18

The Illegal Cultivation of Drugs

Not all insurance policies provide cover for the damage that these residents leave behind and the damage can be extensive, including: 
 
  • Extensive water damage & condensation from irrigation systems and strong lighting 
  • Damage from the use of plastic and polythene linings of walls 
  • Sealing of doors and windows 
  • Installation of ducting & extractor fans 
  • Damage to electricity supplies following tampering by tenant to accommodate high-powered lighting 
 
The cost to return the property to a habitable and rentable condition can be horrendous. 
 
Important 
 
More and more insurers are imposing restrictions on their policies where they will only consider claims if a residential property has been inspected every 3 months. This is impractical for many property managers/owners so by default their policy will be excluding claims arising from such incidents. 
 
Example Case Study
 
Couple find their home trashed after tenants grew cannabis inside causing over £50,000 worth of damage. What is worse is that their insurers refused to pay the claim. It’s every landlord’s worst nightmare. 
 
When the couple finally managed to evict the tenants and assess the damage, they were shocked to discover their insurer wouldn’t cover their losses which eventually reached £56,000.This is because they had arranged their insurance on the wrong basis and it did not offer protection against damage by tenants.
 
The couple had owned their £300,000 home for over 30 years and when they decided to travel abroad, had arranged to let out their home fully furnished while they were away.
 
When they arrived home they found that the tenants had boarded themselves in and would not allow them to enter. They were horrified to see the garden strewn with their damaged furniture, rubbish and various other items.
 
The couple were forced to start proceedings to have the tenants forcibly evicted. This took five months and cost them £2,500.
 
They gave their insurance company advance warning that a claim was likely and arranged for an assessor to visit the property on the day they gained access.
 
They discovered the tenants had stripped the property of the furniture and other fittings. There was extensive water damage to the walls, ceilings and floors caused by extremely high heat and humidity levels.
 
Their insurer refused to uphold the claim. It pointed to the policy conditions that said any loss or damage caused by persons lawfully in the home was not covered.
 
The couple complained to the financial ombudsman, but an adjudicator said it was clear that the policy did not cover malicious damage by tenants.
 
Our Advice 
 
Prevention is always better than cure so make sure you have a robust tenant vetting procedure in place. The following vetting suggestions might reduce the risks of ending up with a cannabis farm in your property: 
  • Consider using a tenant-referencing agency 
  • Ask for, and validate, references 
  • Get salary/income verification 
  • Only accept rental payments electronically, through a bank 
 
Should the worst happen, despite your best endeavours, make sure you select an insurance policy that protects you against this type of event.
 
What to do next 
 
We are experts in property insurance and understand all the issues surrounding events of this type, so if you’d like more information, or would like us to review your cover please call our experts now on: 
 
Call 01789 761660 
 
Web: www.pi-propertyinsurance.co.uk

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