realestatebusiness logo

Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

rpm logo latest

Could you be managing a drug lab?

By Sharon Fox-Slater
10 March 2017 | 1 minute read
Could you be managing a drug lab?

Australia’s burgeoning illicit drug epidemic means clandestine drug laboratories (clan labs) are a growing concern for landlords and PMs.

Hundreds of labs are busted by police each year and while the value of the seized drugs makes the headlines there’s a cost that rarely makes the news. That’s the cost of cleaning up the mess left behind.

Toxic chemical residue, fire damage, the aftermath of explosions – these are all potential issues if a rental property has been used as a clan lab. A quick scrub with spray ‘n wipe and a vacuum is not going to cut it. Contaminated homes can pose serious health risks and costs for a professional clean-up can be eye-watering.

We’ve had a number of claims in recent times from owners who have been shocked to discover their property has been used as a clan lab. The average payout of each claim has topped $25,000 including costs associated with forensic testing, specialist cleaning, physical damage and loss of rent.

Rental properties are often used for illegal drug making (the ‘cooks’ generally don’t live on the premises or manufacture in their own homes), so be vigilant and look for these potential ‘red flags’:

Before a lease agreement
• Potential tenants willing to pay rent months in advance – and in cash
• Rental applicants who attempt to avoid background checks
• Tenants willing to install extensive security at their own cost

During the tenancy
• Excessive fortification such as security systems, barbed wire fencing, CCTV, window bars, guard dogs or deadbolts/alarms on internal doors and blacked out windows
• Modifications to the property (plumbing or electricity) or appliances (such as extractor fans or pool-cleaning equipment) in odd locations or unnecessarily onsite (e.g. no pool)
• Chemical odours (acetone or ammonia) and suspicious run-off in nearby drains
• Substantial spike in utility costs or tampered with meter boards
• Large volumes of chemical containers/drums (such as drain cleaner), garden fertiliser, baking soda, gas cylinders, pipes and hoses or empty tablet blister packs onsite or dumped nearby
• Evidence of laboratory equipment such as beakers, flasks, test tubes or pH testers
• Premises not appearing lived in or residents burning rubbish
• Complaints from neighbours about unusual behaviour, strange smells or noises, suspicious comings and goings etc.
• Regularly avoiding/postponing/cancelling property inspections

With the costs of clean up often reaching into the tens of thousands (specialist cleaning is a must given the health risks and the potential liability of putting tenants into an unsafe property), it is essential to ensure your landlord clients have insurance that covers both property damage and loss of rental income. At RentCover we consider drug lab clean-ups as accidental damage (other insurers may not offer cover at all) and have recently increased the maximum cover limit to $65,000 (with a maximum of two excesses applicable).

If you suspect a rental property is being used as a clan lab, do not attempt to enter the premises (booby-traps are not uncommon) or confront the tenants – call the police. If your suspicions are confirmed, get in touch with the landlord’s insurer to start the restoration process once the police give the go-ahead.

Could you be managing a drug lab?
drug lab evidence
lawyersweekly logo


Sharon Fox-Slater

Sharon Fox-Slater

Sharon Fox-Slater is the Managing Director of EBM RentCover, which protects more than 150,000 rental properties across Australia. She commenced a role with EBM back in 1993 and was part of the core team that helped launch one of Australia’s first landlord insurance policies into the market. She was also the first woman in Australia to complete the Advanced Diploma in Insurance Broking, and is well equipped to educate property investors and property professionals about the value of aligning with a specialist landlord insurance provider.

Listen to other installment of the Real Estate Business Podcast
May 09, 2022

REB Top 50 Women in Real Estate 2022

REB is thrilled to present the Top 50 Women in Real Estate 2022 ranking, which sets t ... LEARN MORE

May 04, 2022

REB Top 100 Agents 2022

Now in its second decade, the REB Top 100 Agents 2022 rankings are the most revered s ... LEARN MORE

May 02, 2022

REB Top 50 Agents NSW 2022

Even a pandemic has not put the brakes on the unstoppable property market in NSW, whi ... LEARN MORE

April 27, 2022

REB Top 50 Agents VIC 2022

The COVID-19 crisis has not deterred the property market in Victoria, which has been ... LEARN MORE

April 25, 2022

REB Top 50 Agents QLD 2022

As the property market continues to roar in Brisbane and Queensland, the REB Top 50 A ... LEARN MORE

Coming up

rankings rankings


Subscribe to our RPM
mailing list


Do you have an industry update?

top suburbs

12 month growth
Bawley Point
Walla Walla
Byron Bay
Kiama Heights
South Hobart
Lennox Head
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.