab? RentCover policyholders can make claims for both lost rental income and damage (we consider drug lab clean-ups as accidental damage and have recently increased the maximum cover limit to $65,000 with a maximum of two excesses applicable).
 
 
Note: Organised crime gangs operate drug labs all around the country, so landlords and property managers in other states shouldn’t be lulled into a false sense of security thinking this is a Perth problem. RentCover recommends due diligence be a priority at all times. Any suspicions that a property is being used as a drug lab should always be referred to police – when it comes to organised crime, always think about your own security and safety first and leave any investigation to the professionals.