Friday, 1 March 2013

Marijuana: How it destroys a landlord's investment

Grow-ops are evil and there are far too many landlords who are victims of criminals who prey on their naiveté.   What are grow ops?  In effect, they are rental units that are turned into green houses to grow marijuana.  In order to grow marijuana, tenants need lots of water, light, and heat---just like in a green house.  The heat and light is normally electric.  Because the amount of power needed is huge, tenants will often rig a bypass of the hydro meter and steal the hydro.  This causes an immense amount of damage as the tenants will cut through walls and even basement floors to access the power to go around the meter.  

Water is needed all around the house for the plants.  Water tubing is needed for all of the plants so holes are cut through floors and walls to pass the piping from room to room along with the electricity cables to power lamps and heaters.  The damage to the rental unit is utterly indiscriminate.  Support beams are cut, walls and floors are ruined, water and moisture is allowed to flow on floors, in walls, and anywhere it can run to.  In time, the moisture laden air will turn the walls, ceilings, flooring, and everything within the rental unit into a soggy and moldy mess.  It will be possible to push a finger through the floors and walls because the wood and composites are so badly decomposed.  How long will this take?  Less than a year.

I'm not familiar with the economics of marijuana growing but I have seen, often enough, the devastating impact that a grow-op has on a landlord.   A landlord, usually after a police raid, discovers that the lovely young couple with X number of children, were actually a front for an organized drug growing operation.  How do these tenants look?  They look normal, they are polite and humble.  They are extremely thankful that you would rent to them.  They bring you cookies.  And best of all, they give you post dated rent cheques, or offer to bring the cheques to you every month.  They never complain about anything.  They are the perfect tenants and never even ask you to change a lightbulb.  In fact, they will do and say anything to help you avoid the hassle of entering the rental unit.

A disturbing reality for landlords who have been victimized by these criminals is that the rental unit becomes a complete write off---it has to be completely demolished.  Worse yet, landlords will discover that most insurance policies now exclude coverage for damage arising from use of the property as a grow op.  The outcome is a destroyed house, an unpaid mortgage, no insurance coverage, and bills for hydro and demolition. For many small landlords it means bankruptcy.

If you are wondering what communities this happens in I can tell you that in Ottawa, Ontario, it happens in any and every community.  From the sleepy suburbs to downtown.  Where-ever there is a landlord who is not particularly watchful there lurks a "tenant" who wants to use the property as a marijuana grow op.

This blog today is to offer some advice on how to prevent or lessen the chance of your property being used as a grow op.  The most effective advice I can give is vigilance over the rental property.  In all of the cases I have been involved in a common theme in each case has been an absentee landlord.  A grow-op will only thrive and take root in your building if you don't go and inspect the unit.  Tenant's need you not to attend the unit.  The crops need time to grow.

As such, if you do only one thing as a landlord, you should make explicit provision in your lease for a monthly inspection (on 24 hours notice) of the rental unit for illegal activity.  The Residential Tenancies Act allows a landlord to include reasons to enter a rental unit in the lease.  Checking to see if a property is being used as a grow op is a legitimate reason to enter a rental unit.  This does not mean that you have to check every month---it just means that you may check every month.  It will take you less than 5 minutes to confirm whether there is a grow op in your unit.  It is worth the time.

I recommend that in negotiating a lease with a tenant that you highlight the fact that you will be entering the unit to inspect it monthly for the presence of illegal activity.  This in itself should motivate the wrong tenants to move on.  Once you get to know the tenants, and are satisfied that they are not the type to destroy your property you can go less frequently.  However, even with the nicest tenants it is imperative that you conduct at least annual maintenance inspections to catch whatever problems may be developing.

There are lots of signs of a property being used as a grow op and I provide a link here to a website from the Alberta government that provides clues visible from the street that a property is being used as a grow op.  Of course, while it is great to know the signs, as a landlord you should be trying to avoid having to look for the signs altogether.

Michael K. E. Thiele
QTMG LLP
Ottawa, Ontario
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IMPORTANT NOTICE

Any answers provided are intended to reflect the Law of Ontario, Canada. The answers are not legal advice and no one should rely on the answers provided as legal advice. The answers are intended to be general information about Ontario Law and are the personal view of the author based on the limited facts provided to the author. The answers may not be legally accurate and may indeed be contrary to the law of Ontario. Answers and conclusions drawn may have been different if facts had been shared that have not been disclosed in the comment/question. This blog is intended to assist people in learning about Ontario Landlord and Tenant Law. However, if you have actual legal problems this blog should under no circumstances replace proper legal advice obtained by retaining a lawyer or licensed paralegal to advise you. Nothing in this blog, comments submitted or answers provided, gives rise to a solicitor and client relationship. Comments are published as submitted and commenters should be aware that if they identify themselves in a comment that their identity will become public upon the comment being published. Comments that have been published may be deleted upon request to the author.

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About Michael Thiele

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Ottawa lawyer and partner at Quinn Thiele Mineault Grodzki LLP.  Graduate of Queen's University in Kingston, Ontario.  Called to the bar in Ontario in 1997.  Undergraduate degree at Colby College, Waterville Maine, U.S.A.