What to do if your investment property becomes a drug lab

Two meth cooks cook up a storm.Drug manufacturing can cause serious damage to your investment property. Here's what to do if you suspect your tenants.

Breaking Bad may have made folk heroes out of mercurial meth cooks Walter White and Jesse Pinkman, but the reality of drug manufacture is even messier than the gritty drama lets on. If you own an investment property and it's used to manufacture drugs, it can do untold damage to your property both structurally and reputationally.

If you suspect your property is being used to manufacture drugs, there are steps you need to follow to reclaim your investment and recoup your losses.

Prevention is the best cure

The best thing you can do to deal with tenants using your property to manufacture or sell drugs is to stave off the situation before it occurs.

Hiring a good property manager will go a long way to ensuring you secure trustworthy tenants who will use your property respectfully and legally. Make sure your property manager thoroughly screens applicants, and that all applicants for tenancy provide both professional and personal references. You also need to follow up to be sure your property manager actually takes the step of contacting references.

Once your tenants have moved in, you'll want your property manager to conduct regular property inspections. Once every three months is a fair frequency. Make sure they thoroughly examine the property, and note anything that seems amiss.

Identify the signs

Even if your property manager is conducting regular inspections, they'll need to know what to look for to identify if your property is being used for illicit purposes.

If you suspect that your tenant is using your property to manufacture drugs, tell your property manager to look for unauthorised modifications to the property. Pay attention to alterations in features like pipes, wiring and ventilation, or security features that have been added to the property without your authorisation, such as fencing.

Your property manager should also note if the property seems to be inhabited. If it's being used to manufacture drugs, it's likely the tenants do not actually live at the property.

They should also note any odd requests from the tenants, such as paying rent in cash or paying several months in advance.

Notify the authorities

A line of police tape.

If you do suspect your property is being used to manufacture drugs, your first reaction may be to confront your tenants. However, you should notify the proper authorities and deal with the tenants through legal channels rather than confronting them yourself.

If your tenants have given you reason to suspect that they're using your property for illicit activities, you can call your local police or report the activity anonymously by calling Crime Stoppers on 1800 333 000.

Get rid of the tenants

If your suspicions are confirmed and your tenant is using your property to manufacture drugs, you'll need to move quickly to evict them. Laws dictating the eviction process vary by state and territory. Some states don't require a notice period when a tenant has used a property for illegal purposes, whereas others require the tenant be given notice and time to remedy.

Thoroughly repair the damage

Drug manufacturing can cause considerable damage to a property. Not only can lab setups cause structural harm to your premises, the fumes and chemicals involved in the manufacturing process can be dangerous.

You'll need to thoroughly repair any structural issues, and depending on the type of drug activity, you may have to go so far as to undertake soil testing to ensure any poisonous chemicals have been removed from the property.

If you've evicted your tenant for manufacturing drugs, you'll likely be able to claim the tenant's bond to help pay for repairs. However, where repair costs go above and beyond the bond amount, you'll need to check your landlord's insurance to make sure you're covered. Some policies don't cover damage caused by illegal activities.

In the event you're left out of pocket, you can consider taking legal action against the tenant.

Read our full guide to property investing

Image: Shutterstock

Adam Smith

Adam has more than five years of experience writing about the Australian home loan market.

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