How landlords can protect their rental property against meth contamination

Meth contamination

01 May How landlords can protect their rental property against meth contamination

Landlords – do you know how to protect your investment against a meth contamination or P attack?

Methamphetamine (commonly also known as ‘P’) is a major social problem in New Zealand. Many landlords and property owners are having to deal with the consequences of meth contamination.

Methamphetamine makers leave dangerous, invisible and long-lasting chemical footprints in their wake. As they move between properties – both commercial and residential, up-market and low-brow – the number of contaminated properties continues to increase.

The results of their activity can make you or your tenant sick, devalue your property and, ultimately, cost you a bundle. In fact, landlords and homeowners pay millions of dollars each year to decontaminate their properties.

One professional meth testing and decontamination company estimate that the police have only busted around 10% of the 20,000 to 40,000 P labs that have existed in New Zealand in the 15 or so years that P has been manufactured here.

What this means is there’s a potential tsunami of meth-contaminated properties heading for owners, landlords, property managers and the rental market that could rival our leaky homes disaster!

How do I test for meth when I’m buying a property?

If you have any concerns or suspicions that a property might be contaminated, it will pay you to have it tested before you buy it.

There are self-testing kits available on the market. While they only cost around $200 and can detect the presence of meth, they cannot indicate the level of contamination.

If the property tests positive for meth, you’ll need to hire a professional outfit to determine the level of contamination and outline what needs to be done to fix it. This part of the process will usually cost around $2500 but can be as high as $10,000 or more.

Depending on the level of meth contamination, the property will likely need specialised cleaning, including the removal and replacement of all soft furnishings and/or wall linings and ceilings. Once cleaned, the property will need to be re-tested to ensure it’s completely free of all traces of meth contamination. This will mean another hit to the wallet of around $2000+.

But it could be a whole lot worse. If the level of meth contamination is found to be so great it might even be cheaper to demolish the property and rebuild it, than try to clean it. How’s that for costs spiraling out of control?

What about insurance coverage?

You may reason that because you have insurance if you discover your rental property has become contaminated your insurer will cover the cost of decontaminating and restoring your property. Right? Wrong!

Different insurers have different schemes for covering owners if their properties burn down as a result of meth-related activities. Some include this under their general fire cover. Others may limit their coverage. Some may outright exclude drug-related damages.

Different insurers will cap the amount of coverage they provide. The decontamination process could easily eat through these limits and leave you financially exposed.

So, depending on your insurer and the exclusions in your policy, you may be protected from meth damage to your rental property. Then again, you might not.

Will my landlord’s insurance cover against P?

Having a landlord’s extension to the standard property insurance will usually cover damage that is not deliberate or malicious (taking into account that insurers and their policies differ considerably).

However, you’ll need to be able to prove that you have done your utmost to exercise due diligence and caution around protecting your property, for example, by doing regular inspections. Or by showing you’re doing everything possible to take proper care of your property, for example, by hiring a property management company.

How can I manage against the risk of meth at my rental?

The best way to reduce the risk of meth contamination to your investment property is to be proactive in managing your tenants.

Test your property to establish a benchmark. The best time to do this is as part of your due diligence on the property before you buy it.

If you’re not skilled in being able to identify high-risk individuals and properties, then appoint a property manager who is. One who will thoroughly check tenants before they move in.

Do regular property inspections and be on the lookout for items associated with meth use. Re-test your property between tenancies if you have any suspicions about what your tenants might have been up to.

We’ll take good care of your rental property

At Fahey Property Management, we have years of experience in the property rental market and have developed a sixth sense when it comes to spotting a potentially dodgy tenant.

We vet our tenants thoroughly and carry out frequent checks, including three month inspections on all the properties we manage.

Our tenancy agreements also state that we reserve the right to do random meth-testing throughout the tenancy.

We can also provide you with information about landlord’s insurance policies that provide cover against meth contamination.