The new question: Meth and Rental Property?

Methamphetamine Remediation Process Explained

Australia’s expanding illicit drug problem is having an ever-increasing impact on investment property owners, with a growing number of rentals being contaminated by meth. Here's how to be proactive about the growing problem of meth users in Australia, especially when it comes to property management.

The sad reality is rentals are frequently used as ‘clan labs’ where various drugs are illegally manufactured. Some drugs, like methamphetamines, can be ‘cooked’ in residential kitchens and it is happening increasingly in investment properties in both metropolitan and rural areas.

Dangerous chemicals, including lithium metal, liquid ammonia, LPG, acetone, hydrochloric acid and caustic soda, are used when cooking ice and other meth-based drugs which can leave a highly toxic residue which can seep into soft furnishings, carpets, timber floors, door frames, walls and ceilings.

If a property is found to have been used as a meth lab, it will need special forensic cleaning which can cost tens of thousands of dollars. In some cases, homes have to be demolished and rebuilt.

Is your landlord covered?

From an insurance perspective, when a rental has been used as a meth lab there are two main areas for claims – damage and liability. 

Many insurers consider the manufacture of drugs on the premises as operating a business, an activity which is generally excluded from cover.

When it comes to damage, many landlords find their insurance policy excludes drug-related claims. Unlike most landlord insurers, RentCover provides policyholders with up to $65,000 for cleaning up a drug-contaminated property. Other insurers specifically exclude any claims relating to contamination. In other instances, the damage caused – for example malicious (home trashed in a drug-fuelled rampage, showered with bullets in rival gang retaliation), accidental (kitchen catches fire, garage explodes) or deliberate (electrics rewired, security installed) – will not be covered.

Risks of Renting a Contaminated Home

Allowing a contaminated home to be occupied may breach the Residential Tenancies Act (duty of care) legislation in each state or even contravene building and health legislation, leaving the landlord exposed to legal action and claims for compensation.

Cover for liability associated with contamination is treated similarly to damage by most insurers. Once again, landlords can find they have no cover in the event they are sued for negligence by allowing the premises to be leased when it was not in a fit state.


Who is accountable?

Faced with the prospect of not being adequately covered through their own landlord insurance, many investment property owners quickly turn their attention to their agent – and the finger-pointing is becoming increasingly common. 

No licensed agent would knowingly rent a property to someone they suspected was likely to operate a drug lab from the premises.

But despite even the most extensive due diligence (checking rental databases, comprehensive reference checks, credit checks, police clearance, ID verification) criminals find ways to beat the ‘checks and balances’ system.


How to Protect Yourself

 Check your Professional Indemnity (PI) insurance cover to make sure it offers adequate protection in the event you are sued for negligence.



This article originally appeared in Prop 20, by Sharon Fox-Slater.


If it’s not dinner, then what’s cooking? Sharon Fox-Slater

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Photo by Nik Shuliahin on Unsplash