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Sorry, your home's a dope farm so you're not insured

When landlord Luigi Gianino rented out a detached family house in a quiet residential area in Suffolk, he had little cause for concern.

The tenant, a smart-suited Chinese businessman with a wife and son – and a BMW parked in the driveway – appeared to be the height of respectability.  

The fact that he was able to put down a cash deposit and commit to a tenancy agreement only added to his credibility.

But four months later, acting on a tip-off from a neighbour, police raided the four-bedroom house and Luigi discovered the investment property he had lovingly restored had been turned into a cannabis factory, growing plants with a street value of £150,000.

‘It was like a jungle,’ says the  41-year-old from Willingham, Cambridgeshire.

‘I’d spent thousands refurbishing the house only to find everything had been ripped out and replaced with cannabis plants.

‘There were huge ultraviolet lights in every room, each with a newly fitted power socket, bypassing the meter and drawing power straight from the grid. They’d knocked down walls to install heating ducts and created a living space in the garage for the “gardeners” to sleep in.’

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However, Luigi was in for another shock when he phoned his insurer to make a claim for damages. ‘The company told me I was not covered for malicious damage,’ he says.

‘It was only then I discovered in the small print an illegal activities exclusion clause preventing me from making a claim. It cost me a fortune to make good the damage.’

Cannabis farms are an increasing problem. According to the police, 16,464 cannabis production offences were committed in Britain last year alone. Insurance giant Aviva has reported a 30 per cent rise in claims involving residential cannabis farms – the highest on record.

Crimestoppers says that the cultivation of cannabis fuels organised crime, including people-trafficking, firearms possession and money-laundering.

Police technology is becoming more sophisticated to tackle the crime, with heat-seeking cameras used in helicopters to detect heat given off by the big lights needed to grow the plants.

But Lee Grandin, boss of Landlord Mortgages, in Wokingham, Berkshire, says: ‘Luigi Gianino’s experience is not unusual. Quiet family homes in residential streets are often targeted because they provide great cover.

‘Cannabis cultivation can wreck a home in days and it can be hard, if not impossible, to claim on the insurance policy.

‘Insurers offer a variety of reasons, from landlords not taking sufficient care of their property to the house being used for commercial purposes.

‘It is not unusual for them to turn down a claim if a landlord can’t prove they have visited the property regularly or failed to carry out sufficient background checks on tenants. Always check with an insurer that it covers cannabis factories before signing on the dotted line.’

 

David Salusbury, chairman of the National Landlords Association, says: ‘Once police have cleared a property, the real challenge begins. Landlords must ensure that their insurance covers subsequent damage as many policies are rendered invalid when criminal activity has taken place in a property.’

‘Landlords can also be criminally liable if they are aware illegal activity is taking place and do not report it to the police.

‘Never challenge the tenants. If suspicious, call the police. A false alarm is better than no alarm.’

Grandin says: ‘The best advice for landlords is to keep a careful eye on property and ensure tenants obey the terms of the lease. Even if tenants are not growing cannabis, they may be trying to sell off fixtures and fittings or damaging your property.’

He says alarm bells should ring if a tenant offers to pay a deposit and rent in cash or is looking for a let of just three or six months. Vigorous vetting of prospective tenants is vital.

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