With police continuing to find rental properties used to cultivate cannabis across the country, landlords are being encouraged to conduct basic checks on prospective tenants and look out for potential red flags.
By Liu Chen of RNZ
Seventeen properties in West Auckland were most recently discovered to have been used as grow houses, police said.
Cannabis-related insurance claims have remained relatively stable, with an increase of around 17 percent over the past five years, an AMI spokesperson said.
However, landlords whose properties have been used to cultivate cannabis could potentially find themselves having to deal with damaged ceilings, cardboard-covered windows and dangling electricity wires because of indoor growing operations.
Below, property and insurance experts outline some important details that landlords who find themselves in this situation should know.
What's the first step landlords need to take if they discover their property has been used as a grow house?
Sarina Gibbon, director of Tenancy Advisory, said it was important to ring your insurance company immediately once you discover a property has been used to cultivate cannabis.
The Insurance Council of New Zealand also said property owners should contact their insurer promptly and seek advice on the next steps.
"The insurer can help explain how the policy may respond and what information is needed to assess any claim," a spokesperson from the organisation said.
Can landlords enter a property if they suspect it has been used as a grow house?
Landlords cannot enter a rental unless they give notice, even if they don't believe a tenant is living there anymore, property law expert Joanna Pidgeon said.
Landlords should try to contact tenants, asking them to confirm in writing that they were returning the property and ask the tenant to return the keys, she said.
"If you can't make contact, you can knock on the door of the property, look around the outside and speak with neighbours to get a better idea about the situation."
With an electronic address for service, landlords could give 24 hours' notice (plus service time) to enter a property if they had reasonable cause to believe the tenant had abandoned the property, and the rent was 14 days in arrears or more, Pidgeon said.
However, she said landlords must not enter the house with 24 hours' notice if they didn't have reasonable cause to believe that it was abandoned.
Can landlords repossess a rental property if they suspect it is being used as a grow house?
If landlords wanted to repossess a property and receive compensation for loss of rent and damage, they needed to apply to the Tenancy Tribunal, Pidgeon said.
An expedited abandonment application enables the tribunal to return possession of a property to the landlord within 10 working days if certain requirements are met.
Landlords needed to make a standard application to the Tenancy Tribunal if they wanted to apply for more than just a possession order, such as rent arrears, costs for damage or the bond, according to Tenancy Services.
"Make sure that you have the 'before' and 'after' photos to show the damage, and all the evidence - costs of repairs for damage et cetera for your application," Pidgeon said.
"Document your attempts to contact the tenant by phone and email with no response. ... Get a copy of the police report."
What can landlords do with belongings that tenants leave behind?
In short, landlords can't just throw things away.
Landlords must follow certain rules for dealing with any abandoned goods that are left behind at the end of a tenancy, according to Tenancy Services.
The rules allow food or perishable goods to be thrown away immediately.
However, landlords must attempt to contact tenants and give them reasonable time to collect their belongings.
If landlords can't contact a tenant or a tenant refuses to collect their belongings, landlords have two options.
First, landlords can apply to the Tenancy Tribunal for an order on how to deal with abandoned goods. The tribunal can order the goods to be disposed of, returned to the tenant or sold by the landlord.
Landlords can also decide whether to store, dispose of or sell the goods.
If the items left behind are personal documents, landlords must securely store them. If the documents aren't claimed after 35 days, landlords can either continue to store them and await any claims by the tenant, or give them to police and get a receipt.
For all other goods, landlords must take reasonable steps to assess how much these are worth and act accordingly.
More details can be found on Tenancy Services' website.
Can insurance cover damage to a property used as a grow house?
Insurance claims were universally assessed case by case, said Dan Walker, chief claims officer at Tower, who recommended landlords take out an insurance policy that is specific to landlords instead of owner-occupier insurance.
"Landlord insurance provides capped cover for deliberate damage, loss of rent and a contribution to methamphetamine decontamination, as well as cover for natural hazards, fire and accidental damage," Walker said.
An Insurance Council spokesperson said cover varied between insurers and policy wordings.
Although many landlord insurance policies were designed to address risks associated with renting a property, exclusions, conditions and limitations could apply, the spokesperson said.
What else should landlords know?
Pidgeon said landlords should do their homework up front before accepting anyone as tenants.
Landlords should conduct references and credit checks, and ensure they had an electronic address for service, she said.
Gibbon said it was important for landlords to conduct regular inspections.
"Cannabis plants don't grow overnight, right?" Gibbon said. "It takes time."
Pidgeon said insurance companies often required landlords to carry out inspections as a prerequisite to ensure cover, typically once every three months.
The Insurance Council also urged property owners to familiarise themselves with any inspection and record-keeping requirements contained in their policy.
Landlords could also look out for red flags such as blacked-out or constantly covered windows, DIY ventilation or extractor fans, unusually high humidity (mould or condensation), and signs that electricity meters had been tampered with, Pidgeon said.
Keeping hedges and shrubs trimmed was also recommended so that windows and doors were clearly visible to neighbours and passersby, which will make rental properties less appealing for criminal activity, she said.
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