Insurer issues cannabis farm warning to landlords

With rental properties being used as cannabis farms becoming a more common occurrence, landlords are being warned that their insurance may not cover them for any damage caused.

Figures show that 7,865 cannabis farms were identified nationally in 2011 and 2012 – a 15% increase from 2009 and 2010.

Richard Burgess from landlord insurance specialist Cover4LetProperty.co.uk said: “Type ‘cannabis farms landlord’ into Google and you’ll see hundreds of stories of landlords facing huge repair bills, having unwittingly let their property to tenants who have then turned it in to a cannabis farm

“Sadly, most landlords assume that this type of damage – which can include ripping up floor boards, knocking through walls and creating an indoor greenhouse environment – is covered by their landlords insurance, particularly if they have the ‘malicious damage by tenant’ element of cover.

“Not all insurers provide malicious damage by tenant cover as part of a landlord insurance policy, though at Cover4LetProperty, we do. What landlords need to understand however, is that while all of our insurers will consider a cultivation of cannabis claim under the malicious damage by tenant section, some will have limits, typically up to £5,000. This means that any repairs can still end up costing a landlord tens of thousands of pounds.

“Finally, part of their contract with their insurer is that they – or a representative – makes regular, logged, checks on the property, including sheds. So, the signs of cannabis growing would be clear to see at an early stage. Ignorance is no defence.”

Burgess advises landlords to ensure their properties are regularly visited as well as carrying out the usual tenant checks before letting out a property. Warning signs of a suspect tenant include those looking to pay six months’ rent upfront; a pointed interest in the power supplies to the property; and the reasons for renting, such as a new job, not tying up with their references and other paperwork.

Peter Lawrence at Lawrence Rand said: "Whilst one can never 100% guard against such an incident, our referencing processes and, when providing managed services, regular contact  and inspections will make the possibility remote."