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The Rise of Cannabis Farms in Residential Rentals: A Guide for Landlords

The cultivation of cannabis, once confined to large industrial spaces, has found its way into residential rental properties. This shift, accelerated by the Covid pandemic, has led to a surge in claims for property damages linked to these illegal farms. But what does this mean for landlords, and how can they protect themselves?

The Growing Concern

Previously, cannabis farms were typically set up in remote warehouses or unused farm buildings. However, the trend has shifted towards smaller-scale operations in private rented homes. This change has not only caught the attention of the police but also insurers who report a spike in related claims.

The Risks for Landlords

If a tenant is discovered to be operating a cannabis farm, landlords could face severe consequences. These range from legal prosecution and potential jail time to property confiscation. Even if landlords are unaware of such activities, they might still find themselves embroiled in a criminal investigation. Vigilance is crucial.

Prevention is Better than Cure

A common thread among these illegal operations is the use of false references by tenants. These individuals often misrepresent their employment, financial status, or even hide criminal records. To safeguard their properties, landlords must:

  • Validate Tenant References: Before finalizing a lease, landlords should thoroughly vet potential tenants. This includes checking their employment status, financial health, and any criminal history.

  • Understand Insurance Policies: Landlords should be familiar with the terms of their insurance. Some policies, like the Complete Property Owner policy, have specific provisions related to damages from illegal drug cultivation. These might require regular property inspections, maintaining inspection logs, verifying tenant identities, and ensuring no sub-letting occurs.

The Importance of Tenant Referencing

Tenant referencing is a landlord's first line of defense. It offers insights into a tenant's financial capabilities, past dealings with landlords, and overall suitability for the property.

Steps for Effective Tenant Referencing

  1. Pre-screening: Start with a simple phone call. Ask basic questions to gauge the tenant's genuineness. Red flags include reluctance to share documents or an eagerness to move in immediately.

  2. Detailed Referencing: If the tenant passes the initial screening, delve deeper. This could involve checking their bank details, past rental history, and more.

  3. Third-party Referencing: Consider using a professional tenant-referencing agent or letting agent. They can save landlords time and offer a comprehensive check. When choosing an agent, consider their speed, reputation, cost, and the depth of their checks.

As the landscape of illegal cannabis cultivation evolves, landlords must stay informed and proactive. Proper tenant referencing is not just a formality; it's a crucial step in protecting one's property and peace of mind.


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