Cannabis farms are a popular theme in the news. Most weeks you will find at least one or two horror stories of landlords who have unwittingly let their properties to unscrupulous criminals and belatedly discovered that those properties were turned into cannabis farms. Unfortunately, the damaged caused can be horrific—floorboards ripped up, walls knocked down, water and electricity supplies illegally diverted. In some cases the repair bills can easily run into tens of thousands of pounds. So who is responsible for paying?
Will Insurers Pay Up?
Most landlords probably assume they are safe should the worst happen and they find out that a tenant has turned one of their properties into a cannabis farm. They think that if they have landlords insurance with ‘malicious damage by tenant’ cover, it’s fine and the insurer will pay out. But this is not necessarily the case and landlords should make sure they check the small print.
Limit on Amounts Claimed for Tenant Damage
Not all insurers cover damage caused by tenants and those that do often place a limit on the amount that can be claimed. Insurers take the view that landlords must carry out checks on tenants before they take up residence and make regular inspections of their properties after a tenancy has begun, which would weed out cannabis farms before they cause significant damage.
Landlord Checks
• Be wary of a tenant who wants to pay a large amount of rent in advance
• Check tenant references with a fine-toothed comb
• Inspect the property regularly and log your checks
