Prevention

Could your rental be used as a drug lab?

Would you recognise the warning signs if your rental property were being used for illegal drug activity? 

When a rental is used as a drug lab, the consequences for landlords can be serious. Toxic contamination, structural damage, safety risks and unpaid bills are common, and the cost to repair and remediate the property can be substantial. 

It’s also more common than many landlords realise. In Australia, most detected drug labs are found in residential properties, often ordinary homes in suburban streets. 

The damage left behind

Cannabis grow houses often involve unauthorised plumbing and electrical modifications, leading to water damage, electrical faults and an increased risk of fire. Drug manufacturing sites can leave harmful chemical residue throughout the home, meaning professional remediation is required before the property is safe to live in again, even if no fire or explosion has occurred. 

In more serious cases, landlords may be left with major structural damage or the remains of a fire‑damaged building. 

Reducing the risk

While there’s no guaranteed way to prevent illegal activity, careful tenant selection and regular inspections can help reduce risk. 

When assessing applicants, take extra care if a prospective tenant: 

• Shows little interest in the property or surrounding area 

• Offers to pay large amounts of rent upfront, particularly in cash 

• Avoids reference or background checks 

• Requests extensive security installations at their own expense 

Warning signs during a tenancy

Drug operations can be established quickly, making vigilance essential throughout the tenancy. 

Potential red flags include: 

• Locks changed or security installed without approval 

• Blacked‑out windows, excessive fortification or internal barriers 

• Unapproved changes to plumbing, electrical systems or ventilation 

• Strong chemical odours or unusual drainage run‑off 

• Unexpected spikes in utility usage or signs of meter tampering 

• Unusual equipment, chemicals or containers stored onsite 

• A property that appears unoccupied despite being rented 

Concerns raised by neighbours (such as constant noise from fans or pumps, unusual smells, or suspicious comings and goings) should never be ignored. 

If you suspect illegal drug activity, do not enter the property or confront the tenants. Contact the police immediately. 

Is drug lab clean‑up covered by insurance?

Repairing damage and cleaning up contamination can cost tens of thousands of dollars, and many landlord insurance policies exclude claims related to illegal activities or drug production. 

EBM RentCover is one of the few landlord insurance providers that offers cover for drug lab clean‑up, with protection of up to $70,000 for damage caused by meth labs or hydroponic grow operations. It’s an important safeguard for landlords facing risks unique to rental properties. 

We know situations like this can be extremely stressful for landlords, and we hope you never have to face one. But if the unexpected does happen, our claims team is here to guide you through the process and help you get back on track as quickly as possible – 1800 661 662.

*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.